Links that made me think: Tech HQs, Business Insights, Net Promoter Scores, El Capitan, and more

This week’s reads and resources to provoke thoughts on strategy, leadership, life, and other things.

Geoff Wilson

Every week, I get to devour a hefty heap of digital content in service to our clients and partners. As I sift through the internet on this mission, I discover things that are relevant to business, strategy, leadership, and life in general. As I do so, I’ll share some pieces that I think are thought-provoking treasures. Here are a few articles and resources I found particularly interesting and valuable this week. Enjoy the feast—or at least whet your appetite.

  • Tech giants—notably led by Apple—are investing billions in crystal palaces. Value creation or boondoggle? – The Guardian
  • How often do you find business insights in unconventional places? – thoughtLEADERS Blog
  • Why looking at other companies’ net promoter scores may miss the point.  – Genroe
  • Alex Honnold’s free solo of El Capitan, and the preparation it actually took to get there. – The New York Times
  • Glassdoor might not be quite as anonymous as you think, if the courts have their say. – The Ladders
  • An article on office jargon that I thought you might be able to leverage. – The Telegraph

Dig in, let me know what you think, and have a great week!


The danger of “only winning” in business

Only beating the competition isn’t strategy.

Geoff Wilson

What a week it’s been on the political scene. We saw U.S. Senate Republicans almost (thanks to John McCain’s last-second “no” vote) pass an absurd bill to effect the “skinny repeal” of Obamacare. The bill would have stripped the economically rational parts of Obamacare (the mandates) and left the rest.

The bill was so ridiculous that Senate Republicans actually didn’t want it to be passed by the House and sent to President Trump for signature. Some just wanted to make a symbolic move in the name of winning something on healthcare.

The bill was an act that focused on “winning” against a foe, but it was ultimately grounded in no vision whatsoever for the future health of the country (literally and figuratively).

Strategy focused only on winning against the competition may not be enough

“We won the battle but lost the war.” You’ve heard that plenty, I’m sure. It’s a tired adage. The problem is that modern organizations are rife with battles yet extremely light on defining of the war. A case in point would be your functional organizations, which may define winning in ways that have nothing to do with the mission of the greater company. Your human resources team wants to hire and train, your supply chain team wants to source cheap raw materials, and your engineering team wants to create a better mousetrap. Which of these three investments make the most sense for the company? Who knows.

The same is true for business managers. So many business strategies are built on beating the competition that doing so has come to define strategy. But what if the competition is playing the same tired game? Who’s out there looking for ways to deliver value to customers that the competition hasn’t thought of yet? One of the reasons the book Blue Ocean Strategy by Chan Kim and Renée Mauborgne has captured so many imaginations is that it has exhorted us to look for ways to deliver value that others have not figured out. The concept is literally “find out where the competition isn’t,” but in a way that implies innovation in that void, not mere presence.

But doing so requires vision

The major issue with applying this “more than winning” approach to strategy is that it takes time and expertise—it requires vision. You need to have the time to think of strategy as avoiding the competition and focusing on the vision for the customer. And you have to have the expertise to actually figure out how to do it. Chances are there aren’t many people in your company who have both the time and the expertise.

The U.S. Senate nearly taught us this week that only focusing on winning against a foe can lead to really stupid outcomes. Absent a compelling vision for how to deliver stable, cost-effective health care to citizens via regulatory boundaries and mandates (an admittedly hard thing to do), the Senate simply aspired to do something to beat the competition. May your own strategy avoid such a ditch.

Now it’s your turn:  How have you seen this sort of thing play out in your career?

Assumption, what’s your strategic function?

The journey to real insight lies in debating assumptions, not outcomes.

Geoff Wilson

You know what happens when you assume? Well, the classical answer to that question involves something unsavory that happens to you and me. But that’s not what I had in mind.

What I meant is what happens when you make assumptions about the future of your business, your competition, and your market. It’s something all strategists have to do. They can’t tell the future, but they can test assumptions about it. And testing assumptions about the future is far more rewarding and sound than testing guesses about future outcomes.

Imagine you’re trying to set a business strategy for entry into a market. Let’s say it’s the market for insulated coffee mugs. You might start your business on the notion that the outcome you seek is to sell 1,000 mugs the first year, 5,000 the second, and 10,000 the third. You reach nirvana that way.

But what matters is the assumptions you make about the market and your product in order to build to the outcome. If you’re targeting coffee mugs for truckers, you must estimate the number of truckers you need to reach in order to sell those first 1,000 mugs, and then determine the number of places that you need to carry your mugs in order to reach that many truckers (which leads to an assessment of how many mugs you should have on how many racks in how many truck stops, all driving your assumptions about working capital, how many competitive mugs are on the same racks, your price point, etc.).

Before you know it, you’ve had to make assumptions about many variables that actually matter in building up to that outcome of 1,000 mugs in the first year. And assumptions (or estimates, if you will) can be debated far better than any blanket statement about sales forecasts or market share gains.

Assumptions are where the rubber meets the road for strategy. Assumptions are testable propositions.

Too many strategic-planning exercises go sideways in the gap between “We have to grow sales by 7 percent next year” and “We can’t figure a set of assumptions that allows it.” This is especially true when a decidedly top-down view of the world (“grow by 7 percent”) collides with the reality of the bottom-up assumptions (“The market is shrinking and our competition is getting stronger.”).

Something has to give, and it’s usually either the top-down whim (in the case of sound strategic planning processes) or the bottom-up assumption (in the case of personality-driven planning processes). You’ve probably witnessed both cases.

When you make strategic assumptions, you create little test tubes that can be individually experimented with far better than strategic predictions about the overall environment. You can test a proposition about the market, but you can’t really test a statement about the market’s outcome.

When seeking to build a better strategy, you should debate assumptions about what drives reality around you, not mere statements on that reality.

What do you think? 

Links that made me think: Insights, AI, Coachability, Cancer, and more

This week’s reads and resources to provoke thoughts on strategy, leadership, life, and other things.

Geoff Wilson

Every week, I get to devour a hefty heap of digital content in service to our clients and partners. As I sift through the internet on this mission, I discover things that are relevant to business, strategy, leadership, and life in general. As I do so, I’ll share some pieces that I think are thought-provoking treasures. Here are a few articles and resources I found particularly interesting and valuable this week. Enjoy the feast—or at least whet your appetite.

  • What’s an insight? This presentation has perspectives on those things that all strategists are looking for but can’t define. – Umar Ghumman
  • How artificial intelligence might transform field services – VentureBeat
  • Three signs that someone’s not coachable – Roberta Matuson
  • John McCain’s brain cancer, from the perspective of a glioblastoma survivor – New York Times OpEd
  • Nicely synthesized summary of how to avoid poverty in today’s U.S. economy – National Center for Policy Analysis

Dig in, let me know what you think, and have a great week!


Why your people need to mesh for your business to move

Identifying ideal mesh points within your organization is vital to strategic execution.

Geoff Wilson

Your organization is the gearbox of your strategy. It’s the structure through which the energy of people and ideas gets channeled toward the strategic intent of the company’s leadership team. An effective organization structure is priceless. It fosters contact and collaboration among people who are best positioned to capture opportunity and manage risk en route to delivering the company’s mission.

But if the organization is the gearbox, a leader’s ability to fine tune the meshing of the gears within the box becomes a key determinant of whether strategy can be executed at all. Perhaps your strategy calls for an operation to be migrated from one geography to another—maybe to capture a cost advantage or to better serve a customer.

Such a move typically requires many disparate parts of a company to mesh with one another in ways that aren’t always natural.

How so? Imagine that the operation’s leaders are focused on delivering on cost and inventory performance at the start and end of the move. Then, imagine that the very act of moving will naturally impact production costs (as one facility is ramped down and another is ramped up) and inventory levels (as inventory is built up on one side for the move, and built on the other to achieve future service levels).

What is likely to happen if the operational leaders aren’t appropriately meshed with strategic and financial leaders to reset goals and expectations? Chaos, that’s what. Customer service suffers, transitions from the one location to another take twice as long (as cost levels are over-managed), and nearly everyone wonders why this was so darn hard.

It’s necessary during times of strategic change to over-invest in organizational mesh points that ensure ideas and energy are correctly driven. These can often be artificial and temporary—program management offices provide this function for large-change programs. But sometimes, strategic organization mesh points simply need to be matters of daily business. The emergence of sales and operational-planning processes and meetings the world over reflects the value of strategic mesh points in organizations.

Maybe you have a strategy that requires an unnatural coordination across your sales and product development teams. Perhaps your strategy requires your supply chain to interact differently with your marketing team. It’s important to know this.

Be sure to consider where your organization needs to mesh in order to achieve the change you’re seeking.

What do you think?

Accelerate decision cycles to increase competitive advantage

The pace at which your organization makes decisions may outrank the quality of your choices.

Geoff Wilson

Imagine you and I are playing a game. The type of game doesn’t matter, but assume it requires taking turns or possessing a ball. It could be innings in baseball, possessions in soccer, or even turns in a basic game like checkers.

Now, imagine there’s a wrinkle: I get two turns for each one of yours. I get to make two moves in checkers for your one move. I get six outs per inning in baseball against your three. I get the ball twice for every possession you have in soccer. Here’s the question: Can you win?

I don’t think so—at least not consistently. If I get two chances for each move you make, and if I get to work from basically the same information you have, my probability of winning is greatly enhanced. This example may seem absurd, as you’d likely scoff if I dared propose such an unfair contest. But it’s analogous to how some companies handicap (or, conversely, advantage) themselves.

Strategic decision cycles are too often internally driven

Companies the world over operate as if their internal decision processes are all that matter. They do annual strategic planning, quarterly account planning (if they’re lucky), and maybe monthly resource planning. For many of these companies, big decisions—such as introducing a new product line or building a new plant—can take years, while seemingly small decisions—hiring a new salesperson, for instance—can take months.

Their decision cycles are internally driven—even when managers know that the outside world is moving faster than their own company’s internal cycle. This pace lagging restrains opportunity in the best cases, and paves the road to ruin in the worst cases. The worst cases are when the world is rapidly changing, or a shifty attacker emerges in the market.

Fast decision cycles are advantageous

We all want to make good decisions, and doing so requires reasonable deliberation time. However, if you are caught in a scenario where your competition is able to make decisions faster than you can, your slower-paced good decisions eventually won’t matter.

Why? Because the organization that can multiply its capability via a faster decision cycle will have a substantial advantage in avoiding risks and capturing opportunities. The company that moves through decision cycles faster than its competition—the one that can make multiple decisions while the competition makes just one—is an advantaged organization.

For decades, Toyota has been constantly lauded for its production system, but its product development system is only occasionally celebrated. Toyota captured substantial share in the 1980s by introducing products and product refinements on a development cycle that was significantly faster than its competition. This system gave Toyota a major advantage over the slower pack.

One could argue that Tesla is doing the same thing in today’s market with its “platform and upgrade” approach to auto ownership. In some ways, Tesla is able to operate inside of its competition’s decision cycles.

So what? Cycle faster!

Companies with faster cycles are advantaged. Such advantage doesn’t eliminate failure, but it increases the probability of success (and of killing off failures quickly) to overwhelm missteps. Would you rather be a baseball player with a .500 batting average who gets two at-bats per game, or a player with a .300 batting average who gets to the plate six times a game? If you’re playing for hits, you want to be the latter, not the former.

Fast cycling allows you to multiply your force. It enables you to disrupt and dismember the competition. Done well, it allows you to lead—even with less talent, capital, and “perfection” than larger, slower competition.

But beware the alternative: When your competition is inside your decision cycle, you are going to lose—eventually. If you drive at a tempo slower than your competition, you might find yourself on the slow road to oblivion.

What do you think?