With innovation, it depends.

By definition, when the work is new there is uncertainty.  And uncertainty can be stressful. But, instead of getting yourself all bound up, accept it.  More than that, relish in it.  Wear it as a badge of honor.  Not everyone gets the chance to work on something new – only the best do.  And, because you’ve been asked to do work with a strong tenor of uncertainty, someone thinks you’re the best.

But uncertainty is an unknown quantity, and our systems have been designed to reject it, not swim in it.  When companies want to get serious they drive toward a culture of accountability and the new work gets the back seat.  Accountability is mis-mapped to predictability, successful results and on time delivery.  Accountability, as we’ve mapped it, is the mortal enemy of new work.  When you’re working on a project with a strong element of uncertainty, the only certainty is the task you have in front of you.  There’s no certainty on how the task will turn out, rather, there’s only the simple certainty of the task.

With work with low uncertainty there are three year plans, launch timelines and predictable sales figures. Task one is well-defined and there’s a linear flow of standard work right behind it – task two through twenty-two are dialed in. But when working with uncertainty, the task at hand is all there is.  You don’t know the next task.  When someone asks what’s next the only thing you can say is “it depends.”  And that’s difficult in a culture of traditional accountability.

An “it depends” Gannt chart is an oxymoron, but with uncertainty step two is defined by step one.  If A, then B.  But if the wheels fall off, I’m not sure what we’ll do next.  The only thing worse than an “it depends” Gantt chart is an “I’m not sure” Gannt chart.  But with uncertainty, you can be sure you won’t be sure.  With uncertainty, traditional project planning goes out the window, and “it depends” project planning is the only way.

With uncertainty, traditional project planning is replaced by a clear distillation of the problem that must be solved.  Instead of a set of well-defined tasks, ask for a block diagram that defines the problem that must be solved.  And when there’s clarity and agreement on the problem that must be solved, the supporting tasks can be well-defined.  Step one – make a prototype like this and test it like that. Step two – it depends on how step one turns out.  If it goes like this then we’ll do that.  If it does that, we’ll do the other.  And if it does neither, we’re not sure what we’ll do.  You don’t have to like it, but that’s the way it is.

With uncertainty, the project plan isn’t the most important thing.  What’s most important is relentless effort to define the system as it is.  Here’s what the system is doing, here’s how we’d like it to behave and, based on our mechanism-based theory, here’s the prototype we’re going to build and here’s how we’re going to test it.  What are we going to do next?  It depends.

What’s next? It depends. What resources do you need? It depends. When will you be done? It depends.

Innovation is, by definition, work that is new.  And, innovation, by definition, is uncertain.  And that’s why with innovation, it depends.  And that’s why innovation is difficult.

And that’s why you’ve got to choose wisely when you choose the people that do your innovation work.

Image credit – Sara Biljana Gaon (off)

The Causes and Conditions for Innovation

Everyone wants to do more innovation.  But how? To figure out what’s going on with their innovation programs, companies spend a lot of time to put projects into buckets but this generates nothing but arguments about whether projects are disruptive, radical innovation, discontinuous, or not.  Such a waste of energy and such a source of conflict.  Truth is, labels don’t matter.  The only thing that matters is if the projects, as a collection, meet corporate growth objectives.  Sure, there should be a short-medium-long look at the projects, but, for the three time horizons the question is the same – Do the projects meet the company’s growth objectives?

To create the causes and conditions for innovation, start with a clear growth objective by geography.  Innovation must be measured in dollars.

Good judgement is required to decide if a project is worthy of resources.  The incremental sales estimates are easy to put together.  The difficult parts are deciding if there’s enough sizzle to cause customers to buy and deciding if the company has the chops to do the work.  The difficulty isn’t with the caliber of judgement, rather it’s insufficient information provided to the people that must use their good judgement.  In shorth, there is poor clarity on what the projects are about. Any description of the projects blurry and done at a level of abstraction that’s too high.  Good judgement can’t be used when the picture is snowy, nor can it be effective with a flyby made in the stratosphere.

To create the causes and conditions for innovation, demand clarity and bedrock-level understanding.

To guarantee clarity and depth, use the framework of novel, useful, successful. Give the teams a tight requirement for clarity and depth and demand they meet it.  For each project, ask – What is the novelty? How is it useful? When the project is completed, how will everyone be successful?

A project must deliver novelty and the project leader must be able to define it on one page.  The best way to do this is to create physical (functional) model of the state-of-the-art system and modify it with the newness created by the project (novelty called out in red).  This model comes in the form of boxes that describe the system elements (simple nouns) and arrows that define the actions (simple verbs).  Think hammer (box – simple noun) hits (arrow -simple verb) nail (box – simple noun) as the state-of-the-art system and the novelty in red – a thumb protector (box) that blocks (arrow) hammer (box).  The project delivers a novel thumb protector that prevents a smashed thumb.  The novelty delivered by the project is clear, but does it pass the usefulness test?

To create the causes and conditions for innovation, demand a one-page functional model that defines and distills down to bedrock level the novelty created by the project.  And to help the project teams do it, hire a good teach teacher and give them the tools, time and training.

The novelty delivered by a project must be useful and the project leader must clearly define the usefulness on one page.  The best way to do this is with a one page hand sketch showing the customer actively using the novelty. In a jobs-to-be-done way, the sketch must define where, when and how the customer will realize the usefulness. And to force distillation blinding, demand they use a fat, felt tip marker. With this clarity, leaders with good judgement can use their judgement effectively. Good questions flow freely. Does every user of a hammer need this? Can a left-handed customer use the thumb guard? How does it stay on? Doesn’t it get in the way? Where do they put it when they’re done? Do they wear it all the time?  With this clarity, the questions are so good there is no escape.  If there are holes they will be uncovered.

To create the causes and conditions for innovation, demand a one-page hand sketch of the customer demonstrating the useful novelty.

To be successful, the useful novelty must be sufficiently meaningful that customers pay money for it.  The standard revenue projections are presented, but, because there is deep clarity on the novelty and usefulness, there is enough context for good judgement to be effective.  What fraction of hammer users hit their thumbs? How often? Don’t they smash their fingers too?  Why no finger protection?  Because of the clarity, there is no escape.

To create the causes and conditions, use the deep clarity to push hard on buying decisions and revenue projections.

The novel, useful, successful framework is a straightforward way to decide if the project portfolio will meet growth objectives.  It demands a clear understanding of the newness created by the project but, in return, provides context needed to use good judgement.  In that way, because projects cannot start without passing the usefulness and successfulness tests, resources are not allocated to unworthy projects.

But while clarity and this level of depth is a good start, it’s not enough.  It’s time for a deeper dive. The project must distill the novelty into a conflict diagram, another one-pager like the others, but deeper.  Like problem definition on steroids, a conflict must be defined in space – between two things (thumb and face of hammer head) – and time (just as the hammer hits thumb).  With that, leaders can ask before-during-after questions.  Why not break the conflict before it happens by making a holding mechanism that keeps the thumb out of the strike zone? Are you sure you want to solve it during the conflict time (when the hammer hits thumb)?  Why not solve it after the fact by selling ice packs for their swollen thumbs?

But, more on the conflict domain at another time.

For now, use novel, useful, successful to stop bad projects and start good ones.

Image credit – Natashi Jay

You can’t control much with innovation, but you can control how you allocate resources.

In business, the only direct lever to pull is resource allocation. The people are already on the books, just change what they work on. But pulling that off is difficult.

No need to wait for new hires, just move resources from one project to another.  Stop project A and start project B.  Simple, right? Not so much. Emotional attachment causes project A to defend their resources and project B to complain the resources haven’t moved. Resources will be slow to flow.

No need to take the time to develop new capability, just reassign capable resources from business 1 to business 2 and watch progress unfold. No problem, right? Wrong. There’s immense organizational drama from prioritizing one business over another. Again, the pace of resource flow will be glacial.

And with innovation, the drama is doubled. It’s threatening when resources flow from mainstream projects with tangible (but small) returns to more speculative projects with highly uncertain returns.  But that’s what must happen.

If there’s a mismatch between the words and resource allocation, believe resource allocation.

If the innovation banners are plastered on all the walls and everyone has the tee shirt, yet the resources don’t flow to the innovation work, it’s an innovation farce. Run away.  Here’s what the four HOWs of innovation look like through the lens of resource allocation.

How To Start. Define the yearly funding level for innovation resources that is independent of the yearly planning process.  In short, create an innovation tax at a fixed percentage of revenue.  This gets funded before anything else.  It’s the pay-yourself-first approach to innovation. And when the money is allocated and the resources flow, there’s no need for banners and tee shirts.  Alignment comes with the money.

Next, choose a leader to put in place standing processes to continuously funnel project ideas into a common hopper.  One pile for all ideas – university research, mergers and acquisitions, voice of the technology, voice of the customer (direct observation and listening), patents and YouTube videos of purposeful misuse of your product.

How To Choose. Define funding levels across the various flavors of projects in the portfolio and set up a standing meeting for senior leaders to choose the best projects. This selection process is light on analysis and heavy on judgment, so allocate leaders who are not afraid to use good judgement. And set up a standing meeting with the CEO to pace the selection work (make sure senior leaders allocate their time.)

How To Execute. Internal, external, or partner, the work defines the right way to allocate resources.  Based on the work, choose the right organization and the best leader and fully staff the project before considering a second project.  The most popular failure mode is running too many projects in parallel and getting none done.  The second popular failure mode forgetting to fund the support resources needed for innovation.  Allocate money for tools, time, training and a teacher. Establish a standing meeting where senior leaders review the projects.  This must be outside the review process normal projects.

How To Improve. No one ever allocates time to do this.  To get the work done, trick the system and include the work as a standing agenda item in the How To Execute review meetings.  Find a problem, fix a problem. Improve as you go.

Allocate the best resources to the best projects and make sure senior leaders allocate time to the innovation work. The best predictors of successful innovation are the character of the fully-staffed, fully-funded projects and the character of people that run them.

Image credit – conorwithonen

Understanding the trajectory of the competitive landscape

Bullseye!If you want to gain ground on your competition you’ve first got to know where things stand.  Where are their advantages? Where are your advantages?  Where is there parity? To quickly understand the situations there are three tricks: stay at a high level, represent the situation in a clear way and, where possible, use public information from their website.

A side-by-side comparison of the two companies’ products is the way to start.  Create a common set of axes with price running south to north and performance (or output) running west to east.  Make two copies and position them side-by-side on the page – yours on the left and theirs directly opposite on the right.  Go to their website (and yours) and make a list of every product, its price and its output. (For prices of their products you may have to engage your sales team and your customers.) For each of your products place a symbol (the company logo) on your performance-price landscape and do the same for their products on their landscape.  It’s now clear who has the most products, where their portfolio outflanks yours and where you outflank them.  The clarity and simplicity will help everyone see things as they are – there may be angst but there will be no confusion and no disagreement. The picture is clear.  But it’s static.

The areal differences define the gaps to close and the advantages to exploit.  Now it’s time to define the momentum and trajectories of the portfolios to add a dynamic element. For your most recent product launch add a one next to its logo, for the second most recent add a two and for the third add three. These three regions of your portfolio are your most recent focus areas. This is your trajectory and this is where you have momentum.  Extend and arrow in the direction of your trajectory.  If you stay the course, this is where your portfolio will add mass. Do the same for your competitor and compare arrows.  You know have a glimpse into the future. Are your arrows pointing in the same directions as theirs? Are they located in the same regions? How would feel if both companies continued on their trajectories? With this addition you have glimpse into the stay-the-course future.  But will they stay the course? For that you need to look at the patent landscape.

Do a patent search on their patents and applications over the previous year and represent each with its most descriptive figure. Write a short thematic description for each, group like themes and draw a circle around them.  Mark the circle with a one to denote last year’s patents.  Repeat the process for two years ago and three years ago and mark each circle accordingly.  Now you have objective evidence of the future.  You know where they have been working and you know where they want to go. You have more than a glimpse into the future.  You know their preferred trajectories.  Reconcile their preferred trajectories with their price-performance landscapes and arrows 1, 2 and 3.  If their preferred trajectories line up with their product momentum, it’s business as usual for them.  If they contradict, they are playing a different game.  And because it takes several years for patent applications to publish, they’ve been playing a new game for a while now.

Repeat the process for your patent landscape and flop it onto your performance-price landscape.  I’m not sure what you’ll see, but you’ll know it when you see it.  Then, compare yours with theirs and you’ll know what the competitive landscape will look like in three years. You may like what you see, or not.  But, the picture will be clear. There may be discomfort, but there can be no arguments.

This process can also be used in the acquisition process to get a clear picture a company’s future state.  In that way you can get a calibrated view three years into the future and use your crystal ball to adjust your offer price accordingly.

Image credit – Rob Ellis

Learning at the expense of predicting.

john_william_waterhouse_-_the_crystal_ballWhen doing new things there is no predictability. There’s speculation, extrapolation and frustration, but no prediction. And the labels don’t matter.  Whether it’s called creativity, innovation, discontinuous improvement or disruption there’s no prediction.

The trick in the domain complexity is to make progress without prediction.

The first step is to try to define the learning objective.  The learning objective is what you want to learn. And its format is – We want to learn that [fill in the learning objective here].  It’s fastest to tackle one learning objective at a time because small learning objectives are achieved quickly with small experiments.  But, it will be a struggle to figure out what to learn.  There will be too many learning objectives and none will be defined narrowly.  At this stage the fastest thing to do is stop and take a step back.

There’s nothing worse than learning about the wrong thing.  And it’s slow. (The fastest learning experiments are the ones that don’t have to be run.) Before learning for the sake of learning, take the necessary time to figure out what to learn. Ask some questions: If it worked could it reinvent your industry? Could it obsolete your best product? Could it cause competitors to throw in the towel?  If the answer is no, stop the project and choose one where the answer is yes. Choose a meaningful project, or don’t bother.

First learning objective – We want to learn that, when customers love the new concept, the company will assign appropriate resources to commercialize it.  If there’s no committment up front, stop.  If you get committment, keep going. (Without upfront buy-in the project relies on speculation, the wicked couple of prediction and wishful thinking.)

Second learning objective – We want to learn that customers love the new concept.  This is not “I think customers will love it.” or “Customers may love it.” In the standard learning objective format – We want to learn that [customers love the new concept].  Next comes the learning plan.

What will you build for customers to help them understand the useful novelty of the revolutionary concept?  For speed’s sake, build a non-functional prototype that stands for the concept.  It’s a thin skin wrapped around an empty box that conveys the essence of the novelty.  No skeleton, just skin.  And for speed’s sake, show it to fewer customers than you think reasonable.  And define the criteria to decide they love it.  There’s no trick here. Ask “Do they love it?” and use your best judgement.  At this early stage, the answer will be no.  But they’ll tell you why they don’t love it, and that’s just the learning you’re looking for.

Use customer input to reformulate the learning objective and build a new prototype and repeat.  The key here is to build fast, test fast, learn fast and repeat fast.  The art becomes defining the simplest learning objectives, building the simplest prototypes and making decisions with data from the fewest customers.

With complexity and newness prediction isn’t possible. But learning is.

And learning doesn’t have to take a lot of time.

Image credit — John William Waterhouse

Why not start?

startIt doesn’t matter where the journey ends, as long as it starts.

After starting, don’t fixate on the destination, focus on how you get there.

A long project doesn’t get shorter until you start. Neither does a short one.

Start under the radar.

When a project is too big to start, tear off a bite-sized chunk, chew it and swallow.

Sometimes slower is faster, but who cares. You’ve started.

If you can’t start, help some else start. You’ll both be better for it.

Fear blocks starting. But if you’re going to be afraid, you might as well start.

The only way to guarantee failure is to fail to start.

After you start, tell your best friend.

When starting, be clear on your location and less clear on the destination.

You either start or you don’t. With starting, there’s no partial credit.

Don’t start unless you’re going to finish.

Starting is scary, right up until you start.

The best way to free up time to start a good project is to stop a bad one.

Sometimes it’s best to stop starting and start finishing.

You don’t need permission to start. You just need to start.

Start small. If that doesn’t work, start smaller.

In the end, starting starts with starting.

And if you don’t start you can’t finish.


Image credit — jakeandlindsay

Sometimes things need to get worse before they can get better.

the-simpsons-sea-captainAll the scary words are grounded in change.  Innovation, by definition, is about change.  When something is innovative it’s novel, useful and successful.  Novel is another word for different and different means change.  That’s why innovation is scary.  And that’s why radical innovation is scarier.

Continuous improvement, where everything old is buffed and polished into something new, is about change.  When people have followed the same process for fifteen years and then it’s improved, people get scared.  In their minds improved isn’t improved, improved is different.  And different means change.  Continuous improvement is especially scary because it makes processes more productive and frees up people to do other things, unless, of course, there are no other things to do.  And when that happens their jobs go away.  Every continuous improvement expert knows when the first person loses their job due to process improvement the program is dead in the saddle, yet it happens.  And that’s scary on a number of fronts.

And then there’s disruption. While there’s disagreement on what it actually is, there is vicious agreement that after a disruption the campus will be unrecognizable. And unrecognizable things are unrecognizable because they are different from previous experience. And different means change.  With mortal innovation there are some limits, but with disruption everything is fair game. With disruption everything can change, including the venerable, yet decrepit, business model.  With self-disruption, the very thing responsible for success is made to go away by the people that that built it.  And that’s scary. And when a company is disrupted from the outside it can die. And, thankfully, that’s scary.

But change isn’t scary.  Thinking about change is scary.

There’s one condition where change is guaranteed – when the pain of the current situation is stronger than the fear of changing it.  One source of pain could be from a realization the ship will run aground if a new course isn’t taken.  When pain of the immanent shipwreck (caused by fear) overpowers the fear of uncharted waters, the captain readily pulls hard to starboard. And when the crew realizes it’s sink or swim, they swim.

Change doesn’t happen before it’s time. And before things get bad enough, it’s not time.

When the cruise ship is chugging along in fair seas, change won’t happen. Right before the fuel runs out and the generators quit, it’s all you can eat and margaritas for everyone.  And right after, when the air conditioning kicks out and the ice cream melts, it’s bedlam.  But bedlam is not the best way to go.  No sense waiting until the fuel’s gone to make change. Maybe someone should keep an eye the fuel gauge and let the captain know when there’s only a quarter tank.  That way there’s some time to point the ship toward the closest port.

There’s no reason to wait for a mutiny to turn the ship, but sometimes an almost mutiny is just the thing.

As a captain, it’s difficult to let things get worse so they can get better. But if there’s insufficient emotional energy to power change, things must get worse.  The best captains run close to the reef and scrape the hull.  The buffet tables shimmy, the smoked salmon fouls the deck and the liquor bottles rattle.  And when done well, there’s a deep groan from the bowels of the ship that makes it clear this is no drill.  And if there’s a loud call for all hands on deck and a cry for bilge pumps at the ready, all the better.

To pull hard in a new direction, sometimes the crew needs help to see things as they are, not as they were.

Image credit – Francis Bijl

Connection Before Numbers

thankfulCompound annual growth, profit margin, Key Business Indicators, capability indices, defects per million opportunity, confidence intervals, statistical significance, regression coefficients, temperature, pressure, force, stress, velocity, volume, inches, meters, decibels.  The numbers are supposed to tell the story.  But they don’t.

There’s never enough data to see the whole picture. But, even when the discussion is limited to topics covered by the data, people don’t see things the same way.  And even if the numbers were 100% complete, there would be no common interpretation.  And if there was a common interpretation there’d be a range of diverging opinions on how to move forward.  Even with perfect numbers, there is divergence among people.

Numbers are numb. They don’t have meaning until we attach it. And, as entities that attach meaning, we think do it rationally.  But we use past history and fear to assign meaning.  We are not rational, we’re emotional. Even the most rigorous scientist has an obsessive nature, infatuation and deep fascination.  Even when swimming in a sea of data, we’re emotional, and, therefor, irrational.

Excitement, happiness, joy, anxiety, sadness, fear, collaboration, cooperation, competition, respect, disrespect, kindness, love. We live and work in a collection of people systems where emotion carries the day. Emotion and irrationality are not bad, it’s the way it is.  We’re human. And, I’m thankful for it.

But with emotion and irrationality comes connection as part of the matched set.  If you want one, you have to buy all three. And I want connection. Connection brings out the best in people – their passion, energy and love.  When magical things happen at work, connection is responsible. And when magic happens at home, it’s connection.

I’m thankful I have strong connections.

Image credit – Irudayam

Where there’s fun there is no fear.

spinning-kyraFor those who lead projects and people, failure is always lurking in the background.  And gone unchecked, it can hobble. Despite best efforts to put a shine on it, there’s still a strong negative element to failure.  No two ways about it, failure is mapped with inadequacy and error.  Failure is seen as the natural consequence of making a big mistake.  And there’s a finality to failure.  Sometimes it’s the end of a project and sometimes it’s the end of a career.  Failure severely limits personal growth and new behavior.  But at least failure is visible to the naked eye.  There’s no denying a good train wreck.

A fumble is not failure.  When something gets dropped or when a task doesn’t get done, that’s a fumble.  A fumble is not catastrophic and sometimes not even noteworthy.  A fumble is mapped with  a careless mistake that normally doesn’t happen.  No real cause.  It just happens. But it can be a leading indicator of bigger and badder things to come, and if you’re not looking closely, the fumble can go unnoticed. And the causes and conditions behind the fumble are usually unclear or unknown.  Where failure is dangerous because everyone knows when it happens, fumbles are dangerous because they can go unnoticed.

Floundering is not fumbling. With floundering, nothing really happens.  No real setbacks, no real progress, no real energy. A project that flounders is a project that never reaches the finish line and never makes it to the cemetery.  To recognize floundering takes a lot of experience and good judgment because it doesn’t look like much. But that’s the point – not much is happening.  No wind in the sails and no storm on the horizon.  And to call it by name takes courage because there are no signs of danger.  Yet it’s dangerous for that very reason. Floundering can consume more resources than failure.

Fear is the fundamental behind failing, fumbling and floundering. But unlike failure, no one talks about fear. Talking about fear is too scary. And like fumbling and floundering, fear is invisible, especially if you’re not looking.  Like diabetes, fear is a silent killer. And where diabetes touches many, fear gets us all. Fear is invisible, powerful and prolific.  It’s a tall order to battle the invisible.

But where there’s fun there can be no fear. More precisely, there can be no negative consequence of fear. When there’s fun, everyone races around like their hair is on fire.  Not on fire in the burn unit way, but on fire in the energy to burn way. When there’s fun people help each other for no reason. They share, they communicate and they take risks.  When there’s fun no one asks for permission and the work gets done.  When there’s fun everyone goes home on time and their spouses are happy.  Fun is easy to see, but it’s not often seen because it’s rare.

If there’s one thing that can go toe-to-toe with fear, it’s fun. It’s that powerful. Fun is so powerful it can turn failure into learning.  But if it’s so powerful, why don’t we teach people to have fun? Why don’t we create the causes and conditions so fun erupts?

I don’t know why we don’t promote fun.  But, I do know fun is productive and fun is good for business.  But more important than that, fun is a lot of fun.

Image credit – JoshShculz

Good teachers don’t always look like teachers.

bug_biting_meWhen you’re laying in your camping tent dead tired and wanting for sleep the last thing you want is a rouge mosquito that dive-bombs you continuously throughout the night. With each sortie, it pushes on your expectations of how things should be. This little creature, so small and so powerless, becomes powerful enough to ruin a good night’s sleep. But, really, the mosquito itself doesn’t become powerful at all. You give the mosquito its power, power generated by a mismatch between what you want (sleep) and what is (a little bug flying around). This mismatch causes you assign intent to the mosquito which leads you to tell yourself a story of an insect on a singular mission to upset you. Truth is, the mosquito is on a mission, a mission to teach you the self destructive power of making little things into big things. The mosquito is your teacher.

When it’s time to learn, the best teachers show up as if on command. When things have been going well for a while and you’re getting a little stale, your supportive boss contracts yellow fever to make room for your teacher. Your teacher, in the form of your new boss, shows up the first day with all the wrong answers and the strong desire to standardize on them. Your teacher challenges you to look inside for the motivation to elevate your game and demands you bring creativity and clarity of unrivaled proportions. Your terrible boss doesn’t know enough to ask for the right things so you end up solving oblique problems that on the surface seem meaningless. But, because you had to solve a new problem in a new way you come up with a variant that ends up transforming your mainstream business. Your terrible boss is your teacher.

Due to an economic slowdown, the multinational you work for eliminates your division and you lose your job. As you search for a job and collect unemployment you have a little time so you start a crazy side project. It doesn’t matter if it works because it’s just a diversion from your miserable situation, so you try it. And, as it turns out the impossible is actually possible and you start a whole new business on your prototype. Your miserable situation is your teacher.

Instead of getting angry at your new situation and feeling terrible about yourself, embrace the newness and let it be your teacher. Be humble, watch it unfold and see where it takes you. Use it to see yourself differently. Use it to challenge your assumptions.

And, most importantly, as you take the wild ride, hold on to your hearts best intention.

Image credit – Andreas.

Business Models Are Finite

crooked-houseLike it or not, everything changes. The rock solid brand will erode and the venerable business model will wither and die. Though you will add immense energy to hold on to what you built, natural forces of competitive evolution will come up with something makes your best work extinct.

We see it in our everyday lives. Houses need new roofs, cars needs new tires and our kids grow out of their best clothes. Sure we do everything we can to make things last, but we know that ultimately the roof will collapse and the tires will blow out. It doesn’t matter if we don’t want it to happen. It will happen without our consent. And we can see it coming. The roof loses some shingles, some tar paper shows through in spots and we know the leaks will follow. The leaks are not wanted, but they’re not a surprise. And it’s the same with tires. They start to rumble at highway speed, they get you stuck in snow that wasn’t a problem last year and the hydroplaning is inevitable. It’s not if it’s when. You rotate them, you keep them inflated and you know they will give it up. If you’re surprised it’s because you didn’t pay attention.

But in business we deny our business models have a natural life span and we deny what worked last year will not always work next year. And like with tires the signs of wear are obvious, but we dismiss the bumpy ride and the loss of traction in the market. And when the tar paper is clearly showing through the business model and someone points it out they are ignored or even ostracized for calling attention to the deep problem. And that’s the thing – it’s too deep to acknowledge, too deep to talk about. It’s too uncertain and therefore too frightening. The fear of a dwindling reality is stronger than the fear of doing something new so we put plywood over the windows and try to ride out the storm that will only get stronger.

Plywood is good when the radar says the hurricane will last for three hours. But plywood isn’t going to cut it when the fifth hurricane in a month picks up the house and blows it into the next county. The decision to evacuate the business model and abandon what worked is a tough one. It’s emotionally charged. There are pictures on the wall of four generation of CEOs and there are memories of successful production launches and an unnamable feeling of comfort in everything, including the bad cafeteria food you grew up on.

To ignore the natural forces of change is unskillful. It’s not good for the stock price but more importantly it’s not good for your personal wellbeing. It’s emotionally draining to bury the truth from yourself and it’s an immense waste of resources to continually prop up something that should be evacuated.

It’s not safer to bury your head in the sand. Call attention to the leaky roof and point out that people aren’t supposed to need to add air to leaky tires every other day. And when they dismiss you, don’t accept it. No one can dismiss you without your consent. Don’t give it to them.

Image credit – Don McCullough

Mike Shipulski Mike Shipulski
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