Established companies must be startups, and vice versa.

oppositesFor established companies, when times are good, it’s not the right time to try something new – the resources are there but the motivation is not; and when times are tough it’s also the wrong time to try something new – the motivation is there but the breathing room is not.  There are an infinite number of scenarios, but for the established company it’s never a good time to try something new.

For startup companies, when times are good, it’s the right time to try something new – the resources are there and so is the motivation; and when times are tough it’s also the right time to try something new – the motivation is there and breathing room is a sign of weakness.  Again, the scenarios are infinite, but for the startup is always a good time to try something new.

But this is not a binary world. To create new markets and new customers, established companies must be a little bit startup, and to scale, startups must ultimately be a little bit established. This ambidextrous company is good on paper, but in the trenches it gets challenging. (Read Ralph Ohr for an expert treatment.)  The establishment regime never wants to do anything new and the startup regime always wants to.  There’s no middle ground – both factions judge each other through jaded lenses of ROI and learning rate and mutual misunderstanding carries the day.  Trouble is, all companies need both – established companies need new markets and startups need to scale. But it’s more complicated than that.

As a company matures the balance of power should move from startup to established.  But this tricky because the one thing power doesn’t like to do is move from one camp to another. This is the reason for the “perpetual startup” and this is why it’s difficult to scale.  As the established company gets long in the tooth the balance of power should move from the establishment to the startup.  But, again, power doesn’t like to change teams, and established companies squelch their fledgling startup work. But it’s more complicated, still.

The competition is ever-improving, the economy is ever-changing and the planet is ever-warming.  New technologies come on-line, and new business models test the waters. Some work, some don’t.  Huge companies buy startups just to snuff them out and established companies go away.  The environment is ever-changing on all fronts.  And the impermanence pushes and pulls on the pendulum of power dynamics.

All companies want predictability, but they’ll never have it.  All growth models are built on rearward-looking fundamentals and forward-looking conjecture.  Companies will always have the comfort of their invalid models, but will never the predictability they so desperately want.  Instead of predictability, companies would be better served by a strong sense of how it wants to go about its business and overpowering genetics of adaptability.

For a strong definition of how to go about business, a simple declaration does nicely. “We want to spend 80% of our resources on established-company work and 20% on startup-company work.” (Or 90-10, or 95-5.)  And each quarter, the company measures itself against its charter, and small changes are made to keep things on track.  Unless, of course, if the environment changes or the business model runs out of gas.  And then the company adapts.  It changes its approach and it’s projects to achieve its declared 80-20 charter, or, changes the charter altogether.

A strong charter and adaptability don’t seem like good partners, but they are.  The charter brings focus and adaptability brings the change necessary to survive in an every-changing environment.  It’s not easy, but it’s effective.  As long as you have the right leaders.

Image credit – Rick Abraham1

When on vacation, be on vacation.

monks avoid unintended time travelAs vacation approaches the work days drag. Sure you’re excited about the future, but when compared to the upcoming pleasantness, the daily grind feels more like a prison.  Anticipating a good time in the future rips you from the present moment and puts you in a place you’d rather be.  And when you don’t want to be where you are, wherever you are becomes your jail cell.

Mid-way through vacation, as the work days approach, you push yourself into the future and anticipate the stress and anxiety of the work day.  Though vacation should be fun, the stress around the workday and the impending loss of vacation prevent your full engagement in the perfect now.  I’m not sure why, but for some reason your brain doesn’t want to be on vacation with you.  It’s difficult to think of your perfect vacation as your jail cell, but while your brain is disembodied, I think it is.

And when vacation is over and you return to work, it’s pretty clear you’re back in jail.  You put yourself back in the past of your wonderful vacation; compare your cubicle your previous poshness; and make it clear to yourself that you’d rather be somewhere else. And the better your vacation, the longer your jail time.

But it’s easier to see how we use unpleasant situations to build our jail cells.  Our aversion to uncomfortable situations pushes us into the past to beat ourselves up over uncontrollable factors we think we should have recognized and controlled.  We turn a simple unpleasant situation into a jail cell of self-judging.  Or, we push ourselves into the future and generate anxiety around a sea of catastrophic consequences, none of which will happen.  Instead of building jails, it’s far more effective to let ourselves feel the unpleasantness for what it is (the result of thoughts of our own making) and let it dissipate on its own.

The best way to become a jail breaker is to start with awareness – awareness your mind has left the present moment.  When you’re on vacation, be on vacation.  And when you’re in the middle of an unpleasant situation, sit right there in the middle of the unpleasant situation.  (No one has ever died from an unpleasant situation.)  And, as a skillful jail breaker, when you realize your mind is in the past or future, don’t judge yourself, praise yourself for recognizing your mind’s unintended time travel and get back to your vacation.

But this is more than a recipe for better vacations. It’s a recipe for better relationships and better work.  You can be all-in with the people you care about and you can be singularly focused on the most challenging work.  When someone is standing in front of you and you give them 100% of your attention, your relationship with them improves.  And when you give a problem 100% of your attention, it gets solved.

Think about the triggers that pull and push you out of the present moment (the dings of texts, the beeps of emails, or the buzzes of push notifications) and get rid of them.  At least while you’re on vacation.

People Are The Best Investment

BuddhaAnything that happens happens because of people, and anything that doesn’t happen doesn’t happen because of people.  Technology doesn’t create itself, products don’t launch themselves, companies don’t build themselves and trust doesn’t grow on its own.  Any kind of work, any kind of service, any kind of organizing – it’s all done by people.

The productivity/quality movement has been good for factories – parts move in a repeatable flow and they’re processed in repeatable ways by machines that chunk out repeatable output.  Design the process, control the inputs and turn the crank. Invest in the best machines and to do the preventative maintenance to keep them in tip-top shape.  Just follow the preventive maintenance (PM) schedule and you’ll be fine.  But when the productivity/quality movement over-extended into the people domain, things don’t go as well.

People aren’t machines, and their work product is not cookie-cutter parts.  And, there’s no standard PM schedule for people. We all know this, but we behave like people are machines – we design their work process, train them on it and measure their output. But machines are iron-based entities that don’t have consciousness and people are carbon-based beings with full consciousness.  The best machines do what their told, but the best people tell you what to do.  Machines and people are fundamentally different, but how we run them is markedly similar.

Where machines need oil, people need empathy. And for empathy you need vulnerability and for that you need trust. But there’s no standard PM schedule for trust.  There’s no flowchart or troubleshooting protocol for helping people.  What work do you give them? It depends. When do you touch base and when do you leave them alone? It depends. How much responsibility do you give them? It depends.  With machines it’s follow the PM schedule and with people – it depends.

Where machines wear out, people develop and grow. And to grow people you need to see them as they are and meet them where they are. And to do that you’ve got to see yourself as you are.  You can’t give people what they need if you add to the drama with your reactivity and you can’t discern their suffering from your projections if you’re not grounded. How much time do you spend each day to learn to dampen your reactivity?  How much time do you spend to slow your monkey mind so you can see your projections?

With machines it’s control the inputs and get what you got last time.  With people it’s maybe; it depends; don’t worry about how it will go; and why don’t you try? Growing people is much more difficult than keeping machines running smoothly.  But, there is nothing more fulfilling than helping people grow into something they couldn’t imagine.

Image credit – Benjamin Balazs




Hire people that run toward even the toughest problems.

the clown eats itIf you don’t have a problem, there’s no problem. There are no resources without a problem and certainly no focus or momentum.  If you don’t know your problem, stop.  Take time to define your problem using a single page.  Make a sketch or make a block diagram but make it clear.  Make it so the problem description stands on its own. After you’ve defined your problem and someone calls it an “opportunity”, walk away because they can’t help you.  Taking advantage of opportunities is optional, but solving problems is mission critical.  No one worth their salt works on opportunities.  Rock stars solve problems.

After you’ve gnawed on a problem for a month and it hasn’t given in, what do you do?  When you’ve thrown everything at a problem and it still stands tall, what do you do?  When you’ve tried all your tricks and the intractable problem is still blocking an already overdue product launch, what do you do?  What you do is find someone who is unafraid trade an intractable problem for a solvable one, someone who will courageously give ground with the hope of opening up new design space, someone who will unabashedly take an anti-conventional (and hopefully controversial) approach.  What you do is find a rock star.

Intractable problems are not usually intractable; rather, intractable problems are either poorly-defined problems or are the wrong problem altogether.  Either way, it takes someone with courage, usually an outsider, to redefine the problem or see it differently.  But because of pride, an outsider can be brought in only after the team has exhausted all other possibilities.  Unless there’s a problem with the problem solving team (they can’t solve the problem), there’s no problem.  And without a problem, the team won’t accept help from an outsider.

At the rodeo when the cowboy is bucked off the raging bull, the cowboy runs away from the bull but the rodeo clown runs toward the bull to distract it.  Like the rodeo clown, the problem solving rock star runs toward raging problems at full tilt.  The rock star puts it all on the line as she grabs the problem by the scruff of the neck, wrestles it to the ground and hog ties it.  There’s no shyness, just well-practiced technique wrapped in implicit knowledge.  With courage and a cloud of dust, it’s no-holds-barred problem solving until the problem gives it up. Nothing is sacred, no assumptions go unchallenged, and no details are too small to ignore.  Like rodeo clowns, rock stars know their work looks funny from the outside, but they don’t care.  All they care about is solving the problem at hand. Right here, right now.

Before your next intractable problem, take a minute to scan your organization for the special people who have the courage to run toward even the most difficult problems.  Don’t be fooled by titles, positional power or how they dress.  Look deeply because like rodeo clowns, your magical problem solvers may not look the part on the outside.

Image credit – Ed Schipul

When doing new work, you’ll be wrong.

OOPSWhen doing something from the first time you’re going to get it wrong.  There’s no shame in that because that’s how it goes with new work. But more strongly, if you don’t get it wrong you’re not trying hard enough.  And more strongly, embrace the inherent wrongness as a guiding principle.

Take Small Bites. With new work, a small scope is better than a large one.  But it’s exciting to do new work and there’s a desire to deliver as much novel usefulness as possible.  And, without realizing it, the excitement can lead to a project bloated with novelty.  With the best intentions, the project team is underwater with too much work and too little time.  With new work, it’s better to take one bite and swallow than three and choke.

Ratchet Thinking. With new work comes passion and energy.  And though the twins can be helpful and fun to have around, they’re not always well-behaved.  Passion can push a project forward but can also push it off a cliff. Energy creates pace and can quickly accelerate a project though the milestones, but energy can be careless and can just as easily accelerate a project in the wrong direction.  And that’s where ratchet thinking can help.

As an approach, the objective of ratchet thinking is to create small movements in the right direction without the possibility of back-sliding.  Solve a problem and click forward one notch; solve a second problem and click forward another notch.  But, with ratchet thinking, if the third problem isn’t solved, the project holds its ground at the second notch.  It takes a bit more time to choose the right problem and to solve it in a way that cannot unwind progress, but ultimately it’s faster.  Ratchet thinking takes the right small bite, chews, swallows.

Zero Cost of Change. New work is all about adding new functions, enhancing features and fixing what’s broken.  In other words, new work is all about change. And the faster change can happen, the faster the product/service/business model is ready for sale.  But as the cost of change increases the rate of changes slows.  So why not design the project to eliminate the cost of change?

To do that, design the hardware with a bit more capability and headroom so there’s some wiggle room to handle the changes that will come.  Use a modular approach for the software to minimize the interactions of software changes and make sure the software can be updated remotely without customer involvement.  And put in place a good revision control (and tracking) mechanism.

Doing new work is full of contradictions: move quickly, but take the time to think things through; take on as much as you can, but no more; be wrong, but in the right way; and sometimes slower is faster.

But doing new work you must.

image credit – leasqueaky

Why not do new work?

Leona DriveDoing new work isn’t difficult, thinking about is difficult.  Stop thinking and start starting; there’s no other way.

If you’re a scientist, everything has a half-life.  If you’re Buddhist, everything is impermanent.  If you’re a CEO, your business model is out of gas.  It’s scary to admit everything goes away, but it’s far scarier to deny it.

Just because an idea is threatening doesn’t mean it’s threatening.  It probably means it’s one hell of a good idea.

If it’s not different, it can’t be innovation.

Projects take too long because they’re poorly defined.  On a single page, define the novel usefulness the project will deliver, make a crude prototype and show it to potential customers. Refine, learn and repeat. Then launch it.  (This is the essence of Lean Startup without all the waste.)

If I could choose my competition, I’d choose to compete with no one.

Failure is never the right word.  Don’t use it.  Ever.  (Even failing forward or forward failing should not be used.)  No one wants to fail.  No one will ever want to fail.  Replace of the word “failure” with “learning” and learn quickly.

If you’re not scared, you’re not doing innovation.

Companies offer more-with-less for as long as they can; and when there’s nothing left they offer more-with-more. It would be better to offer less-with-far-less.

For Franklin D. Roosevelt, the only thing to fear was fear itself.  For business, the only thing to fear is the cow path of success.

Image credit – JasonParis

How To Learn Quickly

ProblemsWhen the work is new, it all comes down to learning.  And with learning it all comes down to three questions:

  • What do you want to learn?
  • What actions will take to learn what you want to learn?
  • How will you decide if you learned what you wanted to learn?

There are many definitions of learning.  To me, when your beliefs change, that’s learning.  If your hunch moves to a validated idea, that’s learning.  If your understanding of a system moves from “I don’t know” to “I know a little bit.”, that’s learning.  If you believed your customers buy your product for Feature A and now you know they really buy it because of Feature B, that’s learning.

What do you want to learn? The best place to start is to clearly define what you want to learn.  Sounds easy, but it’s not. Some of the leading thinking recommends you define a formal hypothesis.  I don’t like that word.  It’s scary, intimidating and distracting.  It’s just not helpful.  Instead, I suggest you define a Learning Objective.  To do that, complete this sentence:

I want to learn if the customer ____________________.

It may take several iterations/meetings to agree on a Learning Objective, but that’s time well spent.  It’s faster to take the time to define what you want to learn than to quickly learn something that doesn’t matter.  And define the Learning Objective as narrowly as possible.  The tighter the Learning Objective, the faster you can learn it.

What actions will you take to learn what you want to learn? In other words, for every Learning Objective create a Learning Plan.  Use the Who, What, When format.  Define Who will do What and When they’ll be done.  To increase the learning rate, define the minimum work to fulfill the narrowly-defined Learning Objective.  Just as you defined the Learning Objective narrowly, define the Learning Plan narrowly.  And to further speed the learning, set constraints like – no one can travel to see customers; no more than five customers can be contacted; and the Learning Plan must be completed in two days.  You’re not looking for large sample sizes and statistical significance; you’re looking to use your best judgement supported by the minimum learning to create reasonable certainty.

How will you decide if you learned what you wanted to learn? Learning requires decisions, decisions require judgement and judgement requires supporting information.  As part of the Learning Plan, define the Learning Information you’ll collect/capture/record to support your decisions.  Audio recordings are good and video is better.  For fast learning, you can record a phone call with a customer or ask them to share their webcam (and record the feed) as you talk with them.  Or you can ask them to shoot some video with their smart phone to provide the information needed to achieve you Learning Objective.

To analyze the data, it’s best to review the audio/video as a group and talk about what you see.  You should watch for body language as well as listen to the words.  Don’t expect complete agreement among your team and expect to create follow-on Learning Objectives and Learning Plans to answer the open questions.  Repeat the process until there’s enough agreement to move forward, but don’t wait for 100% consensus.

When you present your learning to company leadership, show the raw video data that supports your learning.  Practically, you’ll connect company leaders to customers and let the customers dispel long-held biases and challenge old thinking.

There’s nothing more powerful than a customer telling your company leaders how things really are.

Image credit – Thomas Hawk

How To Create Eye-Watering Ideas

Rocket manWith creativity, the leading thinking says the most important thing is to create many of ideas.  When asked to generate many of ideas, the thinking goes, the team lets go of their inhibitions and good ideas slip through their mental filters.  I’ve found that thinking misleading.  I’ve found that creating many ideas results in many ideas, but that’s it. Before the session to create new ideas, you already had a pile of ideas you weren’t working on, and after the session is bigger, but not better.

What’s needed is several outlandish ideas that make your hair stand on end. The ideas should be so different that they cause you to chuckle to mask your discomfort.  These ideas should be borderline unbelievable and just south of impossible. The ideas should have the possibility to change the game and tip your industry on its head.

The “many ideas” thinking has the right intent – to loosen the team’s thinking so they generate good ideas, but the approach is insufficient.   To force the team to generated outlandish ideas they must be turned inside-out and put on the rack.  Heretical ideas don’t come easily and drastic measures are needed.  The team must be systematically stripped of the emotional constraints of their success using the Innovation Burst Event (IBE) method.

To prepare for the IBE, a reward-looking analysis is done to identify traditional lines of customer goodness (for example, miles per gallon for automobiles) and define how that goodness has changed over time (position it on the S-curve.)  If the improvement has been flat, it’s time for a new line of customer goodness, and if the goodness is still steadily increasing, it’s time to create a new technology that will provide the next level of improvement.  With this analysis the disposition of the system is defined and potentially fertile design space is identified.  And within this design space, design challenges are created that force the team to exercise the highly fertile design space during the IBE.

Everything about the IBE is designed to strip the team of its old thinking.  The IBE is held at an offsite location to change the scenery and eliminate reminders of traditional thinking and good food is served to help the team feel the day is special.  But the big medicine is the design challenges.  They are crafted to outlaw traditional thinking and push the team toward new thinking.  The context is personal (not corporate) and the scale of the challenge is purposefully small to help the team let go of adjacent concerns.  And, lastly, the team is given an unreasonably short time (five to ten minutes) to solve the problem and build a thinking prototype (a prototype that stands for an idea, not at functional prototype.)

Everything about the IBE helps the team let go of their emotional constraints and emit eye-watering solutions.  The design challenges force them to solve problems in a new design space in a way and does not give them a chance to limit their thinking in any way.  The unrealistic time limit is all-powerful.

Four design challenges is about all team can handle in the one-day IBE.  With the IBE they come up with magical ideas clustered around four new areas, new areas that have the potential to flip your industry on its head.  In one day, a team can define market-changing ideas that obsolete your best products and even your business model.  Not bad for one day.

It may be popular wisdom that it’s best to create many new ideas, but it’s not the best way.  And it contradicts popular belief that a team can create three or four game-changing ideas in a single day.  But the IBEs work as advertised.

Don’t waste time creating a pile of ideas.  Spend the time to identify fertile design space and hold a one-day IBE to come up with ideas that will create your future.

Image credit – moonjazz

Diabolically Simple Questions

DiabolicalToday’s work is complicated with electronic and mechanical subsystems wrapped in cocoons of software; coordination of matrixed teams; shared resources serving multiple projects; providing world class services in seventeen languages on four continents. And the complexity isn’t limited to high level elements.  There is a living layer of complexity growing on all branches of the organization right down to the leaf level.

Complexity is real, and it complicates things.  To run projects and survive in the jungle of complexity it’s important to know how to put the right pieces together and provide the right answers.  But as a leader it’s more important to slash through the complexity and see things as they are.  And for that, it’s more important to know how ask diabolically simple questions (DSQ).

Project timelines are tight and project teams like to start as soon as they can.  Too often teams start without clarity on what they’re trying to achieve.  At these early stages the teams make record progress in the wrong direction.  The leader’s job is to point them in the right direction, and here’s the DSQ to set them on their way: What are you trying to achieve?

There will likely be some consternation, arm waiving and hand wringing.  After the dust settles, help the team further tighten down the project with this follow-on DSQ:  How will you know you achieved it?

For previous two questions there are variants that works equally well for work that closer to the fuzzy front end: What are you trying to learn? and How will you know you learned it?

There is no such thing as a clean-sheet project and even the most revolutionary work builds on the existing system.  Though the existing business model, service or product has been around for a long time, the project team doesn’t really know how it works.  They know they should know but they’re afraid to admit it. Let them off the hook with this beauty: How does it work today?

After the existing system is defined with a simple block diagram (which could take a couple weeks) it’s time to help the project team focus their work.  The best DSQ for the job: How is it different from the existing system?  If the list is too long there’s too much newness and if it’s too short there’s not enough novelty.  If they don’t know what’s different, ask them to come back when they know.

After the “what’s different” line of questioning, the team must be able to dive deeper.  For that it’s time one of the most powerful DSQs in the known universe: What problem are you trying to solve? Expect frustration and complicated answers.  Ask them to take some time and for each problem describe it on a single page using less than ten words.  Suggest a block diagram format and ask them to define where and when the problem occurs.  (Hint: a problem is always between two components/elements of the system.)  And the tricky follow-on DSQ: How will you know you solved it? No need to describe the reaction to that one.

Though not an exhaustive list, here are some of my other favorite DSQs:

Who will buy it, how much will they pay, and how do you know?

Have we done this before?

Have you shown it to a real customer?

How much will it cost and how do you know?

Whose help do we need?

If the prototype works, will we actually do anything with it?

Diabolically simple questions have the power to heal the project teams and get them back on track.  And over time, DSQs help the project teams adopt a healthy lifestyle.  In that way, DSQs are like medicine – they taste bad but soon enough you feel better.

Image credit – Daniela Hartmann

Progress is powered by people.

A Little Push

People ask why.

People buy products from people.

The right people turn activity into progress.

People want to make a difference, and they do.

People have biases which bring a richer understanding.

People use judgement – that’s why robots don’t run projects.

People recognize when the rules don’t apply and act accordingly.

Business models are an interconnected collection of people processes.

The simplest processes require judgement, that’s why they’re run by people.

People don’t like good service, they like effective interaction with other people.

People are the power behind the tools.  (I never met a hammer that swung itself.)

Progress is powered by people.


Image credit – las – intially

How To Allocate Resources

shareHow a company allocates its resources defines its strategy.  But it’s tricky business to allocate resources in a way that makes the most of the existing products, services and business models yet accomplishes what’s needed to create the future.

To strike the right balance, and before any decisions on specific projects, allocate the desired spending into three buckets – short, medium and long.  Or, if you prefer, Horizon 1, 2 and 3.  Use the business objectives to set the weighting. Then, sit next to the CFO for a couple days and allocate last year’s actual spending to the three buckets and compare the actuals with how resources will be allocated going forward.  Define the number of people who will work on short, medium and long and how many will move from one bucket to another.

To get the balance right, short term projects are judged relative to short term projects, medium term projects are judged relative to medium term projects and the long term ones are judged against their long term peers.  Long term projects cannot be staffed at the expense of short term projects and medium term projects cannot take resources from long term projects.  To get the balance right, those are the rules.

To choose the best projects within each bucket, clarity and constraints are more important than ROI.   Here are some questions to improve clarity and define the constraints.

How will the customer benefit? It’s best to show the customer using the product or service or experiencing the new business model.  Use a hand sketch and few, if any, words.  Use one page.

How is it different?  In the hand sketch above, draw the novel (different) elements in red.

Who is the new customer? Define where they live, the language they speak and how they get the job done today.

Are there regional constraints?  Infrastructure gaps, such as electricity, water, transportation are deal breakers.  Language gaps can be big problems, so can regulatory, legal and cultural constraints. If a regional constraint cannot be overcome, do something else.

How will your company make money?  Use this formula: (price – cost) x volume.  But, be clear about the size of the market today and the size it could be in five years.

How will you make, sell and service it?  Include in the cost of the project the cost to overcome organizational capacity/capability constraints.  If cost (or time) to close the gaps is prohibitive, do something else.

How will the business model change?  If it won’t, strongly consider a different project.

If the investigations show the project is worthwhile, how would you staff the project and when?  This is an important one.  If the project would be a winner, but there is no one to work on it, do something else.  Or, consider stopping a bad project to start the good one.

There’s usually a general tendency to move medium term resources to short term projects and skimp on long term projects.  Be respectful of the newly-minted resource balance defined at the start and don’t choose a project from one bucket over a project from another.  And don’t get carried away with ROI measured to three significant figures, rather, hold onto the fact that an insurmountable constraint reduces ROI to zero.

And staff projects fully.  Partially-staffed projects set expectations that good things are happening, but they never come to be.

Image credit – john curley

Mike Shipulski Mike Shipulski
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