Potential: Revealed
Strategic Thinking, Innovative Ideas, Growth Marketing, and Revealing of PotentialArchive for potential
Practical Strategy
True to my intent, I have written somewhat eclectically about discovering potential, looking ahead, thinking critically and objectively and wanted to get back to a business-oriented mode for a few posts.
Many organizations (and individuals!) are scratching their heads trying to figure out how to deal with our current, unique and challenging circumstances. But they are also trying to plan for the future (with optimism that “this too shall pass” and wanting to be ready for the next set of opportunities and challenges). I applaud any form of optimism! And so, I have a practical tool for use in getting some strategic thinking and planning done, which seems especially useful in these times as an overdone, over-wrought approach will be overkill when “directionally correct” might be all that is needed until some of the uncertainties and issues of the current time pass. I would argue though that even in more certain times, the approach I’ll write about in this and subsequent posts is useful and gets most any organization beyond being stuck in the present and looking ahead with a critical and purposeful eye.
The approach I advocate is squarely focused on getting a specific vision and strategy down on paper – and will serve as a very powerful tool to also use in successive iterations (a critical component of the strategy process as a one-time vision and strategy exercise might not even be worth the effort).
What I also like about this approach is that it uses language and key words that were not “strategy double-speak” and won’t put off the executives and other participants who often tune out of a strategy exercise because of preconceived notions about strategy, consultants, etc. (i.e., ”too complicated”, “too high level”, “not executable”).
The approach also ensures completeness without being overly complex and strenuous as a management team exercise. I often say when about to embark on this process that I want the team to “work out”, not “wear out”, their thinking capacity.
I call it Practical Strategy because of the definition of the word “practical”: \ˈprak-ti-kəl\, adj., useful and no-nonsense.
There are two basic steps to the process, with the second working through and answering a series of questions. I’ll summarize the first step in this post, and then work through the second part and the questions in a couple of subsequent posts. The first step is to articulate a long range vision for the business. This can sound too simple on the surface. A good vision is not just a statement that gets put onto posters, inside annual reports, or laminated on cards handed out to employees and customers. Getting it right is hard work but needn’t be a too-long effort. It must be clear, specific and define the place for the business to aspire reaching (but with no set time horizon). A test will be that a good vision statement can be decomposed and set the boundaries for and guide the answering of the subsequent questions in this exercise. If it fails this basic test, the vision is not practical and should be refined.
I’ll give an example. The practical vision for Domino’s Pizza: “Make and deliver a fresh, hot, high-quality pizza to the customer’s home within 30 minutes or less.” Several things:
- this makes clear what value is to be delivered – fresh, hot and high-quality. Any one of these may be sufficient, why choose all three? Knowing why make subsequent decisions about business model, operational strategies and so forth quite clear
- a key differentiator is articulated – 30 minutes or less (and in their advertising they backed this with a guarantee-or-free offer)
- a key operational characteristic is defined – to the customer’s home. If taken literally (which they did), this kept them focused on the home delivery model and away from building sit-down or walk-in or stores, and has clear direction for their location and logistics strategies.
- even the omission of something can be useful — the vision only mentions pizza. No mention of other products or open-ended placeholders for other foods or items that could be thrown in. It is about pizza, plain and simple.
Not all businesses are as simple as Domino’s. Or is it that not all businesses go to trouble of defining their businesses in such clear and practical ways? I’m sure the answer is in the middle somewhere but I will argue it falls toward the latter.
As always I welcome your feedback and look for a post soon on the first of the questions that must be answered to complete the rest of the Practical Strategy process.
Adversity is an Opportunity
On a plane ride home recently I read a review of a family biography of Henry James, Sr. and his remarkable children. One son, Henry, Jr. was one of the great novelists of all time. Another, William was an intellectual powerhouse and author of the breakthrough work “The Fundamentals of Psychology”. The interesting thing was the odd and hardly idyllic – shall we say “difficult” – familial environment they endured. But it didn’t end there. It wasn’t enough to have an unusual father – one who traipsed around Europe with his family in tow, never putting down roots, subjecting his children to his unique “theories” on education, spirituality, and life and never giving them any chance for normalcy — it was an on-going family saga of unending and dramatic ups and downs which Henry Jr. and William endured throughout their own adult lives.
Why am I writing about these people? Before I say, let me take a tangent to another topic. Recently our adult Sunday school class watched a program about and discussed Randy Pausch’s “Last Lecture” . The story is famous enough that I’ll spare any details of it (although I cannot recommend it enough). What our class discussed, inspired by Randy’s lecture and life, and what we asked ourselves was: “what are the lessons you would like to leave behind for your children when you die?”
The one I offered was “to persevere”. I said the usual trite stuff we heard as kids about “if at first you don’t succeed, try, try again” and “nothing ventured, nothing gained” and that this would teach my kids to have stamina and courage – which have at various times in life served me well. I want my kids to learn that lesson too, I said. But reading about the James family gave me a different perspective and one that seems more insightful – and powerful. The James’ brothers (as well as Randy Pausch) didn’t endure and overcome as much as they used their life journeys instead to draw strength from, and lead them to, greatness. The challenges they faced turned out to be the “roadmap”, revealing the path to greatness. Why? Because they embraced their life and experiences, continually mixing all of them – the difficult and the tragic, with the good and the bland – until something worthy and satisfying emerged.
So, I’m changing my lesson for my children. While persevering is not a bad lesson to learn, it sounds too episodic to me now, like advising them to simply get over the hump, and just admonishing them to “leave your troubles behind you”. Revealing your potential for greatness is a process (like rocks being polished into gems, a beautiful pearl being developed by an oyster as protection against harmful bacteria), and an attitude that adversity is an opportunity to improve and add to your current greatness.
Cloudy Thinking
Here’s an interesting way to think about Latent Value. And feel free to tell me if you agree or not!
The Latent Value of a business opportunity can be expressed as a function (think mathematics). Simply stated, Latent Value can be expressed as a function of the total Potential Value, the Cost to Unlock the Value, and the Divisibility of the Value. The latter two are related but I see them as distinct. If the potential value is high then a high cost can possibly be tolerated if the ROI comes out favorably enough. But often companies, being nothing if not pragmatic and conservative, will decide that if the potential value cannot also be unlocked in discrete, “bite-sized” chunks then a high ROI is still insufficient to proceed. Think of it as simply risk aversion to a seemingly all or nothing bet.
Recently, I was doing some research on “cloud computing” and found a particular piece on why some companies are not jumping on this bandwagon. There is a line in the piece that says on fear stems from the “downsides of depending upon SEI (Somebody Else’s Infrastructure)”. When I read these sorts of sentiments I get concerned though (note: these are not the author of the article’s sentiments). The potential of cloud computing is quite compelling as it directly impacts the Divisibility factor of my Latent Value function above.
Consider as an example, taking advantage of business intelligence (BI) solutions offered in a “software as a service” (SaaS) model (a very mainstream version of cloud computing ).
Using existing, non-SaaS BI solutions the challenge for any organization, but particular the tens of millions of small and medium sized businesses (SMBs), to get at the Latent Value available from mining and analyzing their internal data (e.g., sales history, order patterns and mixes, etc.) and improving future sales or marketing decisions is that the Cost to Unlock is steep. But more importantly, the cost to get the first increment of Potential Value is relatively high. In other words, traditional approaches to BI have a low Divisibility factor.
In comes BI offered in the “cloud” and the overall cost potentially comes down but more importantly due to the typical low entry cost and pay-as-you-grow business model most vendors offer, there is much improved ability to achieve initially meaningful ROI. This significantly raises the Divisibility factor.
So while SEI should be a factor, it should be weighed carefully and considered against the trade-off: without SaaS a company may not be able to get at any of the Latent Value. SaaS has potential well worth checking out and continuing to monitor as it evolves and becomes more and more applicable to more businesses of all sizes.
Trust, Integrity, Accountability
Recently I was working with a client on preparations for an important meeting. The exact details of the meeting and the content are unimportant. What my client sponsor was wrestling with was concern that his peers would not act on the recommendations we were making. As I asked him more probingly about the root of his concerns he blurted out something about “our leadership team often agrees in a meeting but follow through is poor.”
Through further discussions I came up with a framework for the meeting that he seemed to like and gave him confidence that his concern about follow through could be overcome. I described the framework like this:
- ultimately establishing clear Accountability for decisions and actions is required in order for follow-through to be ensured. I said we should start off with asserting this to the meeting attendees (all of them S and E level VPs, along with the GM of the overall business unit) and giving a definition of accountability that everyone could agree to: “a willingness to be held to account for one’s promises and actions“.
- next we would say that accountability requires two foundations, first is Trust. Trust can be simply defined as ”a relationship of reliance“. The team of executives, we would say, would see in a few moments that our recommendations revealed the clear interdependencies between each of their respective areas of the business. They were reliant upon each other and their teams to achieve success. While this may go without saying, we would invite them to openly discuss any areas where they felt they could not indeed “rely” upon each other or where weaknesses existed between business area linkages. Those areas would be addressed in the meeting and cleared up or an action plan would be devised to address them as output from the meeting.
- the second foundation element for accountability was “Integrity. Integrity can be defined as an undivided or unbroken completeness or totality with nothing wanting“. We would say that often accountability is desired and trust exists yet ultimately accountability falters because what someone or some group is held accountable to lacks integrity. Sometimes this is personal integrity but more often it is the integrity of — or the lack of a factual, fact base for — what is recommended and decided to be implemented. So our final activity before dealing with the recommendations was to spend more-than-usual time on the facts behind the business problem and opportunity we were dealing with. We said grounding all the participants equally and giving all a chance to develop a solid “fact base” was critical for them to hold one another accountable for follow through. If during our discussion, we said, the facts did not hold up, additional facts were needed or more clarity was required, it was better that we postponed final decisions and reconvened with the missing data ready to present.
What was interesting was that A) everyone seemed to appreciate the open recognition of the accountability issue. It had clearly become a sort of “elephant in the room” problem, which led to B) a reasonably candid discussion of some real, but solvable trust and integrity questions and challenges, and resulted in C) a preliminary acceptance of the facts and recommendations but request for the postponment of final decisions until a few important additional facts and factors could be brought to the table for consideration at a subsequent meeting. That follow up meeting was, I’m told, one of the most productive they’d had in quite some time which they attributed to the framework my client presented and used faithfully throughout the discussions.
As most of us have learned, often it is not just what we say but how we say it that can ultimately matter. Revealing and capturing the true potential of an idea or recommendation, in this case, depended upon it.
Creative friction
Recently I posted about an interesting research article on “The Contradictions That Drive Toyota’s Success“.
In summary the authors describe three “forces of expansion” (defined as those that lead the company to instigate change and improvement) and three “forces of integration” (defined as those that stabilize the company’s expansion and transformation). The countervailing nature of these forces allow Toyota to be widely and sometimes wildly innovative, creative, and constantly renewing itself, without undue chaos or losing its very clear and constant cultural identity. In the previous post I focused on the Expansion forces. Now a thought about Integration forces.
The Integration forces are listed as Values from the founders, Up-and-in people management, and Open communcation. Each are interesting but a part of the description of Open Communication was of most interest to me. A specific aspect of open communication was “give people freedom to voice contrary opinions”. It struck me as contraditory — ah, the authors’ title for the article was starting to make sense! — that being contrary with one another would serve to integrate the culture.
Then it reminded me of the economist Joseph Schumpeter’s thoughts about creative destruction. Schumpeter asserted that the process of innovation and growth in a capitalist economy was a strong mixture of both descruction and creation occuring simultaneously. And bringing these contradictory forces together results in a stronger, more vibrant and growth-oriented economy.
In fact in the Toyota example there are several examples cited of how allowing contrary opinions had positive impact. One I particularly enjoyed was of the new head of U.S. sales ignoring “everything those top executives told me” about what should be done to succeed in the U.S. market. It had to be clear to his bosses in Japan that the U.S. sales executive was contradicting their orders long before the results of his decisions played out, yet they allowed him to make his case and then go with his own ideas. He could have been wrong, but then if he was following some of the principles from the “Forces for Expansion” (discussed in the previous post), particularly to have an experimental attitude and approach, he would have a built-in mechanism to manage the risk of failure and to continually adjust or abandon his ideas if needed.
Most organizations and leaders will say they want to “hear” contrary opinions. Few in my experience want to “allow” those contrary opinions to be freely acted upon. And in Toyota’s case it is apparently beyond allow, but to “encourage” their people to act on their contrary opinions and ideas.
Latent value, by definition, has to be revealed. Reveal is a verb and connotes action. Toyota is a great example of an organizational approach and culture that personifies, through their actions, continually discovering and “revealing potential”.
Do you agree? Are there other ingredients that lead to unlocking latent value?
Car nostalgia
The definition of nostalgia is “a fond longing for the past”. In the Atlanta Journal-Constitution recently there was an article named Cars We Love To Hate. Now, the words “fond” and “longing” as part of the definition for nostalgia might be a stretch but I did feel quite nostalgic when reading this article.
Perhaps because of the seven cars featured, I drove three of them as a teenager and as a college student: the Chevy Vega, the Chevy Corvair, and the AMC Pacer.
Notwithstanding that the first car my Dad let me drive was made infamous by Ralph Nader’s “Unsafe at Any Speed” screed, these cars did exactly what was needed: get me from point A to B, cheaply and with pretty decent reliability. The fact that I became a bondo “artist” with all of these cars (partly due to Michigan weather and road salt, partly due to cheap nature of these cars) also doesn’t ruin my recollection. I probably see these cars (plus my mom’s lovely AMC Hornet, my sisters’ AMC Rambler and Ford Fairlane — a great car!) as part of my character and shapers of my life philosophy:
Be happy with what you have (for others have worse or nothing at all), take care of that which you’ve been given, and if want something better then work hard, save and persevere until you reach your goals.
Did I say these things to my mom and dad back in the late 1970 and early 1980’s when I drove these jalopies? Doubtful. But through the lens of time — and the fact that my youth was “celebrated” in the AJC article, certainly served to improve my memories.
How about you? Any stories to share?
Experimenting leads to Expanding
Recently I read an interesting research article on “The Contradictions That Drive Toyota’s Success” that I may blog a couple times on since it was full of, well, contradictions to conventional wisdom of what makes businesses successful.
In summary the authors describe three “forces of expansion” (defined as those that lead the company to instigate change and improvement) and three “forces of integration” (defined as those that stabilize the company’s expansion and transformation. The countervailing nature of these forces allow Toyota to be widely and sometimes wildly innovative, creative, and constantly renewing itself, without undo chaos or losing its very clear and constant cultural identity. First I’ll focus on the Expansion forces.
The Expansion forces are noted as Set Impossible Goals, Local Customization, and Experimentation. Each are interesting but the Experimentation force was of particular interest. First, it is an important tool to facilitate the achievement of Impossible Goals. The culture of Toyota is one of pushing the employees to move freely outside their comfort zone and into uncharted territories through regular experiementation — and learning from both successes and failures. There is an interesting illustration from the development lifecycle of the Prius hybrid vehicle. In 1993 (yes, 1993!) they began development and first came out with a car that had 50% improvement in fuel efficiency. This was summarily rejected by Toyota executives in favor of a goal of 100% improvement. This made them look beyond conventional technologies and experiment their way through a string of failures: engines that would not start reliably, ones that could only travel a few hundred yards, battery packs that would not operate in the heat — or the cold.
Two simple concepts that Toyota employs when in experimental mode leapt out at me:
- think deeply but take small steps
- never give up
These sound trite on the surface — too simple to be truly useful. But in thinking about them further, they go together beautifully (and powerfully).
On the first concept, my experience is that many companies get caught up in what I call “mistaking action for progress”. The steps they take may be indeed small but they are not small on purpose. And regularly they admonish their employees to take steps, any steps, so that they can report on “progress” (typically upwards to those above putting the pressure on). Rather than thinking deeply (which takes time but can look like lack of progress) and purposefully breaking a goal down into small, purposeful steps, the action appears to be guided by ready-aim-fire in reverse.
The second concept also sounds too pat but again my experience is that contemporary short term business thinking precludes applying a “never give up” attitude. It is not that companies want their employees to give up at the first sign of duress but without the advantage of using a small-step approach, which carries with it the corresponding advantage of low costs for any failures, costs can mount and patience for success wanes.
Experimentation is one of the most useful and powerful tools an organization can employ. The growing availability of data on markets and customers, the open foundation of the Internet, the near instantaneous pace of all communications, and many other aspects of the current business environment make experimentation both possible — and vital.
Do you agree? Are there other ingredients to successful experimentation?
Perfection
Recently I read an excellent blog by author Neil Steinberg called Pursuing Perfection which got me thinking about this concept (yes, concept) called perfection.
Neil gives examples of where “the perfect is not always so perfect”, such as Michael Jordan failing in the final seconds of a 1995 NBA playoff game, or a sphere of pure silicon created during a space flight that upon minutely close inspection has tiny (i.e., 35 nanometer) fluctuations. Small imperfection, yes. Imperceptible to the human eye. But a flaw nonetheless.
In addition he notes that handing out of a judgment that perfection has been attained – for example gymnast Nadia Comaneci earning the first 10’s in Olympic gymnastics history in 1976 – can be momentarily satisfying but fleetingly so. Since that day in 1976, scores of 10 are both more commonplace and questionably the mark of gymnastic perfection.
So, as I like to think about, write about, consult about “revealing and attaining your potential”, I wonder if perfection is the destination, or the journey? In light of the thought that arriving at perfection somehow then ruins it, I’m inclined to choose the journey.
Yes, and…
A little while back I took a management development class (at Duke, with props to their exec ed team) that was unique and continues to have impact on my work and management thinking. It was an “improv for business” course, taught by an great full time b-school prof plus a colleague of his who is a member of 2nd City, the famous improv troupe out of Chicago (John Belushi, Bill Murray, John Candy, Bonnie Hunt, and many othersn are alumni). Some surprises from that experience:
Improv while looking chaotic and without form (and at a given moment it may be) is actually governed by some clear rules and norms.
Rather than being at odds with business improv provides a framework and method for breakthrough thinking.
Improv is first about listening, then about acting. Intense listening with the intent to truly understanding the sender’s message is the key to being a good improv player.
While there are others, and for the experienced improv player many additional and deeper levels to the world of improv, here are the most basic of rules:
1. Say yes, and. That is, agree with your stage partners, and expand from there. On a superficial level this agreement can be literal, eg. “let’s go to the gym”, “yes, and I’m going to get you RIPPED for your wedding”, but on a more fundamental level it’s about agreement between the players that if they are truly open to knew information — and trust one another — they can create something unique by building upon each others input and ideas.
2. Treat everything your partner says/does like manna from heaven. Everything is a gift, and if you take the time to really listen to/explore what he/she has said/done, there is a bounty of treasure there for you to use.
3. Make bold choices. New improvisers tend to put the onus on the other improviser to add information to the scene rather than you putting it out there themselves. You learn however that it is more productive — and more fun — to be bold and add as much to the scene every chance you have.
4. Don’t try to control the scene. Look after your own character, and trust that your scene partners are doing the same. The best scenes emerge from your interactions with others, rather than any singularly funny or outrageous thing you or another character says or does.
We did many fun group exercises over three days where we practiced listening — ensuring we truly received the message from our partners. This is not easy and revealed all of our weaknesses in this area. We also did many exercises to practice being “bold”. This rule (#3) stretches — and hopefully breaks — your natural defense against experimentation and failure. If you are going to be bold you will fail ocassionally (and a lot, at the beginning). And lastly, rule #4 played itself out over and over as we worked together and practiced improv scenarios, reminding us that the most beautiful tapestry comes from the weaving of many threads.
And in the end…
Perhaps fitting (or just cheeky?) this blog will start by stealing from one of the best. In this case, The Beatles. On their last recorded album, “Abbey Road”, they were famous for naming the supposed ending tune “The End”. Yet they rewarded those that were patient and persistent with a gem (14 seconds) after “The End” called “Her Majesty”. I loved it when I first heard it (thanks Big Sis’ who gave me the original issue 33rpm), and still love it today.
For some reason I have always been a fan of surprises. As a child, I actually liked waiting until Christmas morning to find out what presents were there for me under the tree. Later in life, I have found pleasure in the word “latent” which is defined as “present potential not yet realized or revealed”. Sort of like a surprise of a different but related sort. Looking back at personal and business experiences that I’ve enjoyed and been fortunate to be a part of, many have some aspect of latency. Whether they were reinvigorating a tired product line with a great and loyal customer base, or finding hidden value in data that is the artifact of a core business process, or on a more personal note volunteering as a elementary school tutor and helping kids see possibilities in themselves that were always there, but just not able to shine through as brightly as they could.
So, this is not actually the end but the beginning of hopefully an interesting experience sharing ideas, insights, and thoughts on the subject of “revealing potential”.
