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.

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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.

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Strategy and Category—In Pursuit of Growth

Graphic with the words of Art of Managing and other management termsThe 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.

I reference Geoffrey Moore’s 2011 book, Escape Velocity regularly in my management writing because it is in my opinion the most relevant and useful book on strategy in the past few years. (I hold Rumelt’s Good Strategy, Bad Strategy in high regard as well.)

Moore takes on THE major strategy issue faced by almost every successful organization with a bit of history behind it…dealing with the need to escape the gravitational pull of the past in search of new sources of growth.

It turns out, most of us aren’t much good at pulling this off…thus the tremendous volume of once good and now gone organizations. (One only has to look at the news to see the fortunes of category creators…the struggle of emerging firms and the painful struggle of once successful organizations to survive. For the latter, think Radio Shack, which did a remarkable job lampooning its irrelevance in a Super Bowl commercial last week.)

Chances are your organization has plans to “change” and as part of your strategy, you have the challenge to identify and capitalize on new sources of growth.  Those concepts make for pretty slides and create head-nodding executive and boardroom presentations. Actually doing the work is as I’m sure you know, far from simple.

Enter Moore.  He offers some priceless assistance in turning those inside-out strategy discussions and budget-driven investment plans into outside-in, investor and future focused discussions and actions.

Along the way, he proposes a Hierarchy of Powers (HOP), a framework of frameworks that articulates where firms can build or leverage “power.” The framework is quite simple and quite sophisticated all at the same time. The hierarchy is: category power, company power, market (customer segment) power, offer power and execution power. Category power is the focal point initially, and the subject of Chapter 2, which is frankly an MBA course in strategy all alone.

A Few Key Takeaways on Category Power:

1. Category power is the number one predictor of financial performance. Participating in growth categories harnesses secular growth that once gone is not easily replaced. The rest of us are left with cyclical growth (mature markets) or low or no growth created through consolidation and cost cutting (declining markets).

2. Helping our firms move successfully into growth categories is one of our core tasks as managers and executives, yet much of how we manage, plan, budget and commit gets in the way of moving from mature categories into newer and foreign growth categories. This gravitational pull is the enemy of finding new growth.

3. In support of the prior point, how we shepherd (measure, manage, structure, account for) growth categories is different than how we manage mature or declining businesses. It takes extraordinary effort and a different set of rules to enter and succeed in a growth category

4. Categories should be viewed and managed like a portfolio and most of our portfolios are out of balance, with too much emphasis in slow-growth, mature or worse yet, declining markets and no credible source of emerging or growth businesses. We’ve got to balance the portfolio or suffer the consequences.

5. Leveraging Category Power is the number one way to achieve Escape Velocity from the shackles of our past.

The Bottom-Line for Now:

The words around change and new and growth are always easy, but once we blend people, culture, and operating practices into the mix, everything about change becomes very, very difficult. This simple concept of shifting into newer and higher growth categories as legacy businesses sustain or decline is in fact profoundly difficult for most every firm and management team, yet this is a key task. The dominant logic that delivered success in the past no longer hunts in this foreign land. We need new ways, new people with new skills and agreement on the right measures for the right situation.

This task of helping your firm find and move into new categories defines the essence of your role as a senior manager. The task will draw upon all of your skills to promote vision, motivate change and foment learning. It’s hard, good and essential work. And there are no books with the answers, but Moore certainly helps us with the questions.

Big topic, small post. I’ll be back with more.

Additional Resources:

Geoffrey Moore speaking on Escape Velocity at Stanford (55 minutes well invested!)

My Leadership Caffeine podcast interview with Geoffrey.

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.

The Rocket Scientist and the Rock Star Effect

Graphic with the words of Art of Managing and other management termsNote from Art: several metaphors were mixed and then massacred to create this post!

One of the “Entrenched Myths” of management that Jim Collins and Morton Hansen tackle in Great By Choice is the idea that innovation can explain the performance differences.

Their conclusion: “Innovation by itself turns out not to be the trump card we expected; more important is the ability to scale innovation, to blend creativity with discipline.”

Creativity AND Discipline.

I love that. They go together like peanut butter and jelly.  Both are interesting on their own, but together, they make magic.

Good ideas and good strategies are plentiful. The weight of the research on why strategies fail points at the execution side much more so than the idea side of the equation.

In a career hanging around mostly technology organizations, the limiting factor has NEVER been on the idea front. I’ve had the great fortune to work with and around some genuine geniuses…true Rocket Scientists able to do remarkable things with design, code and systems.

In cases where the Rocket Scientist was complemented by the Rock Star Effect…the team of execution wizards responsible for packaging, producing and delivering the offering(s) and doing so in a way that consistently wins the hearts and minds of audiences, great things happened. Sales soared, stock prices climbed and fortunes were made.

While talking about Apple in this context has almost become cliché in our society, it is still annoyingly amazing to walk into an Apple store on a Friday night and see so many people hovering around what would look to an alien like 3 different devices. Obviously, Apple has been the master of managing the Rock Star Effect to great success for the past decade.

Collins and Hansen appropriately blend creativity with discipline. The discipline component comes from great management. These managers look at their business from the outside-in and they understand that the customer experience is much more than just the hardware or software, it’s the perception that every touch-point leaves on their minds and hearts.

Who said there’s not drama and sex appeal in packaging, documentation or support? 

Creating the Rock Star Effect requires intimate understanding of the audience, an ability to see and cultivate or manage the ecosystem surrounding the audience, and some truly remarkable coordination of the internal functions that are so critical to producing and delivering the finished offering. In other words, great management from top to bottom and front to back. Easy to say…and given the many very average firms in our world, not so easy to pull off.

And yes, without the Rocket Scientist…or in my already muddled metaphor, the talented musician capable of composing and creating and doing those things that the rest of us mere mortals can only marvel at, there’s no chance of a sustained Rock Star Effect.

The Bottom-Line for Now:

The audience sees and lives and remembers the concert and the talented musicians. A great concert is a lifetime memory. However, unless there’s a team working to create the Rock Star Effect, the talented musician is stuck playing bars and fairs. The same goes for Rocket Scientists. For most of our history, these brilliant geniuses earned government scale. Add one Elon Musk or Richard Branson and the talent their teams bring to creating the Rock Star Effect and there might just be a few more Rocket Scientists at the country club in the near future.

Now, I’ve got to satisfy a sudden craving for a peanut butter and jelly sandwich.

 

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.