Lessons in Management Innovation from Main Street
Filed under: Innovation, Leadership, Organizational Transformation, Strategy
In their July, 2011 Harvard Business Review Article, Adaptability: The New Competitive Advantage (great article, worth the $ IMO), Martin Reeves and Mike Deimler make a solid case for our need to cultivate critical soft organizational skills to survive and prosper in today’s turbulent business environment.
Reeves and Deimler suggest that leaders and firms shift their focus away from the traditional approach to strategy (creating an enduring and relatively static competitive advantage through price, positioning or differentiation), and instead focus on cultivating four critical capabilities:
- The ability to read and act on signals of change,
- The ability to experiment rapidly and frequently-not only with products and services but also with business models, processes and strategies.
- The ability to manage complex and interconnected systems of multiple stakeholders.
- The ability to motivate employees and partners.
On a grand scale, these four read like the playbooks in use at Apple, Google, Amazon and other Masters of the Universe who seemingly morph their businesses and business models at a torrid pace, capturing more of our attention and more of our consumption along the way.
On a more local and relevant for the rest of us scale, these organizational capabilities are nothing more or less than the outcomes of effective leadership coupled with an entrepreneurial spirit.
Most start-ups rely on their skills in all four of those areas, almost by instinct. Their business agility is keen due to resource limitations and because they are driven to experiment with their ideas and approaches until something sticks and they move beyond survival towards success.
Local Lessons In Winning Approaches to Business Strategy:
During the past few years, I’ve marveled at the start-ups and small to mid-sized businesses in my community who didn’t need an army of consultants or MBAs to teach them the very relevant and important lessons that Reeves and Deimler share in their article.
They live in a world where agility is survival. They understand, experiment, learn and iterate. They know to seize upon what works and build it out while the building is good. And they get that they need to continuously be looking for new approaches to innovate based on failures and successes and the inevitable copycats and disruptions.
- There’s the wildly successful local Coffee Roaster, where the founders tackled the daunting task of starting a coffee business in the era of Starbucks, and have succeeded. They continue to morph their business model and strategy…and they experiment like fiends with new approaches to serving their clientele and shifting their business through licensing and distribution.
- And then there’s the Hair Salon that was the dream of a group of young professional women that has become the go-to place in the county. From start-up to juggernaut. Now, growth is the problem and appointments are hard to come by. I continue to get all 311 remaining hairs on my head cut at a ridiculous price premium here because the culture rocks, the senior partner is the smartest business person I know to not have a business degree, and I leave there every time feeling great and with three new ideas to write about based on their management, hiring, marketing and customer-service approaches.
- Someone I admire tremendously runs a growing manufacturing concern focused on an offering into the display side of the retail industry. They make products you wouldn’t think twice about, yet to tour the factory is to be amazed at the thought and investment in innovation. To meet and work with the people is to know that there’s something special in the leadership and the culture.
3 Critical Common Characteristics of these Main Street Successes:
1. Leadership that gets it. They are led by individuals who view the top and bottom lines as outcomes of doing the right things for and with their employees and customers.
2. Change is embraced. They intuitively get the guidance offered by Reeves and Deimler on building strength and they live it every day. Instead of fearing change, they find ways to leverage and promote it.
3. They are big thinkers looking to harness big ideas in small ways. They are born strategists who think beyond the here and now and take their cues not only from their customers but from observing and anticipating what some of these macro-changes in our world mean for their businesses.
The Bottom-Line for Now:
The lessons from the big firms in the news are visible and exciting. However, don’t discount the lessons in management innovation that are being taught on and around Main Street. The sharpest small business owners that I know have long understood the secrets that the rest of us in the corporate world are now discovering.
Strategy-Towards Hypotheses, Experiments, Involvement & Learning
Filed under: Leadership, Leading Change, Organizational Transformation, Project Management, Strategy
Few would argue that a nimble, quick-to-learn and quick-to-adapt organization is a bad thing. Given the rate of change in our world, those characteristics are increasingly table-stakes for survival and success.
Why then has the approach to strategy and the notion of “strategic planning” in so many organizations remained mired in a 1960’s kind of static, top-down event-focused model?
Many firms practice a style of strategic planning that might have worked in a different time and place, but today, fast-to-try, fast-to- fail and fast-to-learn are essential for survival and success.
Give Me an Epiphany, Darn-It!
Rarely does just the act of thinking through circumstances, opportunities and strategies yield the epiphany that allows a firm to carve out a competitive advantage.
In my experience, the management teams who have pursued the “strategy as event’ approach with the annual or semi-annual meeting(s) serving as the time to talk strategy and decide, are often frustrated with the time investment and disappointing outcomes. Few epiphanies…a lot of time…a lot of bickering and ambiguous outcomes with no clear next steps. Sounds like fun, doesn’t it?
Hypotheses and Informed Experiments, Please!
The best outcome of the front end of any strategy process is one or more (a limited number, please) of ideas…hypotheses, that can quickly be turned into and managed as experiments.
True value in the form of learning accrues to the organization from working through the strategic experiment, assessing outcomes and refining the ideas. Because these workplace and marketplace experiments require people to implement, manage, and assess them, the act of engaging the employee population creates understanding, involvement, excitement and importantly idea sharing.
It Feels So Good When We Stop!
I’ve worked with teams who were accustomed to and frustrated by the “event” orientation of planning. When refocused on assessment, analysis and importantly, hypothesis generation, the unreasonable expectation of finding the magical answer was replaced by high quality dialogue around generating ideas for better serving customers and beating competitors. After a series of these discussions over time, and with some focused facilitation, the teams were able to zero in on one or two strategic hypotheses to invest in and learn from.
The Project Management Art of Building out Strategic Experiments:
While I frequently reference this phase as the Execution phase, I prefer Experiment…both because it doesn’t sound so fatal…and it implies Doing, Measuring, Learning and Refining (DMLR). In my estimation, its in the DMLR cycle where the real work…and the real “Ah Ha” moments of strategy occur.
Six Ideas for Implementing an Effective Doing, Learning, Measuring, Refining Program:
1. Treat each strategic experiment like a project. Assign a Project Manager and use Best Practices PM to charter, scope, engage stakeholders, define the work, assess the risks, plan and estimate the work, implement the work, monitor and communicate. Yeah, that’s a mouthful. Your Project Manager in this case is priceless.
2. Ensure that there’s a strong sponsor in place for every experiment. Yes, best practices project management again. If this is important enough to be betting your strategic future on, it’s important enough to provide a Supportive Sponsor with heft and teeth.
3. Explain, Engage and Listen! People work in compliance under orders, they work with their hearts and minds when they are part of something big. Getting them involved is good. Arming them with context on why, and what and importance is critical. Listening to their feedback is priceless. Since many strategic initiatives involve doing new things or doing things differently, this holistic approach to engagement is essential.
4. Create Learning and Sharing Forums with Teeth. It’s good to pre and post-mortems…it’s better to create ample opportunities for idea sharing, lessons learned and adjustments to experiments on the move. Hey, I’m probably violating several tenets of The Scientific Method with the adjustment statement, but timeliness is critical and your Project Manager will help you manage changes in the plan.
By the way, by this time, you may want to give your PM a big fat raise!
5. The Truth is Always in the Field…Sometimes You Just Have to Look Carefully. The best strategic experiments involve customers and partners. Invite them in…make them part of the process and of course observe and listen carefully. And then act.
6. Do Something with the Outcomes-Plan to Change or Move Forward. After a period of time and armed with the insights and feedback of employees, customers and partners, there’s a vetting and decision-making process that those in charge have to prosecute. From kill to change to go to what’s next, you and your team are on the hook for returning to the process and assessing and deciding.
The Bottom-Line for Now:
There are at least two “dirty little secrets” in what I’ve described above. It’s a nefarious plan for involving the broader organization in strategy and execution, and it not so secretly “operationalizes” the work of strategy. While there’s no magic and I would be misleading if I didn’t highlight that the process is filled with bumps, hiccups and debates it’s darned powerful if and when managed properly.
Leadership Caffeine-Do You Have the Courage to Kill Your Business To Save It?
Filed under: Crisis Leadership, Leadership Caffeine, Organizational Transformation
Note from Art: no businesses were hurt in the writing of this post. Also, thanks to my good colleagues for agreeing to let me share a few of their thoughts and ideas in this post.
Fresh off of my recent podcast interview with Geoffrey Moore on his new book, “Escape Velocity-Free Your Company’s Future from the Pull of the Past,” I had the opportunity to sit down and chat with my informal Board of Advisors (2 CEOs, 1 GM and 2 Consultants and all experienced leaders) on this very topic…building a new business while running the old one. With my thanks for their input and ideas, here are the highlights.
Discussion Highlights:
-Slow to React: It was generally agreed that most businesses and most leaders struggle and fail at this endeavor of business reinvention. They often accept the need for radical business change too late and they move too slowly, passively and incrementally on the changes once the need is visible to all.
-The View Gets in the Way: the CEO contingent offered an explanation…but not a defense for their fellow club members, indicating the view from their chairs of the needs and wants of customers and stakeholders (board, employees, investors), often suggests more incremental than revolutionary action. One CEO described her firm facing a disruptive situation and the board and investors pushing back, with a rationale of, “We invested in this business, not this mythical one you are talking about. Make it work.”
“While the logic felt wrong, it was hard to overcome that mentality,” she added.
-Strong Leadership Required: All agreed that it takes strong conviction and true leadership to make what Moore describes in Escape Velocity as asymmetrical bets…investments on offerings and approaches radically different from the current ones. “Most of us are wired to solve problems within the framework of our traditional thinking. This world demands that we as leaders look at our business through different lenses and filters and sometimes that requires fighting through the dominant logic that our teams have used to succeed in the past.”
-Politicians Everywhere: the group offered that the need for radical change often begets a hyper-political environment, where land grabs and jockeying for position and resources often shift the focus off of the emerging business dilemma. Again, it was agreed that extraordinarily strong leadership was required to navigate this volatile political situation and survive.
-Don’t Forget the People Who Do the Work: To a person, the group indicated that even if the need is visible and the top-level commitment made, the failure of senior leaders to build a coalition of mid-level leaders is often fatal to the attempt to change.
What’s a Leader to Do?
1. Grow Your Paranoia: Andy Grove may have been right with his, ”Only the paranoid survive” mantra. The group encouraged the development of a healthy paranoia around the potential for the business to be disrupted. They suggested involving as many people as possible in environmental scanning and creating mechanisms for feedback and sharing.
2. Diversity Counts: Another participant suggested that diversity might be important. “Strive to build diverse teams…culture, background, experience and importantly, viewpoints. Your diversity might just save you when it comes to looking for solutions.”
3. Learn from Steve Jobs and Jack Welch: Invoke a bit of Steve Jobs and quit asking and start creating solutions for problems that people don’t know they have. The take-away: if your primary business planning tool is asking your customers what they need, you’re heading for an innovator’s dilemma event. Engaging with customers is great, but beware falling victim to their natural myopia.
Another group member suggested that Jack’ Welch’s s approach to the rise of the internet via his “Destroy Your Business.com” program is an appropriate model for engaging the broader organizational population in a significant change program.
4. Communicate, Communicate, Communicate: Follow Kotter’s advice on leading change and remember that “you cannot over-communicate” during these periods. In particular, create processes and events that keep stakeholders apprised of changing circumstances. If you’ve waited until the crisis lands to build some awareness with your stakeholders, don’t be surprised when they grow a bit testy and recalcitrant.
5. Recognize that Politics is a Full Contact Sport. Don’t underestimate rationalize away your need to play on the field of politics. Too many decisions take place in this environment, especially in larger organizations, for you to be unplugged.
6. Grow a Spine. If the situation calls for radical change and you’re in charge, it’s up to you to leave it all on the battlefield in pursuit of creating understanding and garnering stakeholder support for radical change.
The Bottom-Line for Now:
There’s nothing courageous about leading a business during good times where a rising tide effectively lifts everyone in the market. True leadership is forged in the fires of leading and managing and living through crises, including disruptive events. Perhaps the event doesn’t have to be your firm’s death knell, but rather a call to action in a new game of survival and success.
Towards Your Growth as a Management Innovator
Filed under: Leadership, Management Education, Management Innovation, Organizational Transformation
One of the exciting parts of living and working through “these interesting times,” comes from the opportunity to apply the tools of management in new ways and forms to today’s complex problems.
This “management innovation” as Dr. Gary Hamel describes it, is much about the search for approaches to organizing, planning, leading and controlling that better fit the challenges of the 21st century. The implication is that in many cases, we’re still trying to solve new and emerging problems with 20th century management tools. Another implication is that we haven’t yet cracked the code on sustaining high-levels of organizational performance for extended periods of time.
In Search of Management Innovation:
While some position this pursuit of management innovation as something on the scale of an Arthurian quest for the Holy Grail, for those of us who aren’t management researchers and who have teams and organizations to run, we need something a bit more tangible to grab hold of and play with in pursuit of survival and sustained success.
Consider these as idea prompters laced with encouragement!
Six Quick Ideas to Stimulate Your Management Innovation Thinking:
1. Innovation in management approaches occurs like almost all other forms of innovation…through enlightened trial and error backed by a lot of curiosity and a willingness to accept failure on the road to success. Translation…it’s all about environment and leadership attitude. If you aren’t working hard on creating an environment that not only tolerates trial and error, but encourages it, then you are missing the critical first piece.
2. It’s how you use the tools that counts! Our tools…structure, people, leadership approaches, technology, communications, goal-setting and measurement mechanisms are fairly easy to identify…and genuinely finite…however, there are nearly infinite number of ways to apply the tools.
3. The Right Answer…Well, It Depends. What works right in one situation or environment is likely not the right answer for other situations or environments. Recognize that when entering a new business, setting up new teams or taking on new types of projects and problems, you need to view the situation as unique, not cookie cutter.
4. Structure matters…and strategy must beget structure. If you forget or misapply either one of these, you’re likely to generate more problems than answers.
5. Creativity is a commodity however, the application of creativity to solving problems is priceless. And before you skewer me for the “commodity” crack, consider that ideas are all around us…it’s the courage to take an idea and work it until it either proves useful or useless that takes true courage. Translation: the value isn’t in the brainstorming session, although the process of generating, parsing, prioritizing and acting-on ideas is critical.
6. It’s always the people, stupid! Do everything to get the right ones in place and give them the tools they need to fail on the road to success.
The Bottom-Line for Now:
At the wrap-up of a Kellogg Executive program a few years ago, the Organizational Design Professor encouraged all of the V and C level people in the room to “Never quit trying to innovate with our people and our organizations.” Her meaning was clear then and it’s more critical now than ever. How hard are you working to promote, support and reward management innovation in your workplace?
Send in the Clones. The Abuse of “Must Have” in Recruiting and Hiring
Filed under: Innovation, Leadership, Management Education, Middle Management, Organizational Transformation, Performance, Talent Management
Aside from a few obvious technical and vocational roles, there are very few positions in most organizations that absolutely “Must Have” someone who has held the identical role in the same industry with the same job.
Nonetheless, the use of “Must Have” remains a staple in recruiting and hiring. It’s too bad, because over-reliance on “Must Have” can lead to a chronic case of mediocrity or worse, a terminal case of recycled bad ideas from industry participants.
Who Fits this Description?
Recently, a friend sent me a series of executive position descriptions he was considering responding to. His excellent qualifications exceeded the scale and scope of the roles, but didn’t quite match the exact requirements. The “Must Have” lists were long and loud, and just as they caused my colleague to pause, they are certain to frighten away most talented people who have not lived a life that precisely matched this nearly impossible-to-replicate list of required experiences.
While I get the need for some “Must Haves”…I don’t want a mechanic setting my son’s broken arm, and no one wants a real estate broker advising them on estate planning, there’s a point when the list turns from essential to ridiculous.
Now as a bit of truth in advertising, I’ve made a career out of scouting and engaging talent from everywhere but my competitors. I never had an urge to reinvent their same lousy practices or to recycle the people who have been busy changing badges but going to the same trade shows for years.
The excessive reliance on “Must Have” is particularly disturbing in an era when:
a. There’s so much remarkable talent available for hire.
And
b. Now more than ever, firms need to infuse established businesses with different ways of thinking and acting.
Measure Twice, Cut Once on Your “Must Haves”
The “Must Have” issues I am focusing on are for managerial or leadership positions where the keys to success are much more about critical thinking, leadership effectiveness, talent development and operating effectiveness, than they are about specialized industry experience.
“Do not apply unless you have X years working in Y industry.”
Great people with highly transferable and mature skill-sets are kept out of the game by an irrational belief that there’s something particularly special/unique/special about your industry and business.
Newsflash: your firm and your industry have the same general issues and challenges as every other firm and industry.
That’s crazy! We’re different. We’re unique.
No you’re not. You have the same challenges in your firm for creating winning strategies, engaging and keeping the right talent, operating effectively and responding to or acting upon global and industry forces. The variables change from sector to sector and firm to firm, but when you peel back the layers, the issues are the same.
It takes too long to bring people up to speed. We don’t have time .
When it comes to getting the best talent on your team, you always have time to help them learn an industry or marketplace. It’s much easier to teach someone an industry and market than it is to teach them how to think strategically, lead effectively and operate efficiently.
Having shifted industries four times in my life, I can tell you from experience that there is a learning curve, and once you power through that curve, the issues are eminently comprehensible. It doesn’t take a long career or a rocket scientist to understand industry forces, to plug in to customers, and to understand your firm’s “unique” position and value proposition.
A Few Dividends from Relaxing the Must-Haves in Your Hiring Decisions:
- You gain a broader pool of talent to draw from. Yes, this means more work for you. Take solace in the fact that it is the right work.
- The outsider offers a a fresh set of eyes with a broader base of knowledge on how problems have been solved and how customers in other worlds have been served. The observations and ideas can infuse a team and business with new life. (And yes, it will annoy those who are practitioners of the “That’s not how we do it here” religion.)
- You have an excuse to challenge conventional thinking. People with diverse experience aren’t burdened by the baggage of looking through the same narrow industry lenses for many years, and their presence provides an opportunity for you to tee up some “sacred cow” discussions in front of the barbecue.
- Professionals with a fresh view regularly ask annoyingly good questions, including: “Why do we do it this way?” Or my favorite, “What if… ?” followed by “Why not?”
- The effort you expend to help people learn and understand your business and market affords an opportunity for you to rethink issues and approaches. It’s always good to refresh your view and challenge your assumptions.
The Bottom-Line for Now:
The best ideas might be found far afield from where you’ve been working and watching. Whether they come from a different industry entirely or from a different part of the value chain, your best talent may be a non-traditional candidate who fails the “Must Have” test.
Relax the “Must Have” filters in the right places and take a broader look before you make your next hire. You might just be bringing in the individual who can help you rethink your business.
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