Art of Managing—Beware the Lure of Strategy in a Box Approaches

image of a box with new and improved on the labelThe Art of Managing series is dedicated to exploring the critical issues we face in guiding our firms and teams to success in today’s volatile world.

Strategy is one of those difficult topics that dog most management teams and most firms.

The real work of strategy is challenging, time consuming and filled with hard-to-answer questions. It requires a simultaneous out-of-corporate body experience to objectively understand market, industry and competitive forces, along with an invasive and sometimes painful self-examination around internal capabilities.

Few managers come to strategy work with a common understanding or agreement on what strategy is, much less what an effective process looks and feels like. Selecting a strategy and building out the execution program includes the painful process of choosing what not to do, something that often dies on the field of political battles or lack of decision-making discipline.

Last and not least, the groups working on strategy often have little experience working together much less deciding together. In larger organizations participants are often handicapped by lack familiarity with their colleague’s businesses or offerings. Mix in  political dynamics with the lack of familiarity and experience teaming, and you shoot any realistic near-term opportunity to cultivate high performance right in the corporate rear-end.

Given the challenges of managing an effective, on-going strategy process, it’s no surprise “Strategy in a Box” approaches are often adopted by management teams looking to add a check mark to the strategy task on their annual goals.

Recognizing “Strategy in a Box” Approaches:

While there are several variations, the process typically involves bringing a group of senior managers and functional or technical experts together with an outside facilitator for a multi-day offsite retreat.

The “process in a box” invariably starts at the top of the intellectual heap…setting vision to guide future direction. A painful (think root canal with no Novocain …but even more painful) round of group wordsmithing on a so-called vision invariably results in a gobbledygook of words that no one likes but everyone momentarily settles for just to end the pain.

After vision, there’s typically a S.W.O.T. (strengths, weaknesses, opportunities, threats) exercise…a discussion that is best described as a bias-filled cesspool of incremental and wild ass thinking on external opportunities and a superficial analysis of internal issues and capabilities. The internal assessment is often either a glossing over of capabilities or a political battle with functional or technical experts taking shots in an effort to distance themselves from criticism and gain leverage in the expected future resource battles. There’s often little preparation or external analysis, and objectivity for internal realities is horribly lacking.

Graphic with the words of Art of Managing and other management termsNext out of the box is a round of goal setting, where the goals become the strategies. The goals are invariably around numbers and the bigger the numbers, the better. It’s not uncommon to hear the adult version of the playground “triple dog dare,” pushing numbers higher and higher:

“C’mon, if development hits the timing window at the right cost and feature set, we can do twice that with our hands tied behind our back.”

“I think you’re sandbagging. We can do your number and then some with the right execution and management.” (Note the thinly veiled jab.)

Big numeric goals become the perceived strategy: “100 million in three years,” or, 100,000 customers or number one or two in our market.

The last tool out of the box is the action plan, where some high-level actions and responsibilities are assigned, with the middle-layer of management in the room inevitably taking on the most critical work.

After a final shake of the box, the follow-up date is set and people adjourn with smiles and handshakes, all internally secure in the knowledge that little of any value was achieved and all wondering how the heck they can avoid any accountability here.

The Alternative…Deliberate Focus on the Right Issues and the Hard Questions:

I wish I were exaggerating on the above description, but I’m not. Some form or variation of this superficial approach is what too many management teams experience when it comes to strategy work. 

The right alternative is to focus on and attack core issues. Rumelt advises us in Good Strategy/Bad Strategy to focus on the kernel of a strategy. Carefully diagnose the situation (an exercise not to be taken lightly) and then decide what to do about it at a high level. Back the diagnosis and guiding philosophy with a set of integrated actions and build from there. Much like a medical problem, the diagnosis frames and defines the follow-on regimen and measurement.

Geoffrey Moore’s framework of frameworks in Escape Velocity forces a view to the portfolio of opportunities and demands answers to the hard questions for today’s and tomorrow’s businesses from an investor’s perspective. He also appropriately segregates discussion into time horizons and cautions us to treat today’s businesses and tomorrow’s businesses very differently.

Others, including Welch’s famous 5 slides (approximately 20 questions) create a laser-like focus on the issues of strategy and opportunities and competitors and actions.

In my own experience leading strategy inside corporations and externally as a consultant, the hardest part of the process is building the discipline and teamwork to objectively tackle the right issues and hard questions. While the components included in the “Strategy in a Box” have merit…vision, assessment, goals and actions, it’s the poor process and then attempting to pass them off as the complete strategy work that I object to strenuously.

The Bottom-Line for Now:

In truth, the work of strategy is hard work, however, the actual key questions to be answered are finite and very visible. The focus must be on finding or creating strength to use against weakness or to exploit opportunities. The work is much about assessing your firm’s true situation in the context of change (tastes, industries, macro forces, competitors, substitutes, technologies) and selecting a set of intelligent experiments to test hypotheses. The work demands the development of a team committed to high performance, supported by the organization and accountable for objective assessment and selection of options.

Don’t be lulled into sacrificing the rigor of the work and the accountability to key questions to a simple sounding but canned approach that doesn’t get at the right issues at the right depth. There are no shortcuts to strategy.

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Leadership Caffeine—In Praise of Mistakes Made for the Right Reasons

image of a foam coffee cup with brown outer sleeveThe Leadership Caffeine series is over 200 installments strong and is dedicated to every aspiring or experienced leader and manager seeking ideas, insights or just a jolt of energy to keep pushing forward. Thanks for being along for the journey!

The true test of your leadership character isn’t measured by the absence of mistakes, but rather by the mistakes made in pursuit of growth and learning AND how you conduct yourself once you’ve made a mistake.

Show me a mistake-free leader, and I’ll show you someone hiding from the real issues confronting the business: people and strategy.

People:

People are complicated. In spite of the myriad of assessment tools at our disposal, selection is still a judgement call with all of the inherent risks and biases of human decision-making. And the challenge of aligning skills and experiences with tasks while searching for that spark that stimulates people to work at their creative best is truly much more art than science.

You will make mistakes on people. Make them for the right reasons. Taking a chance on good people for the right reasons is worth the risk every day.

Remember, character always gets a positive vote. After a certain age, character is formed and nothing you can do will alter someone’s core character. You cannot change someone. Assess character carefully. Look for behavioral examples around values, and if the view is dissonant, it’s a non-starter.

Passion and desire are powerful reasons to take a chance on someone, even if others around you suggest this person isn’t right for a role. I like betting on the underdog if I’ve done my homework on the individual. Taking chances on people who show that extra spark is part of the essence of leadership. Much like character, you cannot teach passion, you can only help it emerge.

The greatest rewards I’ve enjoyed as a leader come from those people I selected against popular wisdom because I saw something. Of course, “something” is hard to codify and I’ve been wrong here as well. It doesn’t mean I will stop taking chances.

Strategy:

Much like the challenge of selecting and inspiring people to apply their talents, strategy is filled with ambiguity and uncertainty. Choosing what to do and importantly, what not to do is a core management task, yet human judgement in all its brilliance and all of its flaws is once again at the center of strategic decision-making.

Even in our data-driven world, selecting and then executing a strategy is like walking through a minefield on a fresh lava-flow blindfolded. There’s a high probability that somewhere between choice of path and the journey down that path, you will misstep with painful results. Assuming the essence of the strategy is sound, often, you can recover, adapt and proceed from execution missteps. These non-fatal errors are powerful learning experiences, teaching you and everyone around you how to spot gaps, fill in blind-spots and redouble efforts to get execution right.

While many view strategy as an event, with an outcome that is carved in granite and the granite set in concrete, in reality, it is effectively a testable hypothesis backed by a series of experiments. In a military metaphor, you engage in a series of skirmishes designed to test defenses and learn terrain, and then you push to conquer the ground. These skirmishes are the teaching experiences and your mistakes here are part of the process of figuring out how to get it right. The only mistake is not to decide to take action.

The best leaders I’ve worked around understand the need for the missteps. No one actively seeks them out, but they are an inevitable part of the pursuit of success.

The Bottom-Line for Now:

The least interesting professionals to me are those who cannot articulate a litany of mistakes on their way to their successes. The absence of mistakes…or, the unwillingness to admit prior mistakes is a character flaw and as mentioned above, there are no compromises when it comes to character. There’s no guarantee that some of your own mistakes won’t have painful consequences. Nonetheless, the mistakes made for the right reasons…in favor of great people and in pursuit of business success, are simply tickets to admission. Pay the price, take your lumps, learn and keep moving.

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Art of Managing—Shiny Objects and the Senior Management Team

Graphic with the words of Art of Managing and other management termsOne of the value killers found inside many organizations is the out of control pursuit of too many new initiatives. The resultant too few resources chasing too many projects, is a sure-fire way to create organizational stress as initiatives fall short, inefficiencies skyrocket and employees, stakeholders and customers grow perturbed.

In one client firm, the sure-fire path to success was to attach oneself to as many high visibility initiatives as possible, in the hope of being associated with the success of one of them. It was a political portfolio game, with most projects flailing and failing. Nonetheless, the politically charged environment and the visible path to success catalyzed a seemingly endless number of new initiatives designed to optimize the visibility and executive attachment of the idea generator without really focusing on solving critical problems.

The root cause of this undisciplined pursuit of new initiatives rests squarely on the collective shoulders of the management team. Both success and struggle are equal opportunity contributors to this situation.

Success generates the ego that tells management, “we can do no wrong,” and struggle or strategy disappointment (either the idea or the execution) generates political flailing that rationalizes the search for a quick fix.

Another team rationalized maneuvers several degrees off of a still-evolving core strategy in the name of revenue coverage. “Until we figure out the strategy, we’ve got to show growth,” was their mantra. Their lack of discipline led to to a collection of disparate initiatives that struggled for room to breathe in an environment where every idea was good and no ideas attached to revenue were turned away. They failed.

Effective management teams learn to recognize the signs of a breakdown in discipline and they redouble their efforts to promote clarity and minimize the tendency to fill ambiguity with unqualified activities.

These groups recognize the dangers of hubris born of success (Jim Collins) or the tendency to flail in search of quick answers when things go wrong. They understand that they are accountable for setting direction and ensuring that each and every choice to apply company resources must create the right kind of value. And they accept that determining just what the right kind of value truly is, is an exercise that can only be resolved through debate and deliberation.

One particularly effective management team holds themselves accountable to evaluating ideas against the filter of,  “Does it create the right kind of value?” They live by the mantra that not every dollar of revenue is created equal, and they’ve learned to separate interesting ideas from ideas that move them closer towards a desired future state (new markets or new customers). They’ve also learned to effectively and passionately make a case for new ideas and then make a decision and move forward. They credit their success to the senior executive who has worked tirelessly to depoliticize their environment and focus them on moving towards the future.

 The Bottom-Line for Now:

Whether you sit on the senior management team or you sit in the middle of the organization where the real work takes place, strive to cultivate intelligent filters for new initiatives. Anchor to key corporate goals and strategies, and always ensure that your initiatives connect to a real customer…not a customer of myth or imagination.

Ideas are wonderful and you don’t want to stifle their generation, however, not every idea deserves to turn into an initiative. Choose carefully. You need just enough to push the team or organization forward and not too many to promote distress. If the people around you are running around trying to keep the spinning plates from wobbling off of their sticks and crashing to the ground, it’s time to reassess.

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Leadership Caffeine—Breakaway Leadership Part 2

image of a foam coffee cup with brown outer sleeveThe Leadership Caffeine series is over 200 installments strong and is dedicated to every aspiring or experienced leader and manager seeking ideas, insights or just a jolt of energy to keep pushing forward. Thanks for being along for the journey!

In the first post in this blended, Leadership Caffeine/Art of Managing series, I focused on leadership and management behaviors that stifle or derail efforts to escape the gravitational pull of the past as organizations work to achieve what Geoffrey Moore calls, Escape Velocity.

In the words of that business pundit, Pogo, “We have met the enemy and he is us,” when it comes to building new on top of old (For those too young to have met Pogo, he was a popular newspaper cartoon character from another era.)

In this post, we look at behaviors and approaches that YOU and your management counterparts directly control that contribute to success with this challenging endeavor of building something new while managing the existing legacy business.

8 Ideas to Help Improve Your Odds of Success in Building the Future:

1. Create organizational awareness and understanding of the new endeavor. Every day. Seriously. I’m invoking Kotter’s dictate that, “in times of change, you cannot over-communicate.” Every time a firm’s senior leaders stop working at this, the cultural storm clouds emerge. Take care of it. Daily.

2. Position the new and legacy efforts as two equally critical but very different endeavors. It’s true. The existing business pays the bills and funds the future, while the new endeavor strives to ensure a future. One is no more critical than the other. They are both critical. Share the over-arching strategy (or opportunity) far and wide; create an understanding of how the firm will execute on the opportunity and share results, good and bad. Help the entire organization become invested in the success of the new endeavor!

3. Share the cool new toys! New endeavors often introduce new processes or approaches to innovation, development and market testing. Find opportunities to cross-train and cross-pollinate new approaches with legacy teams where appropriate. I’ve seen this most often in the move away from waterfall development to an agile approach. Frequently, all teams can benefit from understanding and learning to apply the new techniques.

Graphic with the words of Art of Managing and other management terms4. Recognize and manage the inertia of your legacy business in creating new opportunities to invest. Your product managers will naturally identify opportunities to improve existing products and introduce new offerings into legacy markets. Marketing associates will find ways to spend their budgets in pursuit of the business, and rarely do the volume of development asks or marketing opportunities shrink of their own accord.

Senior leaders must manage the incremental requests with a clear filter and a firm hand. See also points 1 & 2 and recognize that creating context for “No” on new requests is critical to avoiding a cultural rift over the team with the shiny new toys and the other team with yesterday’s retreads.

5. You get what you measure…use the right progress measures. Moore does a good job of reminding us in Escape Velocity that you cannot measure new ventures with the same metrics you apply to existing businesses. New ventures are about engaging innovators and early adopters, gaining feedback and step by step, increasing activities, pipelines and then dollars and profits. We expect our existing businesses to quickly translate activities into revenues and profits, but the new ventures have to grow into those measures.

In larger entities, particularly holding companies and conglomerates, there’s often little consideration for the meaning of the numbers in cells on a spreadsheet…it’s up to you and your peers to establish this understanding and ensure proper context for costs without revenue that occur in most new endeavors.

6. Be prepared for the “Stuff Happens” phase. I don’t care how well you define the project and anticipate risks, something always happens that the team did not anticipate. The unknown-unknowns bite hard, and it takes leadership to stand firm in the face of the onslaught of finger-pointing and second guessing, and prevail. A senior leadership divided against itself will not stand. (OK, sorry President Lincoln.) The firm’s senior leaders and the new venture’s executive sponsor must fight the knee-jerk reactions and guilty before proven innocent tendencies of others vying for resources.

7. We think, therefore we are prone to errors and traps. Be merciless about avoiding group-think, dodging escalation of commitment and side-stepping other group and individual cognitive decision-making traps. Use outside perspectives to challenge your strategy and your assumptions. Promote outside-in discussions with target audience feedback and competitor analysis. Ask others to frame your perceived opportunity in a different way and challenge them to identify alternative approaches. And importantly, cultivate the leadership team dynamics needed to ask hard questions about insights, direction and strategies.

8. Avoid starving the new endeavor. One of my favorite managers often intones, “We’ve been doing so much for so long with so little that we can now do absolutely anything with nothing.”  He always gets a laugh, but it’s no laughing matter when promising ideas die on the vine due to lack of care and feeding. If you’re making a courageous leap to push into a new arena, back it with the people, equipment, tools and organizational support needed to improve the odds of success.

The Bottom-Line for Now:

This is a big topic contained in a couple of small posts. Many organizations never move beyond the business that made them successful. They are yesterday’s name brands and tomorrow’s answers to trivia questions. The effort required to add something new in an environment of existing (or old) is not to be trifled at. Use the ideas here and in post #1 as prompters and engage in the hard discussions and invoke the courageous leadership it takes to move beyond the gravitational pull of your firm’s past.

Don’t miss the next Leadership Caffeine-Newsletter! Register herebook cover: shows title Leadership Caffeine-Ideas to Energize Your Professional Development by Art Petty. Includes image of a coffee cup.

For more ideas on professional development-one sound bite at a time, check out Art’s latest book: Leadership Caffeine-Ideas to Energize Your Professional Development

New to leading or responsible for first time leaders on your team? Subscribe to Art’s New Leader’s e-News.

An ideal book for anyone starting out in leadership: Practical Lessons in Leadership by Art Petty and Rich Petro.

Leadership Caffeine—Exploring Breakaway Leadership, Part 1

image of a foam coffee cup with brown outer sleeveThe Leadership Caffeine series is over 200 installments strong and is dedicated to every aspiring or experienced leader seeking ideas, insights or just a jolt of energy to keep pushing forward. Thanks for being along for the journey!

In a recent “Art of Managing” post, I focused on the challenges that almost all organizations face when trying to move beyond the successes of a fading past towards new markets and new ways of doing business. In the excellent book that prompted the article, Escape Velocity, by Geoffrey Moore, the author raises the idea of Breakaway Leadership, but leaves us groping in the dark a bit, wondering  just what this leadership looks like in the wild.

If you’ve lived through a successful migration of a business from a legacy market to a new world, you know that it’s a sometimes messy, often emotionally turbo-charged experience laced with a fair amount of doubt and fear. It’s also a time rich in experimentation and learning filled with a whole lot of “new” in the form of new people, new customers, new offerings, new products, new partners and so on.

I’ve personally been a part of exactly two of these that worked in a big way, and I’ve counseled clients who have ultimately pulled it off. I’ve also been around colleagues and clients who failed to execute. Earlier in my career, I was along for the ride when the train ran off the rails on a collapsing bridge over a big waterfall that emptied into a lake filled with alligators and sharks. At least that’s what it felt like.

While sensitive to stepping all over the fundamental attribution error when looking in the rear-view mirror, I can tell youGraphic with the words of Art of Managing and other management terms there were and are leadership behavior differences that made a difference in the outcomes in my opinion. For this post, let’s explore some of the behaviors that supported a failure to Breakaway.

8  Leadership and Management Tripping Points that Destroyed Attempts at Breaking Away:

1. Cloistered Cockpit Control. The senior management team assumed the responsibility for the change efforts (good), but failed to adequately involve anyone not seated on Mahogany Row (bad). They worked unceasingly to think through the change, but fundamentally lost track of what the people doing the work needed in the form of context, support and motivation.

2. Left the Legacy Behind. The painful reality is that what got you here won’t take you forward, but when you alienate the good people working hard to optimize outcomes outside of the spotlight, the culture shift crashes. The fact that the legacy business is paying the way for the investment in the future makes it all the more critical to both lead and manage this part of the organization with care and concern.

3. Only the Cool Kids Got to Play. Yes, it takes new people with new schools to facilitate a successful market shift, but it’s a huge mistake to not bring legacy talent along through opportunities, education and immersion.

4. A Shortage of Courage and It Wilted Under Pressure. As Moore points out, the worst of all economic outcomes is an attempt at building the future that wilts due to pressure part-way through the process. Leading major change is not for the faint of heart or the short-on-courage type individuals.

5. Taking a Lazy Approach to Strategy. When senior managers fail to hold themselves accountable to properly defining their new opportunity in the context of audience, problem/solution, competitor set, ecosystem and all those other vexing strategy issues, the lack of clarity creates a brutal case of mission drift.

6. The Royals Arrived and the Dictators Emerged. I’ve observed leaders take on an almost royal or in some cases dictatorial persona, with all of the attendant hubris, arrogance and carnage. Followers who remain take the leader’s every utterance as something between a royal decree and the law of the land, and every discussion in every meeting focuses on what people perceive the leader wants. I observed this in a Good to Great firm (Collins) that is no longer great and arguably not good. It was fascinating and horrifying to watch as good people deserted, messengers of market truths were regularly executed and the remaining shell of the organization was held hostage by one person.

7. Flailing and then Failing. Much like Jim Collins describes in his book, How the Mighty Fall, at least one of the steps on the road to ruin is an undisciplined pursuit of more. In the failed transformations I’ve observed, this malady is present in all circumstances. Frustrated over the lack of quick results, senior managers lash out in pursuit of new initiatives. Projects are started and abruptly stopped and new projects are heaped upon the existing overload of work. Eventually the organization grinds to a halt.

8. Trust Took a Holiday at the Top of the Organization Chart.  A creeping lack of trust between a firm’s senior leaders is nearly almost fatal, and nothing kills trust faster than a team that has not linked arms around a direction and a set of choices. There’s no more heated time in a senior leadership group’s lifecycle than a major change initiative and the trend is towards entropy instead of order.  Always fatal as it unfolds like a Kabuki Play on a stage that all employees can see. My least favorite senior leadership team ended up refusing to ever meet as a group in large part due to their not so secret contempt for each other.

The Bottom-Line for Now:

While the focus in this post is on large organizational transformation, the same issues and same behaviors emerge in attempts at team, unit or functional transformations. There’s a group of leadership behaviors that suck the critical energy out of any attempt to breakaway no matter the size or scale. And while part of the answer is to “do the opposite” of the above, life, business and organizational change are never that simple. For now, beware the tendencies described above and plan on a return visit for Part 2, where I’ll explore the behaviors that support success in Breakaway situations.

Don’t miss the next Leadership Caffeine-Newsletter! Register herebook cover: shows title Leadership Caffeine-Ideas to Energize Your Professional Development by Art Petty. Includes image of a coffee cup.

For more ideas on professional development-one sound bite at a time, check out Art’s latest book: Leadership Caffeine-Ideas to Energize Your Professional Development

New to leading or responsible for first time leaders on your team? Subscribe to Art’s New Leader’s e-News.

An ideal book for anyone starting out in leadership: Practical Lessons in Leadership by Art Petty and Rich Petro.