Archive for April, 2015

The People Business

the common vision bus

 

Things don’t happen on their own, people make them happen.

With all the new communication technologies and collaboration platforms it’s easy to forget that what really matters is people.  If people don’t trust each other, even the best collaboration platforms will fall flat, and if they don’t respect each other, they won’t communicate – even with the best technology.

Companies put stock in best practices like they’re the most important things, but they’re not.  Because of this unnatural love affair, we’re blinded to the fact people are what make best practices best.  People create them, people run them, and people improve them. Without people there can be no best practices, but on the flip-side, people can get along just fine without best practices.  (That says something, doesn’t it?) Best practices are fine when processes are transactional, but few processes are 100% transactional to the core, and the most important processes are judgement-based.  In a foot race between best practices and good judgement, I’ll take people and their judgment – every day.

Without a forcing function, there can be no progress, and people are the forcing function.  To be clear, people aren’t the object of the forcing function, they are the forcing function.  When people decide to commit to a cause, the cause becomes a reality.  The new reality is a result – a result of people choosing for themselves to invest their emotional energy.  People cannot be forced to apply their life force, they must choose for themselves.  Even with today’s “accountable to outcomes” culture, the power of personal choice is still carries the day, though sometimes it’s forced underground.  When pushed too hard, under the cover of best practice, people choose to work the rule until the clouds of accountability blow over.

When there’s something new to do, processes don’t do it – people do.  When it’s time for some magical innovation, best practices don’t save the day – people do.  Set the conditions for people to step up and they will; set the conditions for them to make a difference and they will.  Use best practices if you must, but hold onto the fact that whatever business you’re in, you’re in the people business.

Image credit – Vicki & Chuck Rogers

Strategic Planning is Dead.

Looking into the futureThings are no longer predictable, and it’s time to start behaving that way.

In the olden days (the early 2000s) the pace of change was slow enough that for most the next big thing was the same old thing, just twisted and massaged to look like the next big thing.  But that’s not the case today.  Today’s pace is exponential, and it’s time to behave that way.  The next big thing has yet to be imagined, but with unimaginable computing power, smart phones, sensors on everything and a couple billion new innovators joining the web, it should be available on Alibaba and Amazon a week from next Thursday.  And in three weeks, you’ll be able to buy a 3D printer for $199 and go into business making the next big thing out of your garage.  Or, you can grasp tightly onto your success and ride it into the ground.

To move things forward, the first thing to do is to blow up the strategic planning process and sweep the pieces into the trash bin of a bygone era.  And, the next thing to do is make sure the scythe of continuous improvement  is busy cutting waste out of the manufacturing process so it cannot be misapplied to the process of re-imagining the strategic planning process.  (Contrary to believe, fundamental problems of ineffectiveness cannot be solved with waste reduction.)

First, the process must be renamed.  I’m not sure what to call it, but I am sure it should not have “planning” in the name – the rate of change is too steep for planning.  “Strategic  adapting” is a better name, but the actual behavior is more akin to probe, sense, respond.   The logical question then – what to probe?

[First, for the risk minimization community, probing is not looking back at the problems of the past and mitigating risks that no longer apply.]

Probing is forward looking, and it’s most valuable to probe (purposefully investigate) fertile territory.  And the most fertile ground is defined by your success.  Here’s why.  Though the future cannot be predicted, what can be predicted is your most profitable business will attract the most attention from the billion, or so, new innovators looking to disrupt things.  They will probe your business model and take it apart piece-by-piece, so that’s exactly what you must do.  You must probe-sense-respond until you obsolete your best work.  If that’s uncomfortable, it should be.  What should be more uncomfortable is the certainty that your cash cow will be dismantled.   If someone will do it, it might as well be you that does it on your own terms.

Over the next year the most important work you can do is to create the new technology that will cause your most profitable business to collapse under its own weight.  It doesn’t matter what you call it – strategic planning, strategic adapting, securing the future profitability of the company – what matters is you do it.

Today’s biggest risk is our blindness to the immense risk of keeping things as they are.  Everything changes, everything’s impermanent – especially the things that create huge profits.  Your most profitable businesses are magnates to the iron filings of disruption.  And it’s best to behave that way.

Image credit – woodleywonderworks

Change your risk disposition.

royal army parachute dogInnovation creates things that are novel, useful and successful.  Something that’s novel is something that’s different, and something that’s different creates uncertainty.  And, as we know, uncertainty is the enemy of all things sacred.

Lean and Six Sigma have been so successful that the manufacturing analogy has created a generation that expects all things to be predictable, controllable and repeatable.  Above all else, this generation values certainty.  Make the numbers; reduce variability; reduce waste; do it on time  – all mantras of the manufacturing analogy, all advocates of predictability and all enemies of uncertainty.

With the manufacturing analogy, a culture of accountability is the natural end game (especially when it comes to outcomes), but what most don’t understand is a culture that values accountability of outcomes is a culture that cannot tolerate uncertainty.  And what fewer understand is a culture intolerant of uncertainty is a culture intolerant of innovation.

By definition, innovation and uncertainty are a matched pair – you can’t have one without the other.  You can have both or neither – that’s the rule.  And though we usually use the word “risk” rather than “uncertainty”, risk is a result of uncertainty and uncertainty is the fundamental.

When a product is launched and it’s poorly received, it’s likely due to an untested value proposition. And the reason the value proposition went untested is uncertainty, uncertainty around the negative consequences of challenging authority.  Someone on high decreed the value proposition was real and the organization, based on how leadership responded in the past, did not challenge the decree because the last person who challenged authority was fired, demoted or ostracized.

When the new product is 3% better than the last one, again, the enemy is uncertainty.  This time it’s either uncertainty around what the customer will value or uncertainty around the ability to execute on technology work.  The organization cannot tolerate the risk (uncertainty), so it does what it did last time.

When the new product has more new features and functions than it has a right to, intolerance to uncertainty is the root cause.  This time it’s uncertainty around the negative consequences of prioritizing one feature over another.  Said another way, it’s about uncertainty (and the resulting fear) around using judgement.

These three scenarios are reward looking, as the uncertainty has already negatively impacted the innovation work.  To mitigate the negative impacts on innovation, uncertainty must be part of the equation from the outset.

When it’s time for you to call for more innovation, it’s also the time to acknowledge you want more uncertainty.  And it’s not enough to say you’ll tolerate more uncertainty because that takes you off the hook and puts it all on the innovators.  You must tell the company you expect more uncertainty.  This is important because the innovators won’t limit their work by an unnaturally low uncertainty threshold, rather they’ll do the work demanded by the hyper-aggressive growth goals.

And when you ask for more uncertainty, it’s time to explicitly tell people you expect them to use their judgment more freely and more frequently.  With uncertainty there is no best practice, but there is best judgment.  And when your best people use their best judgement, uncertainty is navigated in the most effective way.

But, really, if you ask for more uncertainty you won’t get it. The level of uncertainty in the trenches is set by your risk disposition.  People in your company know, based on leadership’s actions – what’s rewarded and what’s punished – the company’s risk disposition and it governs their actions. If you take the pulse of your portfolio of technology projects you will see your risk disposition.  The thing to remember is your risk disposition is the boss and the level of innovation is subservient.

When the CEO demands you change the innovation work for the better, politely suggest a plan to change the company’s risk disposition.  And when the CEO asks how to do that, politely suggest a visit to Jim McCormick’s website.

Image credit – Suzanne Gerber

Innovation is alive and well.

Old barn with ivyInnovation isn’t a thing in itself; rather, it’s a result of something. Set the right input conditions, monitor the right things in the right ways, and innovation weaves itself into the genetic makeup of your company.  Like ivy, it grabs onto outcroppings that are the heretics and wedges itself into the cracks of the organization.  It grows unpredictably, it grows unevenly, it grows slowly.  And one day you wake up and your building is covered with the stuff.

Ivy doesn’t grow by mistake – It takes some initial plantings in strategic locations, some water, some sun, something to attach to, a green thumb and patience.  Innovation is the same way.

There’s no way to predict how ivy will grow.  One young plant may dominate the others; one trunk may have more spurs and spread broadly; some tangles will twist on each other and spiral off in unforeseen directions; some vines will go nowhere.  Though you don’t know exactly how it will turn out, you know it will be beautiful when the ivy works its evolutionary magic.  And it’s the same with innovation.

Ivy and innovation are more similar than it seems, and here are some rules that work for both:

  • If you don’t plant anything, nothing grows.
  • If growing conditions aren’t right, nothing good comes of it.
  • Without worthy scaffolding, it will be slow going.
  • The best time to plant the seeds was three years ago.
  • The second best time to plant is today.
  • If you expect predictability and certainty, you’ll be frustrated.

Innovation is the output of a set of biological systems – our people systems – and that’s why it’s helpful to think of innovation as if it’s alive because, well, it is.  And like with a thriving colony of ants that grows steadily year-on-year, these living systems work well.  From 10,000 foot perspective ants and innovation look the same – lots of chaotic scurrying, carrying and digging.  And from an ant-to-ant, innovator-to-innovator perspective they are the same – individuals working as a coordinated collective within a shared mindset of long term sustainability.

Image credit – Cindy Cornett Seigle

Compete with No One

Peace VanToday’s commercial environment is fierce.  All companies have aggressive growth objectives that must be achieved at all costs.  But there’s a problem – within any industry, when the growth goals are summed across competitors, there are simply too few customers to support everyone’s growth goals.  Said another way, there are too many competitors trying to eat the same pie.  In most industries it’s fierce hand-to-hand combat for single-point market share gains, and it’s a zero sum game – my gain comes at your loss.   Companies surge against each other and bloody skirmishes break out over small slivers of the same pie.

The apex of this glorious battle is reached when companies no longer have points of differentiation and resort to competing on price.  This is akin to attrition warfare where heavy casualties are taken on both sides until the loser closes its doors and the winner emerges victorious and emaciated.  This race to the bottom can only end one way – badly for everyone.

Trench warfare is no way for a company to succeed, and it’s time for a better way.  Instead of competing head-to-head, it’s time to compete with no one.

To start, define the operating envelope (range of inputs and outputs) for all the products in the market of interest.  Once defined, this operating envelope is off limits and the new product must operate outside the established design space.  By definition, because the new product will operate with input conditions that no one else’s can and generate outputs no one else can, the product will compete with no one.

In a no-to-yes way, where everyone’s product says no, yours is reinvented to say yes.  You sell to customers no one else can; you sell into applications no one else can; you sell functions no one else can.  And in a wicked googly way, you say no to functions that no one else would dare.  You define the boundary and operate outside it like no one else can.

Competing against no one is a great place to be – it’s as good as trench warfare is bad – but no one goes there.  It’s straightforward to define the operating windows of products, and, once define it’s straightforward to get the engineers to design outside the window.  The hard part is the market/customer part.  For products that operate outside the conventional window, the sales figures are the lowest they can be (zero) and there are just as many customers (none).  This generates extreme stress within the organization.  The knee-jerk reaction is to assign the wrong root cause to the non-existent sales.  The mistake – “No one sells products like that today, so there’s no market there.”  The truth – “No one sells products like that today because no one on the planet makes a product like that today.”

Once that Gordian knot is unwound, it’s time for the marketing community to put their careers on the line.  It’s time to push the organization toward the scary abyss of what could be very large new market, a market where the only competition would be no one.  And this is the real hard part – balancing the risk of a non-existent market with the reward of a whole new market which you’d call your own.

If slugging it out with tenacious competitors is getting old, maybe it’s time to compete with no one.  It’s a different battle with different rules.  With the old slug-it-out war of attrition, there’s certainty in how things will go – it’s certain the herd will be thinned and it’s certain there’ll be heavy casualties on all fronts.  With new compete-with-no-one there’s uncertainty at every turn, and excitement. It’s a conflict governed by flexibility, adaptability, maneuverability and rapid learning.  Small teams work in a loosely coordinated way to test and probe through customer-technology learning loops using rough prototypes and good judgement.

It’s not practical to stop altogether with the traditional market share campaign – it pays the bills – but it is practical to make small bets on smart people who believe new markets are out there.  If you’re lucky enough to have folks willing to put their careers on the line, competing with no one is a great way to create new markets and secure growth for future generations.

Image credit – mae noelle

Mike Shipulski Mike Shipulski
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