Take the right strategic steps to confront mistakes at minimal cost

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Facing our managerial miscues is painful. Properly rectifying missteps is paramount.

Geoff Wilson

“That’s too much savings!” The manager looked at the spreadsheet that showed he had been overspending by more than 50 percent on a particular service under a sweetheart deal he thought he had. He was clearly mortified by what the math displayed. “Too much savings” meant a long history of too much spending, and he was the one responsible.

The phrase resonates to this day. A team member of mine who was on the aforementioned project alongside me still occasionally drops me the question via text or email: “Are you still getting too much savings these days?” It’s a delightful “How ya doin’?” But that episode, while humorous to consider in isolation, actually illustrates a good lesson about confronting reality as business leaders.

At some point, we all must face the unpleasant fact that we’ve made mistakes. We’ve hired the wrong people, bought and sold at ill-timed prices, or invested in the wrong markets. It happens to every one of us who actually make decisions. We try to be perfect, but we’re simply not.

My overspending manager, however, compounded his imperfection by trying to sidestep the inevitable pain of confronting a mistake. He popped the infamous “too much savings” comment not to state that we were going to cut costs too far, but rather to convey “I can’t give this to my boss because it will show I’ve made a big mistake.”

And that’s the problem. Analyzing our decisions sometimes reveals that we’ve made bad ones. And correcting poor decisions often means facing the proverbial music—the dirge of our defeat. We must admit it and move forward. And that’s hard.

If we examine a bad investment we’ve made and choose not to write it off but to instead double down on it because, well, doing the right thing would be too painful, we’ve ultimately determined that doing the right thing is wrong because of the optics or our insecure need to save face. Such decisions may be human nature, but they’re also cowardly, selfish, and detrimental to personal and organizational growth.

If you find yourself in a situation where the answer is so right that it’s wrong, ask yourself why. The correct strategic shift often comes with a cost, but the price of inaction is typically not less than your own job.

After all, if you won’t make the right decision, the person who replaces you probably will. And he or she will look like a hero doing it.

What do you think?

Avoid the fifth stage of organizational (in)competence

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Arrogant incompetence is a barrier to learning and strategic execution.

Geoff Wilson

On some level, every strategic leader must have a healthy appreciation for social science and psychology. Success is elusive without it. But what happens when the best that psychology has to offer actually fails?

Picture it: You’re working to ensure that a key manager in your organization executes on a project that will deliver the five key customers you absolutely must have to make plan this year. You provide all the tools, resources, and feedback that a person in the role needs, but they just don’t get through. The manager, convinced of her correctness, takes the project off the deep end. It fails, and so does your plan.

Sound familiar? I’ll bet it does. But what happened? I’ll put it mildly: You probably never learned that there’s a fifth stage of competence. And it’s the most insidious one.

I’m a huge fan of the four stages of competence learning model. The gist of it is that we progress through four phases of capability with any skill. The stages are:

  1. Unconscious incompetence: We don’t know what we are bad at, or even why it’s important. We must recognize that we might have a gap.
  2. Conscious incompetence: We realize we are bad at a skill, and why it’s valuable to improve at it.
  3. Conscious competence: We learn a skill “with reps,” as it were. We concentrate on being good at the skill.
  4. Unconscious competence: The skill is second nature and embedded. We are free to learn other things.

Those stages are outstanding, but there’s another one. Let’s call it Stage Zero: Arrogant incompetence. This is the stage where the manager’s ego lets her think she has it together, without even needing to consider that she might be wrong.

Arrogant incompetence is the realm of people who can’t stand to be critiqued or judged. It afflicts entry-level hires and CEOs alike. You see it when the entry-level hire bristles at feedback—and when the CEO ignores sound advice. It festers in organizations that close ranks to outsiders when their performance is poor.

Arrogant incompetence destroys trust. It is the opposite of truth-seeking.

Why is this important to know? Well, you’re likely reading this because you have an interest in strategy, and strategy means putting people in position to affect change. If you place your bets on people who choose arrogance over inquiry, you’re taking chances on those least likely to accept feedback, seek progress, and positively impact your organization.

The fifth stage of incompetence is a barrier to the flexibility required in today’s strategic organization. Avoid it at all costs.

What do you think?  

Doing hard things means good things for business

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Managing core tasks is important but expected. Greatness lies in facing true challenge.

Geoff Wilson

We spend ample time in strategic discussions talking about challenges and how to overcome them. Challenges exist within the market, organization, product development, sales, and myriad other business strategy topics. The conversation then turns to incentives, and it all gets muddled.

Things get murky because we often confuse the incentive to overcome a challenge with the incentive to “look like you’re doing something.” And that’s where this conversation gets very personal.

I know people who have worked their entire lives on straight salary (or even hourly wages) who will risk their jobs in the name of doing the right thing or simply taking on a new challenge. That is hard.

I’ve also known individuals who have had tremendous financial incentives—amounting to multiples of their salaries—whose go-to moves were delaying and deferring decisions for the sake of prolonging their reign. That is easy. The difficulty lies in knowing both which person you are (a) led by and (b) modeling yourself after.

Most who know me know that I detest using chess as a metaphor for strategy. The game is too constrained. All the moves are mapped out. The board is obvious. Chess is tactics, not strategy, as I’ve previously written. However, the world of chess holds many valuable tools and ideas for strategy. One of those is the Elo rating system.

The Elo rating system was devised years ago to help predict player strength without requiring every player to play a series of matches against one another. The key to the Elo rating system is how strength points are traded. When a strongly rated player beats a weak player, the strong player gains minimal points, and the weak player loses minimal points. But when a weak player beats a strong player, the strong player loses many points while the weak player gains many. Accomplishment in the face of difficulty is highly rewarded, whereas flubbing the easy stuff is mightily punished.

This is your career in a nutshell. People are (or eventually will be) looking at the challenges you face and your relative performance on them. If you’re great at accomplishing things that should be easy for you, that’s fine and good. Now stop patting yourself on the back and find your next true challenge.

Few things are less compelling than a person who talks about their great work on low-difficulty endeavors. If you want to be great, do hard things well. This is true for yourself as an individual, and it is true for your business.

If you lead a business in a sector where table stakes include on-time product delivery, you deserve minimal credit for achieving on-time delivery—it’s merely expected of you and your business. Don’t bother to tout your “great” performance. Go find a way to deliver on time and redesign the product for future customer needs. You are fighting last year’s war. Move on to the next one.

If you’re a five-year professional who does a magnificent job of keeping a filing system in order, you (again) deserve little credit for getting it right. That’s expected of an experienced person. Find a more compelling challenge to solve.

As I noted in my example of executives seeking to extend their reigns, the chess world has struggled with the trend of highly rated players avoiding competitive play in order to protect their ratings. According to the previously linked Wikipedia entry, “…the rating system can discourage game activity for players who wish to protect their rating…”.

Knowing this, you want your reputation and rating to be fresh, so you have to think about your “masterful” self or organizational performance as having a rating that is in constant deflation since the last time you set the bar. And you have to evaluate your people in the same way. “Emeritus” is a title that should be awarded with grudging irregularity in today’s business world.

But here’s the real key to all of this: Be sure you don’t flub the easy stuff while you’re seeking that next big challenge. You must do both. Losing on product-delivery performance while you’re transforming your company is a classic “executive” example. Failing at basic time management while trying to do a bigger job is a classic “individual” example. They’re the kinds of things that get people fired.

Keep in mind, the more experienced you are—the higher your Elo rating—the less points you gain for doing things that inexperienced people do, too.

You want good things? Do hard things.

What do you think?

Don’t let butt brushes bite you from behind

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The small things that turn people off from doing business with you can cause big damage.

Geoff Wilson

Millions of people shop every day. Thousands of retail executives spend millions of dollars each year trying to pinpoint what makes people lock in and buy their merchandise. They discuss store formats, look and feel, customer flow, sales interactions, and numerous other concepts. And then, some guy comes along with a perspective that attacks high-concept with a decidedly low-concept insight.

That’s what Paco Underhill did in his book Why We Buy. One of my favorite insights from that book concerns the “butt-brush effect.” Simply put, the butt-brush effect is an observation that customers tend to stop shopping when they’re touched from behind. So, when racks in stores are packed too closely together, people negotiating the cramped quarters are more likely to brush their rear ends against one another. And when that happens, they tend to get uncomfortable and stop shopping.

Butt brushes are easy to describe in a retail environment. They are, literally, butt brushes. But butt brushes exist in all business contexts. They are small portions of customer or vendor experience (yes, I’ll include vendors) that make executing your strategy just that much harder. They make people uncomfortable.

In your business, butt brushes are unintended impacts. They come from people who aren’t setting the strategy. They sometimes even occur from people just “doing their jobs.” Those are the ones that are the most insidious.

What are some examples?

  • “Aggressive attorney” butt brush: You know him. He’s the guy who makes closing the transaction a complete slog. He’s the one who focuses on the minute details to the exclusion of the relationship. He makes it hard for others to like your company.
  • “Credit Nazi” butt brush: Similar to the aggressive attorney, the contentious credit guy is a sales-prevention army of one.
  • “Purchasing” butt brush: You’ve gotten to know the senior managers of your prospective vendor. They like you. You like them. The deal is as good as done. Then, you have to pass them off to the purchasing department. Things get… brushy.

There are also the many tiny butt brushes you offer up to your prospective customers and strategic partners every day. A fantastic example is the “My smart phone is more important than you” butt brush. Yeah, you get it.

You’ve invested untold time and money into customer insights and strategy. You’ve established a path and process to get there. So why let butt brushes ruin it all? Seemingly small discomforts (sometimes driven by small mindsets) turn people off in a big way.

Keep an eye out for butt brushes before they bite you from behind.

What do you think?