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5 randoms on strategy

Here are 5 thoughts on strategy that might be of use.

Geoff Wilson

Every now and then, I just have to lay down a post to get the juices flowing again. This is one of those times.  The past 6 months have been client-heavy and blogging-time light.   As I typed and re-typed the title of this post, I became more acquainted with the factual reality of writer’s block.  Namely, it’s not necessarily that ideas stop flowing, it’s that they stop flowing to the page.  That is tough. And it’s something that I have to overcome every now and then.

 

So, in a kind of forced movement, here are 5 random thoughts on strategy, gleaned from recent experience, that might be of use to you.

Thought 1:  When in doubt, sell. 

Yes, yes, I know: It’s not rocket science to say that sales are strategically important to most any company. But, it’s shocking how little emphasis some management teams put on investing in and enabling their sales teams.  Some management teams spend hours upon hours in meetings about their latest operational issues, but barely spend a moment on sales.  It’s remarkable to see strategic priorities laid out that forget to emphasize sales.

Thought 2: Real innovators ship.

Having spent plenty of time around “innovative” organizations, I can tell you that they come in two types:  Those who say they are innovative, and those who innovate. Management teams who use innovation as a slogan are wasting time. Real innovators ship product.

Thought 3: Strategy is content before process…function before form. 

One of the major issues within the realm of strategic management is that people who are good at it are often very process-oriented. They like systems. But, systems aren’t really great at learning. Strategy is about learning and adapting.  It’s about observing and adjusting. So, when you find yourself in a company whose approach to strategy is dominated (not supported, that’s different) by templates and processes, you are probably going to land off target.  You want to focus on the content.  A single page of strong strategic arguments are often far more effective than 50 pages of powerpoint slides produced because corporate said so.

Thought 4: There is a place for short-term management

Short-termism can be a very bad thing. It can lead to poor investment approaches and can leave big ideas on the cutting room floor in exchange for quick ones.  Still, the discipline of short-term management tools (weekly reviews, monthly reporting, quarterly investor calls) can bolster performance and place emphasis on the longer-term.  How?  By ensuring that short-term decisions constantly reflect long-term objectives.

Thought 5: Your action plan is only as good as your leaders

Creating plans can be challenging.  But, it is still a creative process, which means that there is some latitude in conceiving how the future will play out and putting it into plan format. If you are creative and thoughtful, you can build a great plan.  But even the greatest of plans have to survive interpretation and ambiguity. And that’s the job of the leader who executes.  So, make a real assessment of whether you have planned well, and then make an even more real assessment of whether you have put the right talent on the plan to overcome its inevitable deficiencies.

So, there you have it. Five random thoughts on strategy that might resonate.  You might find them useful.  What do you think?  

 

In praise of the anti-curator

Every organization needs a little bit of time and talent to stop, look, and notice what is going on.

Geoff Wilson

I had an interesting discussion with a friend recently that sparked a thought.

My friend is preparing for a 500-plus mile solo hike on the Camino de Santiago.  A veteran of these sorts of hikes, he explained to me that his mode of walking was to be fully aware of his surroundings…meaning he didn’t listen to music or indulge in other distractions along the way.  He related a story about a prior long hike that involved a companion who had a similar philosophy of situational awareness.

That companion, he explained to me was a great noticer.  He related how she found a wild orchid on the path that he (claimed) he would never have noticed because it just wasn’t in his nature.

And, that brings me to the thought…

Our modern, western, techno-lives deliver us into a fantastically automated and increasingly curated world.  Our privilege is the ability to put our heads down, focus on what’s directly in front of us, and miss everything else around us because the systems around us are designed to deliver to us the typically right answer or the safe answer.

But, it’s not always the fulfilling or creative answer.  It’s the closest-to-the-pin, least likely to hurt answer.  I wrote on this a couple years ago in a post entitled Come On, Feel the Noise! where I wanted us all to question whether infinite stability is a good thing.

That’s because curators (and by this, I mean anybody feeding you information based on what typical people do) have to have some “typical” data stream to go on.  And their data stream is highly dependent on what others did.

Curators, in other words and to extend from the hiking story above, are the path.  They cannot leave the path.

Sometimes, you need to ensure you have a few noticers around you.  These are people who appreciate that you are following a path, but who have the presence of mind to watch out for the occasional uplifting opportunity that might branch from the path.  They are the ones who actually illuminate the road less traveled.

They are, in a way, anti-curators.  They break the “typical” and push you to see what might be outside of your inertia.

Maybe you need a few anti-curators around you.

What do you think? 

 

 

Where heroes go to die

For 95 percent of your business, it’s best to put your heroes in the graveyard.

Geoff Wilson

Meet Sam.

Sam is a hero.  She probably lives in your organization.  She’s the one that “gets things done.”

Product not getting shipped?  Sam is the one on the dock.

Work not getting done on time in the drafting room? Sam has uncanny ability to pitch in and get things over the goal line.

Individuals not delivering their work packages on time in general?  Sam will step in, re-cast the process, lay out for the pass, and ensure that the deadline is met.

Sam knows–or at least is known by–the CEO.  Sam has made a living out of making her bosses look great. The people around Sam may not like Sam that much because of how hard Sam works and/or how much Sam pitches in to do their job, but the reality is that Sam has probably saved them from being fired countless times.

Sam delivers. Sam is a hero.

And, in 95 percent of businesses that I know, the need for Sam’s heroism is a problem.

Why?

Because heroism makes for good beer-drinking stories and for really awful business.  It covers up for bad processes.  It lulls bosses into a false sense of security because “we are always on time” when, in reality, processes are broken, and people are left in tatters by the heroic culture.

It also creates single points of failure.  That is, if the hero gets hit by the proverbial bus, the entire system reverts to chaos.  Chaos is not good.  Your best bet in building a strategically sound business is to eliminate chaos where humanly possible. And, that means (oddly enough) eliminating heroism–the ultimate cover for chaos.  I believe that to be possible in about 95 percent of business processes.  The other 5%?  Those are where we all deal with uncontrollable variables like last minute changes in customer preferences or mercurial executives.  For those, I love heroes.

For the rest?  Use your heroes as indicators of opportunity, not as indicators of success.  Know that an effort at the strategic renewal of your company through thoughtful planning and strategic focus should be a place where heroes go to die.

But beware, because the Sams of the world can turn toxic when it comes to putting a bullet in heroism.  In general, heroes really hate business improvement.  Heroes like Sam often (not always) create job security and ego-stroking visibility through their ability to lay out for the pass.  Heroes often hate it when processes are re-evaluated.  They are the first to bring up terms like bureaucracy and waste of time.  They are the ones who (rightfully) will focus everyone around them on the results, but when everyone around them stops to say “let’s fix the process,” they might say “no thanks, I’m going to go get some more results.”  Sam may be rightfully focused on results (I applaud her), but she may also be protecting a virtual fiefdom of heroism when it comes to opting out of the nearer term process fix.

That, my friends, is ultimately not scalable.  And, that can be toxic.  Sam’s a hero, but toxic Sam is merely another form of a high-performing corporate narcissist.

My advice?  If your heroes live anywhere outside of sales or otherwise in direct interactions with your customer, find a way to put them in the graveyard.  In your strategic efforts, take them to the place where heroes go to die.

What do you think?

 

 

The things you leave behind

The toughest part of business strategy is choice.

Geoff Wilson

We live in a fantastically privileged time and I live in a fantastically privileged place.  When thinking about taking a journey with my family, I am rarely, if ever, really constrained by my capacity to carry things along with me.  A large SUV and a few containers and attachments that my family of six has accumulated over the years have made sure of that.

But, those who take serious journeys in the real world know what it’s like to deal with constraints on a journey. On a hike of hundreds of miles that might cover tens of thousands of feet of elevation change, the difference between carrying a 5-pound sleeping bag and a 2-pound one can be the difference between a comfortable hike and terminal fatigue or injurious fall.

In other words, how we deal with the constraints around us can be defining, and if we aren’t careful, we can become numb to the fact that constraints do still exist.

Your business will be defined by choices.  Those choices might be purposeful, or they might be passive.  Still, you will make choices.  Those choices will come in the form of positive choices about “what we will do,” and negative choices about “what we will not do.”

Positive choices are a call to action. They point the way.

Negative choices are a call to create capacity.  They explain how we will create focus.

But, if we aren’t careful, we can become numb. We can let profitability (which is like a large SUV…it allows you to carry many things) mask overburden or distraction, and those things can crush us when the economy turns.  We make many positive choices, and we avoid the negative choices.  We decide not to decide on what to leave behind.  Because, well, that’s hard.

And, there’s risk in that.  Because, like in the hike I outlined above, a failure to make choices on what to leave behind can be the difference between a comfortable success and a painful failure.

Those choices might be about which customers to fire.

Or employees.

Or markets to exit.

Or businesses.

Or assets to shed.

Or brands.

Or meetings to cancel.

Or trips.

Or products to eliminate.

Or partners.

What you leave behind can be as defining to your strategy, and your well being, as what you take with you.  Don’t forget it. The journey is long.  Pack for it the right way.

Old CEOs and bold CEOs

A recent HBR articles hints that those who make it to CEO fastest aren’t always the best case studies.

Geoff Wilson

Perusing the business press recently I came across an article on the Harvard Business Review website by a couple of partners at talent advisory firm ghSmart.  I’m partial to a lot of the tools and techniques that Geoff Smart and his firm have developed over time. And, I have found that management teams I work with who employ those techniques generally improve their approach to talent evaluation and elevation. This one left me…wanting, however.

The article is titled “The Fastest Path to the CEO Job, According to a 10-Year Study.” In it, the two authors outline how pedigree isn’t really all that for those who rise to the CEO role the fastest.  These so-called “CEO Sprinters”–the people who get to be CEO faster than the average time-to-office of 24 years–get there by taking big risks. The authors’ insight into these “sprinters” amounts to this:

“We discovered a striking finding: Sprinters don’t accelerate to the top by acquiring the perfect pedigree. They do it by making bold career moves over the course of their career that catapult them to the top.”

And to follow that up, the article outlines three archetypal “bold” moves: jumping to a much smaller role or company, jumping on a much larger role than they were nominally prepared for, and inheriting and sorting out a big mess.  It’s very tough to call that a blinding insight. I would go so far as to call it a dangerous one because it ignores all the potential outcomes of such risk taking.

The reason it’s dangerous goes all the way back to an old saying in the aviation world that goes something like this:

“There are old pilots and there are bold pilots…but very few old, bold pilots.”

That is to say, that for every CEO who is lauded for the career-making “bold” (risky) move to something smaller/bigger/messier before it was time, there is likely a vast number of mid-career managers sitting around wondering why they took that kind of risk.

In other words, when we evaluate CEO Sprinters for what made them successful, and point to bold moves, we have to account for the risk inherent to such bold moves and for all the “sprinters” who never made it. Or else, we are just evaluating a gamble.  We aren’t evaluating a skill.  That’s, after all, what a great–truly seasoned–CEO does in real life.  They don’t take bold leaps willy nilly. They evaluate risks and returns…and make decisions accordingly.

I liken the HBR article referenced to a never-written article on how to play winning blackjack that points to how the “big winners” in blackjack made very large bets at very opportune moments.  Sure they did.  But a lot of people who followed that strategy–in fact if you believe in statistics almost all who follow that strategy–lose…bigtime.

If you are reading this post and thinking about your career “catapults,” I’ll encourage you to think about taking calculated risks, not gambles. That means that the core insights of the HBR article are, in fact, pretty cool; but they need a healthier dose of realism to be actionable.

So, don’t just look at anecdotal CEOs who have “made it” as role models for how to make it. Just because your CEO made his name be moving his family to Myanmar and turning around a manufacturing plant there doesn’t mean that the path to CEO is through malaria and dengue.

He might have survived a really stupid career move.  Sure, you can make it to CEO quickly by making a series of risky, possibly stupid, but lucky career moves…but you won’t necessarily stay there long.

And, that’s just it: survivorship bias is endemic to evaluating those sitting in such rare roles. You might say that there are old CEOs, and there are bold CEOs, but very few old, bold CEOs.

What do you think? 

Your strategy really does need to contemplate WAR

Where does true value add come in to your business or professional strategy?

Geoff Wilson

Hedge fund and other investment managers call it alpha. That’s the value a particular investment or configuration of investments creates after you strip away all the risk taken by making the investment.

Baseball statisticians call it WAR, or “Wins Above Replacement.” That’s the number of wins a particular player theoretically accounts for by being on the field instead of a backup player.

Any old general manager might simply call it value add.  That’s the very tired but still useful term for what’s added to a product or service that a customer actually wants.

Choices, choices

Your business strategy is about choices.  In running your business or building your career, you are going to make two very important choices.

One is about where to play.  That’s about what kinds of customers to serve, what segments to specialize in, or what company to work for.

The other is about how to win.  That’s about what value proposition you are going to offer the world.  This is true for you as an individual or for your company.

But, here’s the rub:  In thinking about these choices, what you really ought to be thinking about his how to create alpha…or WAR…or value add.

In other words, the question on your mind when creating strategy is one of how to create excess risk-adjusted value in the eyes of your customer. The fundamental question should be about how you create wins for your customer above that customer’s next best alternative.  After all, the only thing sustainable (at least in the private sector) is to create excess value for customers.

The test

A good test of this that you can practice right now is to think about a current client, boss, or other customer relationship.  Take a recent case, and ask yourself: Were you a differentiating partner, or were you along for the ride?  Did you “sell” to the customer, or did you really “add value?”  The proof is in how you answer that question. Usually a positive answer comes with some kind of phrasing like “they would have had a very hard time finding a partner who could have accomplished X in that particular case…and we (or I) did that.”

That’s a “Win Above Replacement.”

That’s WAR.

That’s value add in the moment.

So what?

So many businesses have client or customer case histories that read like a “who’s who” mashed up with Good to Great and In Search of Excellence.  But when you dig into the details, the business itself was a bit player. They perhaps have some reflected glory from a project or get tremendous cachet from merely referencing a huge brand name on their customer list; but the huge brand name might say “who?”

Don’t let your business be a “who?”

Don’t just be “there.” Be alpha.  Be WAR.  Be value.

What do you think?  How do you employ a WAR mindset?

 

Two ways to grow in the new year

If you want to grow this year, do these two things.

I confess, this entire new year thing has gotten ahead of me this year.  I thought it was December and now it’s January.

The new year comes with a sense of renewal.  It comes with a sense of burying all that was “bad” last year and focusing on what we want to succeed at this year.  Only, I think that for most of us that is a totally broken approach to growth–whether growing a business or growing a career or growing a skill-set.  We tend to set resolutions that we know we will break. We stretch only to settle back into our old habits before long.

So what is a person to do in order to win in 2018 (which is right now)?

I’ll offer two things that work for me, and that I think can work for most any executive out there.

First:  Focus on the strengths that you can deploy today.  Sure, sure…you know how to find your strengths. You probably have a winning smile and a wonderful personality, but what if nobody is looking or listening?  You have a problem.  You have the same problem if you have a great product in the pipeline that won’t get out until Q3.  It doesn’t matter that you have the perfect strength “coming.”  What you do with what you have today is what matters. So, focus on what you can do…right now.

Second:  Listen to your weaknesses. This is extremely hard for most executives to do–especially those who have mastered the spin of their “greatest weakness” being simply a strength in disguise (you know the ones: they always have an answer for how their weakness isn’t really a weakness). Like it or not, most executives (not you, but people you know) got where they are by sidestepping their weaknesses, not by confronting them head on.  I’m not saying “shore up your weaknesses,” I’m saying listen to them.  Find ways to grow from what you learn about your weak supply chain, or your weak sales force, or your (personally) weak communication skills.

Building on your deployable strengths and learning from your present weaknesses might just be your recipe for “better” this year…which means better right now.

Just to show that none of this is new (you didn’t really think it was, anyway), I’ll leave you with a fantastic lyric that implores you to focus on these two objectives. It’s a piece of the song Anthem by the late Leonard Cohen.  Take a moment to read it:

Ring the bells that still can ring.

Forget your perfect offering.

There is a crack, a crack in everything.

That’s how the light gets in.

As you blast into this year, think about the bells you can still ring–now. Forget about the perfect strength–focus on what you have today. And, perhaps most importantly, find the light that comes through the cracks in your armor by listening to your weaknesses.

That’s how the light gets in.

Happy new year!

Who is defending your customer?

When you are setting strategy, who plays the customer advocate role?

Geoff Wilson

In a meeting this week with a very thoughtful management team that was in the midst of a heated discussion, the CEO made a comment that stuck with me.

He noted that one of the more direct and opinionated voices in the room was “defending the customer” while talking about strategic priorities.

And that got me thinking:  When you are building your strategy, do you ensure that the customer has an advocate in the room?  We talk about the voice of the customer as if having it in the mix automatically means something, but what if the voice of the customer doesn’t have an advocate?  What if it’s just another “opinion” in the room?

That would be a tragedy.

When you are planning your strategy, think about how to ensure that the customer’s point of view is not only known, but actively represented in the room.  That may be as simple as designating a customer advocate in your strategic discussions, or it may mean actually bringing customers into the room.

You never know what you might learn, or what you might prevent yourself from doing.

What do you think? 

 

Strategy like an immigrant

Strategy has to be a synthesis of old and new.

I spent the weekend with my daughter walking around New York City.  The city is a great one. It is, at its best, a fantastic combination of culture, ethnicity, language, foods, and styles.  While walking the Lower East Side, a thought come to mind, and I’ll do my best to develop it in 500 words or less.

U.S. political leaders like to romanticize the United States of America as a “nation of immigrants.”  We have heard this platitude so many times over the past several decades (JFK first published his book by the same name in 1958) that it has attained a sort of knee-jerk validity in everyday discourse.  Our guide on a short walking tour loved to allude to this notion.

But, the notion is actually very wrong.  And we are worse off for using it.  I’ll try to articulate my simple version of the truth, and what it means for any American business leader.

Here it goes:

We are, at our worst, a nation of conquerors.

We are, at our best, a nation of builders…a nation of synthesizers.

Our country is built on conquest. You may not like that notion but it doesn’t make it less true. Our most pervasive mindsets are built on conquest. Our most polar political ideals are based on “mine” and “not yours.”  Almost since the founding of the country, we have reveled in ideals of “winning” meant only as “doing it our way.”

But, what makes us great is synthesis.  When it comes to what really made our country great, it’s building from introduced parts.  It’s assimilation in the best sense of the word. It’s not merely coexistence or “tolerance” (a fantastically risky word), but symbiosis.  It’s immigrant Jews on the Lower East Side patronizing immigrant Chinese restaurants during the high holidays…if you will.

To be a little more tongue in cheek, it’s Mexican Pizza.

So, we have to build with full recognition that we have the conqueror’s ethos that permeates our country.

What’s the message here for a blog on business strategy?

It’s this:  In your business today, you have a way of doing things.  You have systems, processes, approaches, value propositions, cultural elements, and memes (in the traditional sense of the word) that drive your business.  Your strategy can be to either “conquer” or to “build.”  You can either take “who you are” and “what you do” and apply it to all situations old and new; or you can search for piece parts to assimilate and synthesize into a higher order of success.

This might mean forgetting some of what you knew.

It might mean inviting in new perspectives (and actually listening to them).

It might even mean looking at competitors you’d previously want to conquer as potential collaborators.

If you do strategy like an immigrant, you do strategy as synthesis.  You make better out of a few pieces of really good.

Now, I’m going to go have a bagel with ham and cheese.

 

 

Actually, the issue is that you have no vision

Single issue focus is just as bad for business as it is for government policy.  It’s vision that counts.

This post springs from the debates surrounding the tax reform legislation currently gestating in the bowels of D.C.

Interviewed on one of the many news programs early this morning was a leader of a home-building special interest group.  With great bluster, this gentleman spoke of how the capping of mortgage interest deductions for mortgages above $500,000 would be detrimental to home values, and because of that it is ultimately a bad idea.

This guy was a single-issue representative–the very personification of a “special” interest lobbyist with a single issue to flog up on Capitol Hill.  The interview was admirable for its pureness; but it was cautionary for a single reason: It lacked any nod toward vision for what the government ought to subsidize through tax policy.  When you are a homebuilder, a lot of what you focus on is the amount of money that can flow to homebuilding.  You care a lot about whether the government decides to stop subsidizing mortgages for homes that only really wealthy people buy because, well, those kind of homes represent a lot of income for you.

What you might NOT focus on is whether the government ought to subsidize luxury housing of any kind.  A reasonable person could ask whether tax policy ought to subsidize jumbo mortgages at all.

The interview didn’t get into the role of government, it only got at the desires of a single-issue interest group; and it brought to mind an important management imperative for almost any of us:

Never, ever, allow an issue of any sort take the place of a vision.

How often do you see managers focused on productivity in a single part of the plant or shop floor, or efficiency of a single department in a company, only to have no concept of–or, indeed to work against–how the overall company delivers value for customers.

You may think you don’t see this, but you do.

You see it every time you sit on hold waiting for a customer service representative whose time was determined to be more valuable than any specific customer’s (if that weren’t the case, then why make the customer wait and the rep not wait? Hmmmm?).  You see it every time you walk around a big box retailer…searching for a person to help you find that item you are looking for.  You see it every time you receive an appointment window of 4 (or 6?) hours for a service call at your house.

These are the outcomes of single issue votes in the business world.  They are the results of a focus on efficiency (or inefficiency) in one place at the expense of the whole or, in the worst of cases, the customer.

A customer-centered vision for service would envision no customers waiting, just as a citizen-centered focus on the tax code might envision no subsidies for luxury homes.   Yet, we have special interests that win in the corporate office at the expense of the customer; and we have special interests mining the tax code in spades.

The next time you entertain that consultant who just wants to help you cut “inefficiency,” make sure you ask how that inefficiency fits within your vision for value delivery.  That consultant’s issue isn’t a vision.

Just make sure that your issue isn’t that you lack vision.

What do you think?