AI and the emergence of the centaur imperative for professionals everywhere

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If the future of knowledge work isn’t now…it isn’t too far off.

Geoff Wilson

We’ve seen a lot of press recently on the launch and adoption of OpenAI’s ChatGPT client.

Suddenly, you can ask for an essay on any commonly covered topic and it will be written, in the voice that you choose; and you can receive it in seconds.

Suddenly, you can ask for a summary of research on almost any topic that is commonly covered, and with a couple of iterations and refinements spanning minutes, you can get a fairly well-structured list of facts…in seconds.

Suddenly, you can ask for a limerick on a dog eating dog food in las vegas, and have it instantaneously.

Ok, so that last one is true, but maybe less useful.

This technology, basically a natural language-enabled interface with the publicly available knowledge in the world up to about 2021, represents a change, a threat, and a massive disruption to knowledge workers everywhere.

At WGP, we often discuss a hierarchy of professional capability that goes something like this:

  • Produce process:  Get clarity on the steps to take if you have nothing else.  This is the most basic professional function.
  • Produce data:  Gather the facts, get the numbers in place, and provide the foundation for analysis.  This is the next level of professional function.
  • Produce insight: Analyze the data and produce higher-level insights that range from the mundane to the blinding.  This is the expectation of good professionals of all sorts.
  • Produce synthesis: Combine insights, draw implications, and deliver orthogonal thinking that re-sets direction and creates truly new thinking.  This is professional nirvana.  When you find someone who does this well, cherish them.

If we think about the implications for professional services of AI tools like ChatGPT, it’s easy to see that suddenly machines have gone from repositories and accelerators of process, data, and insight generation approaches to a very viable resource (more than a tool) for actually generating these things.

I have never looked at MS Excel and said “create for me a 3-statement financial model structure” and had anything happen.  That has been the realm of analysts and experts.  AI tools are going to do this in no time (if not already).

I have never looked MS Project and said “create for me a basic project plan in 50 steps to deliver a market research report on the stick whittling industry.”  That has been the realm of consulting managers and associates.  AI tools are going to do this in no time (if not already).

Machines are quickly going to overtake people in generally acceptable process, data, and insight generation.

It wasn’t too long ago that these things were only done by people.  For years, consulting firms have silo’d and offshored research capabilities to low-cost countries.  For years, law firms have hired lower-cost labor for legal research.  These lower-level professional functions are unlikely to survive the evolution of AI resources.

So what’s the imperative?

We’ll explore it further in other posts, but I’ll summarize it as this:  The future average professional will have to have the skills of the best professionals today…that is, the ability to critically assess vast amounts of available information, to provide proprietary insight not generally available or acceptable, and to generate unconventional synthesis.  

This will be true across all legal, medical, consulting, and executive services.

The future professional will be a centaur:  The head of a powerfully insightful and resourceful human on the body of a powerfully informed AI resource that provides available world knowledge at fingertip reach.

The age of summarizing Bureau of Labor Statistics data and saying “AHA!” are over.  We are entering the age of professionals delivering on what most consulting firms claim they deliver on:  Proprietary, differentiated, confidential insights.  We are also entering the age of human interpretation of machine-driven insights.

In short, we’re entering the age of the centaur professional.  If you hire professionals, demand a centaur.  If you are a professional…time to upgrade.

What do you think?  How do you think AI resources will alter the way we work in the coming years?  What’s the right path to “best” in this new world?

I want (you) to believe

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Change management strategies are fundamental to strategy implementation.  How are you doing?

Geoff Wilson

Quick, think of a time that you made a really fundamental change in your life.  What did it take to do it?

Maybe you changed jobs or started a workout regiment.  Maybe you did something more drastic like ending a business or personal relationship.

Chances are, you made the change after thinking through the why, the what, and the how.  Chances are you didn’t make a fundamental change by leaping before you looked.

And, that’s the topic of this post.  Many of you who read this blog are leading change efforts.  You are hoping to implement new strategies (or retooled versions of old ones).  You are looking for fundamental change.

So, the question is this:  Have you looked before you leaped?  Have you set in place the fundamentals of change itself while seeking fundamental change?  The fundamentals of change can be characterized as the why, the what, the how, and the by how much…

In other words, if you want to establish change in your diet, you have to convince yourself that the change is worthwhile (the why), that you know what needs to change in your diet (the what), that you know how you will feed yourself differently (the how), and how that difference gets quantified (maybe in calories, or in hours of the day you are allowed to eat).

These four elements are essential to change, and to management of change.  All too often “strategic” leaders fundamentally understand all of these aspects of their desired changes, but forget that other people can’t see inside their heads.

This is where going from believing in a change to leading change actually happens.

Let’s say you want to install a new way of managing customer accounts.  You know that doing so will lead to higher sales, can be done via basic templates, will be reinforced through monthly reviews, and can be measured in terms of completion and sales impact.

Simple, right?

Except, when you jump directly to templates and reviews with your salesforce, your organization subtly rejects the change.  Why?  They don’t have all of the fundamental elements of beliefs.  You are feeding them the what and how, but not the why and how much, perhaps.

In our strategic planning and implementation practices at WGP, we think about strategy implementation as depending on tried and true methods of change management.  T’hey include:

  • A very strong narrative or story (the “why”),
  • A very clear outline and ideally role modeling of the change required (the “what”),
  • An understanding of the skills and tools required for change (the “how”),
  • And an understanding of how change will be measured and reinforced (the “how much”).

If I’m a leader who believes in a desired change, I’ve convinced an important stakeholder–me.  The difference is I want you to believe.   No…I really need you to believe.

What do you think?  Are you using fundamental change management tools to drive your organization’s strategic change? 

Revenge of the microeconomist in the real world

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We are in a world of opportunity and hurt.  Demand is high, spirits (and prices) are up, and supply is constrained.  What’s a leader to do?

Geoff Wilson

When I was a young man I learned microeconomics on the back of a simple diagram with two lines…one for demand (always downward sloping) and one for supply (this one goes up).

Turns out, the microeconomists were right.  Mostly.

We are living in a fever dream at the moment.  It comes with the pleasure fog of rising demand for…well…everything as people regain the confidence that they can interact and transact with one another without threatening lives. It also comes with the tormenting nightmare of not being able to hire, source, or build the products and services that they need.

There’s plenty of blame to go around. The most plausible explanation is that we are simply mired in the midst of a massive supply chain bullwhip that is synchronized around the world for once. As positive and negative information trickles out across industry chains, individuals firms attempt to adjust…and they do so badly.

Add the labor-market distortions brought by extended unemployment benefits, extended school and family support organization closures, fear of the unknowns around coronavirus reoccurrence, and general inflation; and you have a multi-faceted political and commercial game that would make George R. R. Martin blush.

But all of this is couched, at least for the moment, within a massive environment of opportunity.  Demand is popping for most of the economy, and poised to pop for much of the rest.

So (as I’m often wont to ask), what’s a leader to do?

Here are a few ideas.

  • Embrace, but prioritize, the opportunity: George Patton’s theory of war was “violent attacks with everything, everywhere” and, while Patton was certainly an effective field general, that theory won’t get you far when you have more opportunity than fuel (yeah, Patton ran out of fuel, too).  Reinvigorate your opportunity analysis approach.  Sometimes, in the cold light of day, an opportunity to serve an existing customer more deeply is actually a massive drain of resources that should be deployed to new customer demand. Sometimes, the opposite is true.  How will you know until you’ve actually thought about it?

 

  • Take the opportunity to actually, really, innovate: Your cupboard is almost bare and your stove is almost out of gas, but the customer is ready to eat. Sure, you’ve always cooked the meals in-house, but perhaps now it’s time to try something new.  Innovation is a funny thing.  We all “talk” about being innovative, but–as the old saying goes–necessity is the mother of invention. Use the constraints to identify new ways of serving customers and allocating resources.  Maybe it’s time to look more closely at your portion size controls, or your fueling strategy, or your staffing policies, to see if a habit of “just a little bit extra” for customers who are “in”  is creating a reality of “just a little too little” for new customers.  Maybe it’s time to look at your inventory (or talent) pools in Pacoima, Paris, Prague, and Pune and think about them more globally.  Innovation might just be the act of ensuring your organization has the tools necessary to allocate and reallocate resources. It might also be investigating whether your current models of working are overbuilt for accomplishing the task at hand.

 

  • Explore new supply chain structures and mechanisms: Your suppliers haven’t performed, so what do you do?  Hammer them. Am I right? Penalties, complaints, responsive declarations of force majeure, and just plain angry talk abound right now.  Maybe it’s time to think about how to partner differently.  I have no doubt that new, enduring partnerships will be forged from the fever fire of the current environment.  I also have no doubt that a lot of relationships will be broken in ways that won’t be forgettable in the near future.  Take the time to look your suppliers in the eye and solve problems with them.  Look for new ways of partnering.  Look for new economic models (maybe incentives vs. penalties). Look–most importantly–for the priorities you need to set.  Oh, and if you are the one getting hammered, it’s ok to partner more closely with those customers now…and then fire their keisters later.  An elephant never forgets.

 

  • Get rid of taboos: There’s that group across town whom you’ve never worked with because, well, you don’t like them. Maybe they stole your cookies once in the lunchroom in 3rd grade. Maybe they fired you once. Maybe they based their operations in China (or California) and you just won’t go there. Taboos can relate to suppliers you work with, customers you would never put on allocation, places you’d never recruit from, or any number of other things.  Your proverbial elephant maybe hasn’t forgotten a bad experience.  Maybe you need a new elephant. Challenge those old taboos.  We are in a time of supply creation.  Think that way.

These are ideas.  They might not apply to you, but then again some might.  I encourage you to look at your own situation for what it is, and choose accordingly.

The economists have us in their thrall at the moment. We are waiting for the invisible hand to rise up and do its work. In the meantime, we see opportunity, and we see constraint…and in between the two is the imperative to act.

Now it’s your turn:  How are you thinking about tackling the current supply / demand imbalance?  Punching an economist is not a valid answer. 

Your lack of takt is showing!

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The faithful delivery of services and product on time is a challenge, maybe it’s time to apply more production-floor common sense to services.

Geoff Wilson

Stop me if you’ve heard this story before:  An executive hires a consultant to solve a problem.  The consulting agreement is for a lot of work–maybe redesigning the way an organization is structured–in a little time (and for a lot of money).  The consultant comes in, does the work “on time and in full,” and drops off the report at the end of the engagement.  The executive’s team hardly notices the consultant was there because, well, the consultant moved really fast and the organization didn’t.

The executive is left with a book, a recommendation, and a confused organization.

Sound familiar?  I suspect it does for those who have worked with any high-powered, high-fee consulting firm.

What’s the issue?

Well, let me unpack a notion from the world of lean manufacturing, and then come back to this example.

In lean manufacturing, one of the critical sources of waste is overproduction.  That is to say that making too much of a product and sloshing it into inventory is wasteful.  It wastes valuable production resources, not to mention valuable capital.

The solution to this type of waste is to align production resources to “Takt Time.”  Takt is a derivation of a German word that means “pulse.”  Takt Time, then, is the pulse of an operation or a business.  And, what is the actual pulse of a business?  It’s the demand for products and services within a given time period.  If demand for my product is thirty units per month and my organization is open every day, then my effective Takt Time–the time I should take to make and deliver a product–is roughly one day. Making more than one per day is wasteful.

There are many nuances to this line of thought, and it’s certainly possible to get too “lean” in your thinking.  Many companies have.  But the notion of Takt Time is super useful for an executive trying to balance strategic initiatives and daily business activities.

Let’s revisit our executive at the beginning of this post. Our executive has agreed with the consultant on the pace and delivery of a work product, but the organization is focused on daily management activities.  The strategic organization work falls into the category of important but not urgent.  In the end, the pace of the delivered work product is too fast for the organization to engage around at its current pace, leading to a far less than optimal delivery of the consultant’s product.

The product could be a total waste.

So what? Well, I bring this up because while Takt time is a concept that is well known in production environments, it is not well applied to services environments. And this is a tragedy.  Why?  Because products can be inventoried and eventually liquidated.  Overproduced services (like our consultant’s report above) are typically wasted.

To probably feel the result of a lack of service “Takt” in a lot of parts of your life. How often are you overserved “all you can drink” beverages by an overly enthusiastic server?  Maybe even more poignant in today’s economy:  How often do you find that your “subscription” service (for meal kits or pet food deliveries) ends up piling up wasted products, time or energy?

Often, I’ll bet.  And it’s because nobody actually aligned your real demand for the beverages or pile of meal kits in your kitchen with the actual pace of delivery.  When buying or selling services, consider the actual pace of consumption or the actual ability of the service to be consumed, and plan accordingly.

It’s all about Takt.

Now it’s your turn: How does matching service pace and demand fit with situations you are dealing with? 

Don’t forget the sales!

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The sales function far too often treated like an impenetrable combination of personalities, voodoo, and tradition.  It’s time for that to stop.

Geoff Wilson

I have a theory when it comes to sales.  It goes something like this: Along the way in their executive development, a lot of really smart people develop a disdain for sales as a function.  In some cases, they view sales as “dirty” or “basic.”  They might view sales as risky . . . why would a smart person ever subject themselves to the risks of not making a sales quota.

As that prejudice against sales develops, this particular sort of executive tends to think of sales and the people and systems that enable sales as a sort of mystery.  It’s a realm of knowledge that is best left to the salespeople, who take those risks and drive the relationships necessary for the business to thrive.

But they also leave a lot on the table.

Some of the most complete business strategies I have seen have also completely ignored the processes and tools that accelerate sales. Why?  Because, as noted above, it’s a mystery. It’s rumored to be personality- or relationship-driven.  The thinking goes that we can control our product.  We can control our operations.  We can control our cost structures and our hiring and our marketing messages.  But we can’t “control” our salesforce.

This thought process is dangerous since there are process losses in sales just as there are in a manufacturing operation.  The difference is that in a manufacturing operation if something is left by the wayside it gets calculated as a cost.  It’s a known quantity.

In sales, if a call doesn’t get returned or a meeting is botched–and millions of dollars of sales are lost as a result–the cost never gets really quantified.  Sales process losses are far too often an unknown quantity. . . and a lot of people have incentives to keep it that way. Sales leaders who make their number don’t really have to own up to unforced errors.

On the other side, there are also plenty of elements of focus and efficiency that can be missed within a salesforce.  Poor lead qualification can lead to salespeople spending a lot of time on dead ends.  Poor account planning practices can lead to salespeople spending a lot of time selling the wrong things, or at the wrong value.

Imagine if your manufacturing plant consistently produced the wrong product.  You’d likely be mystified and perhaps furious.  Now imagine how often your salesforce might be selling to the wrong customers, with the wrong products, and at the wrong times.  Do you know?  Can you possibly know?

In most environments, you very much can know these things. But, your attention must be focused on sales as a function, as a process, and as an integral lever for strategic management success.

What do you think? 

Systems vs. goals in your search for success

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Much is said about whether success is better framed as a goal or as a system…I think it’s both, but at different times.

Geoff Wilson

Have you ever had a question posed to you that made you think more than it should have?

A team member recently asked me if I was a goal-oriented person.  My response was that I was far more interested in having systems that enable success than in distilling success into specific goals.

I’d rather have a system for serving clients than the goal of serving a certain number of clients or projects.  I’d rather have a system for developing people than the goal of developing a certain number of people.

Like many, I’ve read plenty of blogs on the systems vs. goals dichotomy that was probably best laid out by Scott Adams of Dilbert fame in his book How to Fail at Almost Anything and Still Win Big:  Kind of the Story of My Life.

Here’s a 2013 blog post from Adams on the topic.

In short, the thesis is that goals are self-limiting and sometimes counterproductive, while systems often perpetuate success by building habits that are perpetual.  The diet analogy Adams uses is a good one.  Which one would you rather have:  A goal of losing 10 pounds (which is often met but rarely maintained) or a system of eating more healthily?  Most people would agree that a system of healthy eating is a much better all-around approach to success.

But it’s only half right.

As with many things that relate to economics, tradeoffs, and incentives, the reality is very different depending on the time scale and existential realities one lives within.  For instance, economic systems of different types fit best at different societal scales. Pretty much every household is a miniature communist dictatorship of some kind (a goals-based economy where the head of household allocates resources to needs from abilities). Whereas countries do much better under mixed capitalist economies (which are much more about setting systems and guidelines).

And just like this, the systems vs. goals quandary is best viewed not as a dichotomy but as a matter of context.

To wit, if you really need to fit into your old tuxedo, then a goal of losing 10 lbs is worth a heck of a lot more than a system of healthy eating. And, if you want to develop a system for success, then setting incremental goals for development can actually be highly effective. Likewise, if your highly systematic business model that has delivered value for many years suddenly hits a snag, then you’d best start achieving some specific financial, customer, and operational goals, or else your business won’t survive long.

Where systems and goals get most confounded is when the goal is confused for the system.  In our strategy practice, we often see companies setting financial goals and calling them–at least implicitly–strategy.  This is very common when financial sponsors are involved in companies. The question of whether a business model should earn a given EBITDA margin is often subordinated to the fact that it simply has to.  

That’s a failure of goals dominating systems.

So, what’s the takeaway from all of this?  I think it’s that it is perfectly fine to manage life to goals in crunch times, crises, and during transformations.  Goals aren’t the problem, but as Scott Adams implies, they are also not the end. Goals, by definition, can be met.  And that’s where systems come in.  Systems should be perpetual.  They should be molded and shaped, but never “met” or “achieved.” Use goals, but don’t let them crowd out the need to develop systems.

You’ll be better for it.

What do you think? 

Are you measuring or are you moving?

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Effective executives balance time spent moving vs. time spent measuring.

The case

One fine day at a backyard barbecue, a utility executive says to a cloud software executive, “I have found that a dashboard for my business helps me understand it.” The software executive says “great, what’s happening today?” The utility executive, a little exasperated, says “well, the dashboard is only updated monthly.” “So, when do you look at the dashboard?” says the software guy. “Usually in our monthly staff meeting on the 15th of the month. Our finance group prepares the dashboards, and they take about 10 days to complete.” says the utility guy. Software guy lets out a deep breath and says “Monthly? I can lose my entire company in a month.  We look at our stats at 5 PM every day, just to know whether there’s a customer issue that we need to tackle.  It takes 5 mins and we jump on any issues.” The utility guy says, “yeah, well, our customers can’t leave.” Software guy goes to get another drink from the cooler.

The question

Which one are you? Are you the utility executive, insulated from customer turmoil by a deep regulatory moat? Perhaps you are the cloud software exec, where daily action must be taken to ensure customer satisfaction. You’re probably somewhere in between. There are few businesses that move at a daily pace like the software business described above, but there are a LOT of businesses that spend a LOT of time compiling measurements of where they were last month when in reality those measurements are already meaningless. That’s right . . . it’s history.  In most businesses, dashboards are great for identifying issues and issuing some attaboys, but they are almost always out of date. Yes, yes, there are still industries that move at the speed of paper, but they are rare.  Your business likely moves faster than your account function, so you probably ought to ensure you match your “measuring” activities with the pace of your business.  Doing so allows your pace of operations to match the pace of change. Famous 20th-century physicist Werner Heisenberg–not the Heisenberg of Breaking Bad fame . . . the real one–famously established the eponymous Heisenberg uncertainty principle.  The principle essentially says that there are real limits to what you can “know” at any moment about, in Heisenberg’s case, quantum systems.  One of Dr. Heisenberg’s principle’s essential assertions is that it’s impossible to know both the position and momentum of a particle precisely at the same time.  To know where a particle is precisely, you likely have to give up some certainty about where the particle is going.  Conversely, the more precisely you know where the particle is going, the less precisely you will know where it is. And, while it’s clearly malpractice to apply quantum mechanics to the conference room, allow me to do so:  The more time you spend trying to understand where your business is the less certainty you are likely to have about where it is going.

In short, you can measure, or you can move . . . so your balance of those two things needs to be matched to the pace of your business. 

It’s a rare business or organization that can do both measurement and movement at the same time, effectively.  You’ve probably felt this tension every time you’ve asked your salesforce to fill out surveys or to complete a CRM template. Your salesforce (if it’s worth its salt) likely told you the cost in terms of customer interaction, closed sales, or other value-added work.  You were pushing to measure, and the salesforce was pushing to move.  Such is one of the chief (good) arguments for sales support resources (measurement) to aid your salesforce (movement).

The opposite case can come into play as well. You’ve possibly felt this tension if you’ve ever asked your Program Management Organization (PMO) what results it has delivered.  The answer, if it’s typical, will look a lot like a count of meetings, dashboards, templates, and reviews. It’s less likely that you get a summary of business results.  The mission of a PMO in the typical sense is measurement.  Moving the business is somebody else’s role. Now, PMO dynamics aside–the art of the action-oriented PMO are for another post–you can see that there are tradeoffs to measuring and moving.

So what?

The takeaway here is threefold: First, just like Heisenberg, you have to know that measuring and moving tend to vary inversely–prepping for weeks for a board meeting (yep, I’ve seen it) fundamentally takes away from running the business.  Second, you have to know when you are measuring and when you are moving; and you have to know what elements of your business should be geared for movement (like sales) or measurement (like finance or the PMO above). And, third, you need to know the pace of your business and how much “measurement time” is okay given customer and regulatory dynamics. Our utility and software executives illustrate that at the start of this post. If you can combine knowledge of these dynamics and alignment of business pace with how you tradeoff measuring and moving, you’ll be well ahead of the game. Now, what do you think?     

The great strategic “wreck-oning”

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The shocks to your system might not be what you think they are.  You’d better take a closer look.

Geoff Wilson

Hey, you there…the guy or gal with the life you always wanted.  How does it feel?

You are working from home.  Your computer screen has become your window into the world.  And, you have realized that it is, in fact, possible to pack more meetings into a day if you just sit still and do everything by videoconference.

But, how’s your business?  I mean, really, how is your BUSINESS?

I don’t mean how many COVID-19 cases do you have.  I don’t mean how many furloughs, shutdowns, or capacity reductions do you have.  I don’t mean how much stimulus cash you were able (or not able) to borrow.  And, I certainly don’t mean how much sales have decreased (or, if you are lucky, increased) over the past couple of months.  Those are interesting, good coffee chat items.

But they are the items in the spotlight.  And, the spotlight in this case is searing.  Everything–and I mean everything–is being cast in terms of the effects of COVID-19. Media coverage grasps at straws for something new after months of exhausting coverage and in doing so pulls ever more anecdotal evidence onto center stage.  Statistics that we never knew existed (well, ok, some of us knew what an R0 was, but only kind of) are now part of the national discourse.  And, yes, your employee base is focused on these same things.

But what about what’s happening with your business outside of the spotlight?  How are you thinking about that?  Because that’s really what you need to focus on.

Yes, your business has sustained a shock due to COVID-19.  All of ours have.  Some have been to the upside (hello to the pizza industry), and most others have been to the downside.

But what’s the long game?  What if the current economic and social wreck becomes a massive strategic reckoning for your business in the long game?

For instance:  What if, instead of the spotlight worry about a second wave of COVID-19, the second wave is that actually your business is no longer built for the state of the economy?  What if you are a business that thrives on in-person service, or that depends on people traveling, meeting, and conversing in person?  Well, you’ve probably already seen the shocks.  But what if you are a company with a China-centric supply chain?  What if you have a salesforce built for in-person engagement and wins?  What if you have service operation that has grown too dependent on “just showing up” vs. having targeted appointments.  You may not have fully absorbed the notion that your organization is built for another time.

How do you figure out if your business model is a dinosaur…all of the sudden?

Here are a few tips:

First, get out of the spotlight and look at the true shocks.

Take a few moments to avoid the COVID-19 terrors and look at the true shocks in the system.  Some that come to mind are cheap energy, restricted travel, fearful consumers, worried workers, and governments turned massively protectionist. Then, look at the second-order effects that accompany them:  Less face to face interaction, more small group gatherings and higher use of intermediary technology, lower needs for “real life” office space, more meals at home, and higher desires for sanitation and “certification” of places–things–and even supply chains.

In other words, get out of the spotlight and look at the world as it is, and not as you hope it will be.

How will changes in the world–not just demand at the moment–affect your business model?  Uber’s business is massively disrupted by the lowering of volume due to travel bans, but the real question is whether Uber’s business model has been obliterated by the consumer’s newfound knowledge of disease transmission and the desirability of so-called “cleanliness standards.”  How does Uber coax people back into random other people’s cars in this environment?  Can it be done?  Is there a “certified sani-wiped” uber option that is right alongside Uber Comfort? Would you ever not take that option?

To extend the Uber example, what does all of that mean for the sharing economy as a whole?  In a world where every un-masked cough and sneeze is now an emotional moment of irrational terror (thanks to attention-starved media and a populace that is not so great at math), how does the consumer think about picking up that random scooter off of the ground in the city and taking a spin?  For the more concerned among us, it probably looks about as attractive as picking used chewing gum off a handrail at the moment.

And, yes, Uber may be an easy example, but your company’s widgets or services are likely to need to change.  You’ll see fewer service desk visits, so you’d better beef up your call center.  You’ll have fewer sales calls completed in person, so you’d better have alternate channels ready to pick up the slack.  Perhaps you’ll have more scrutiny on the origin (and country risk) of your product.  Hopefully, you’ll have a renewed but balanced view of the cleanliness of your facilities, products, and service people.

The only way to know is to think it through.  This isn’t a demand curve shock that just sliding demand back a bit.  This is a global-killer asteroid for some business models.

Finally, after you’ve thought it through, form a point of view on risks and opportunities, and shift now.  

You are likely resource-constrained.  Everybody always is.  But if you are leading a dinosaur business model, it will only get worse.  The time to change is now.  Re-double efforts in newly-advantaged sales channels.  Invent or enable advantaged service models.  De-risk supply chains.  Evaluate product and service mix and ensure proper resourcing. Signal readiness for the new normal by standardizing cleanliness. Respond to new needs. In short, be entrepreneurial in the face of uncertainty.

The question in front of all business leaders at the moment is this:  Can you look past the immediate effects of a global wreck and avoid a second-wave reckoning?  The shocks to your system may not be what you think they are.  You’d better take a closer look.

What do you think?

Who do you turn to when the blood hits the floor?

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Times like these tend to reveal who we can really trust to deliver.

Geoff Wilson

A crazy phenomenon has happened over the past couple of weeks as the world has digested the coronavirus shock. Executives, many of whom have never been in executive roles in a massive shock, have had to take stock of their teams in the most critical of ways. They have had to close ranks and think about who it is that they really trust.  Think about that.  Who are the people that you trust when it comes to executing all day, every day?  I’m betting that they aren’t necessarily the same people you interacted with the most prior to the crisis.

You know why?  Crises refine trust.

When you aren’t in crisis, you can afford to take a few flyers and let a few things go to hands you may not fully trust with them.  But, today?  You probably already have a good sense of who is “in” the circle of trust and who probably isn’t.  You probably know who can deliver the goods, and you are probably loading them up with everything they can handle.  And, you probably know who can’t, and you’ve probably made choices appropriately.

Mind you, I’m not talking about your “best” talents.  I’m talking about those who can deliver.  If your organization is like many, it’s your high-bred talents who struggle the most in challenging circumstances. They are often the ones who have had a lot of good come their way due to pedigree and profile, and who haven’t had to make a whole lot of nitty-gritty choices. The worst case is that they have achieved their position by NOT making choices. You know them:  They are the ones who probably never had to improvise for a C minus, so now they are hurting when the best and only possible grade is a C minus that requires massive improv.

The ones who CAN deliver in a crisis often look different. Your shop foreman probably isn’t at home on videoconference right now, she’s probably on the shop floor trying to figure out how to stagger shifts to avoid COVID-based shutdowns.  Your grizzled veteran HR, Finance, and IT leaders are probably on the job 24X7 right now while you might be simultaneously finding that their younger, shinier counterparts (in some cases, the grizzled vets’ bosses) aren’t up to the challenge.

It’s a good lesson to learn.

Bruce Springsteen wrote a song to go along with the 2008 motion picture The Wrestler starring Mickey Rourke.  In the song, the washed-up, has-been wrestler declares that he’s a “one-trick pony,” a “one-legged dog,” and a “scarecrow filled with nothing but dust and weeds.”  In other words, he declares that he’s not of much use for anything, except…

…the wrestler also declares this:

“…bet I can make you smile when the blood, it hits the floor
Tell me, friend, can you ask for anything more?”

I am going to bet that you are in the middle of finding your own one-trick ponies and one-legged dogs–rediscovering the grizzled talent in your organization. You know them as the people who are specialized enough to be really strong in a crisis.

I’m also going to bet you are finding out that–sometimes–those are the people who might have deserved a bit more attention.  You are probably  doing the same “trust triage” with your advisors, sorting out the ones who can help you go and go faster from the ones with a lot of polish and bluster but no “go.” You know them, they are the ones who are all hat and no cattle.  Judging by the sudden surge in snazzy marketing pitches on LinkedIn around the COVID-19 crisis, a lot of high polish consultants are suddenly in possession of a lot of free time.

While I firmly believe that you should always sort out your show dogs from your working dogs, now is a great time to keep your eyes open for the ones who buckle in and deliver vs. the ones who…don’t.

Because you need to know who can make you smile when the blood hits the floor

Tell me, friend, can you ask for anything more?

I’ll leave you with a link to the song…It’s worth a spin.

What do you think?

When it all goes to VUCA, what do you do?

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Is there an operating system for strategy under absolute uncertainty?

Geoff Wilson

Well, the world has gone to hell in a handbasket. It certainly didn’t take long, did it?

Ask anyone and they will tell you that the world is somewhere between an intense over-reaction and The Walking Dead’s best impression of The End Of The World As We Know It (you know?  TEOTWAWKI). That is to say, it’s anybody’s guess where the global economy–nay, the global social fabric–may end up after COVID-19 has run its course.  Sports are canceled, schools are shut, travel is being banned in ever-tightening circles, and social institutions are being completely put on hold.

Right now, just another blog on strategy may not be sufficient for the Big-Mac-layer-cake of stress that is being thrown at the average citizen around the globe.  We are, all at once, not only dealing with commercial collapse, but also social and institutional uncertainty on a scale not often seen without physical invasion. And, if YOU, dear reader, are not feeling the stress, you can be assured the people around you do.

So, instead of writing about what you should do as a strategic executive–which is a hard thing to do when a reader might just as easily be at an airline, a retailer, or a bank–I thought I’d write on how you might organize your thinking in any challenging circumstance. The question at hand is really this:  Is there an operating system for strategy under absolute uncertainty? I think that there might be.

There is an acronym that is commonly used in military circles called “VUCA.”  It has been around since the 1980s.

A VUCA environment comprises:

Volatility – where the speed and magnitude of change is exceptional

Uncertainty – where outcomes are unpredictable and surprises are many

Complexity – where the number of changes happening at once is very high

Ambiguity – where the potential for error and over- or under-reaction is real

or, just VUCA, for short.

We all live in a VUCA world right now.  So, how do we handle it?

With my best fireside chat tone, I’m going to suggest that the first way of navigating VUCA is to realize that you cannot “handle” it.  There is no traditional “control” of circumstances in a VUCA world whether you are an executive or a common citizen.  You cannot “priority list” your way out of VUCA.  If you are used to controlling circumstances, you’d best get ready to learn to read and react. If you are used to calling the plays and issuing the orders, you’d best get ready to play defense and establish your lines of retreat.  If you have been inflexible in your pursuit of success, it may be time to consider flexibility in the shadow of collapse.

In other words, it’s time to focus on resiliency and responsiveness vs. concrete priorities and resoluteness.  VUCA demands it.

But, where do you start?  Your portfolio is a mess, your kids are out of school, your office is shut, and your customers aren’t answering the phone…how does a person regain footing?

Here’s my best advice, and it’s as simple as two steps:

The first step is to major in the majors.  Just as I’m sure there will be a lot of people who may one day regret that they drove all over town trying to hoard toilet tissue when they absolutely should have been ensuring that grandma was comfortably anti-social, I’m sure that there are a lot of minor things you are stressing about that are adding to your sense of VUCA.  You have to prune the ones that matter less.

That means postponing that training program and using today’s environment as a training program in itself.

It means canceling that “nice to have” project and doubling down on the must-haves.

It means stopping the standing meetings that you have and opening up your calendar.

It means ensuring you have enough strategic cash reserves (at home or in your business) without resorting to willy-nilly asset sales.

It means taking a moment to understand what kind of volatility is tolerable (perhaps the market being down 8 percent today really is a secondary concern), and what kind is not (how can you ensure that your customers will actually receive the goods???)

It probably means having a frank conversation with your family and your organization about what it means to live in times of extreme VUCA: about how choices we make now may look a lot different than choices we made even days ago. The circumstances demand that we major in the majors.

The second step is to accelerate your review cycles on the “majors.” Decisions on the majors that might have been revisited quarterly or monthly are now reviewed daily or hourly.  In the first step (majoring in the majors) you created some capacity by pruning the activity set.  Now, it’s time to deploy that capacity to evaluate and react faster than you would have otherwise.  Many executive teams are, today, engaging in rapid, periodic calls about their workforce when just last week they probably did so monthly.  Why?  Because the environment demands it.  The same is true of your household, your office, your customer portfolio, and many other things. This is not to say that short-term thinking dominates and that long-term things don’t get done, it is to say that long-term things are tested for relevance on a much more frequent basis.

But a word of caution:  Don’t try to evaluate everything rapidly.  Step one is critical, lest you over-stress yourself, your family, and your organization.  Be explicit about majoring in the majors.  Take some stuff off your plates, and those of your cohorts.

So, is there an operating system for strategy under absolute uncertainty?  I think so, but it’s a concept–perhaps a mindset–and not a recipe.

First, major in the majors:  Prune the activity set to create the capacity to stay ahead of what matters most.

Second, tighten up your decision cycles: Invest the capacity you have created to accelerate your review and decision cycles to match the pace of change in your environment.

This two-step process for managing uncertainty is true if you are running a household, and it’s true if you are running the largest organization in the world.

Keep your hands washed, and your prayers flowing.

What do you think?