No One Asked My Opinion…But $100 Billion for What?

February 1, 2012 By 4 Comments

As of this writing, the world is abuzz with the expected Facebook IPO. The number $100 billion is being floated and passed around (probably by those who stand to benefit from a big IPO), and whether real or wild speculation, that’s a number that gives one cause to pause.

This is beginning to feel like Déjà vu all over again (thanks, Yogi Berra), much like that fascinating period in the late ‘90’s when stratospheric valuations were applied to firms that had no products, no earnings and sometimes no revenues. That was a heady time, when the laws of nature, physics and finance were seemingly supplanted by the value of eyeballs and business models that had no substance or staying power. 

Unlike many of the great dot-com flameouts, Facebook has a lot going for it, including near world-domination of the social media scene and reportedly, good and growing revenues for advertising. Throw in some alleged profits and it certainly sounds like the law of gravity has not been eliminated…just eased a bit. 

I’m certain I will raise the ire of the many who now view Facebook as an important part of their lives (disclosure: I’m a Facebook misanthrope), however, I can’t quite comprehend the valuation for the value proposition.

The proliferation of this medium is fascinating and not to be ignored, but it doesn’t fundamentally change much of anything as it relates to how companies run their businesses. It does offer incremental opportunities for communication, connecting and monitoring, but I don’t think most firms in most industries are rethinking their business models and value chain activities based on Facebook.

While my crystal ball is notoriously cloudy when it comes to prognosticating on stocks, I know enough to steer clear of numbers where a reasonable person cannot connect the fundamentals to the price.  Of course, many years ago, I met a guy named Howard and had a strong cup of coffee and failed to see that this would ever catch on. After all, good coffee at the time was weak and cheap.

For a more cogent view of why this doesn’t makes sense, be sure and check out the article on Forbes: Four Reasons Why Facebook’s IPO is Irrelevant.

And for those who have a strong defense of the game-changing, we should all rethink our business models impact of Facebook, I’m looking forward to your thoughts.

Filed Under: Strategy Tagged With: , ,

Strategy-Towards Hypotheses, Experiments, Involvement & Learning

January 25, 2012 By 6 Comments

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.

Filed Under: Leadership, Leading Change, Project Management, Strategy Tagged With: , , , ,

3 Key Strategy Questions to Ask Your Teams Regularly

November 29, 2011 By 6 Comments

In my experience, the management teams that lead the best performing businesses are those that incorporate at least three key strategic questions into almost every operational and status discussion.

What are Your Teams Talking About?

The gross majority of the dialogue in an organization is about How, and Who and When and the important What and Why issues are left for strategy meetings and other “high-level” discussions. While understandable in the hectic pace of the workday, the shortage of these important What and Why discussions reinforces a dangerous form of operational myopia, where the underlying and unspoken assumption is: If we simply get this done, we’ll be better off as a firm.

No disrespect nor trivialization intended for operations and execution. Getting it done is critical. However, my premise is that you can strengthen (without paralyzing) the quality of these discussions (particularly management and project team discussions) and potentially uncover new ideas or cross-check long-standing assumptions, with the regular inclusion of a few key questions.

3 Key Strategy Teams to Ask Your Teams Regularly:

1. How does this initiative help us grow/create power? (Power: new customers, new revenue in current customers, new revenue in new/adjacent markets, market share).  If it doesn’t directly tie to or enable the creation of power, why are you doing it?

2. How meaningfully different is this to our clients?  So many ideas are good in isolation…promoted by people passionate about their offerings, but ultimately, they are not meaningful enough to clients to prompt action (investment, change, trade-out etc.). While not all clients can articulate what they want (as Steve Jobs taught us most recently), your team must be able to substantiate that the initiative is one that will prompt action.

3. How defensible is our approach versus our most dangerous competitors?  Too many “me too” and easily replicated initiatives is a formula for stagnation or decline. If you cannot pass this critical acid-test question, something is wrong.

The Bottom-Line for Now:

These are just a few of the important questions that must be regularly asked and answered in the course of forming, assessing and adjusting strategy. However, instead of saving all of the good questions for the offsites, start immediately incorporate these three in your management and status meetings, and you’ll dramatically increase the quantity of meaningful dialogue (and action) taking place every day.

–

Want More? Check out Art Petty’s latest book, Leadership Caffeine-Ideas to Energize Your Professional Development. Created for fast-moving and highly motivated professionals and leaders, Leadership Caffeine offers more than 80 short, idea-packed essays for the critical leadership and professional development situations in your life. (All royalties on purchases through 12/2 will see the royalties donated to a local food pantry. See original promo note for specifics.)

Join the many groups and management teams and meeting/conference organizers who have adopted Leadership Caffeine as a discussion and development tool. The collection makes a great gift for the newly promoted leader or for your team during the holidays.

About Art Petty:

Art Petty is a Leadership & Career Coach and Strategy Consultant, helping motivated professionals of all levels achieve their potential. In addition to working with highly motivated professionals, Art frequently works with project teams in pursuit of high performance. Contact Art via e-mail to discuss a coaching, workshop or speaking engagement or to inquire about being a guest on The Leadership Caffeine podcast.  

Filed Under: Leadership, Strategy Tagged With: ,

Ten Places Where Management Teams Misstep on Strategy

November 8, 2011 By Leave a Comment

Strategy…the discussions…the decisions and of course, the execution, is hard work filled with ample opportunities to misstep. From revisiting and updating the underlying assumptions about your business, markets and competitors, to the vexing issues of deciding what to do and what not to do, it’s no surprise that many management teams avoid this work and focus more on incremental operations planning and improvement. However, for those who are courageous enough to go down this important path and do the heavy lifting, here are my top 10 pitfalls and speed bumps to avoid during your journey.

10 Places Where Management Teams Misstep on Strategy:

1. They Over-Admire the View from Their Window. The Inside-Out View that too many teams rely on is a giant decision-trap waiting to swallow the business. Always strive to cultivate the Outside-In perspective. It’s hard work and takes time and help. And yes, it is priceless.

2. They Equate Action with Progress. Action doesn’t equal vector. Strategy is all about choosing specific vectors and ignoring others. Many management teams cut through the front-end of the work in a rush to action, instead of asking and answering the tough questions about their business.

3. Strategy Vocabulary Babble Boggles and Bewilders. Ask 10 executives how to define strategy, vision and value proposition and watch the fun begin. Ask them what business they are truly in and how they differentiate from competitors and the discussions can go haywire. Work hard to establish common terms and definitions up-front.

4. Warning, Rapid Descent! Discussions Rapidly Descend to the Operational Level. Along with the Rush to Action, it is common for the discussions to dive deeply into operations long before the hard questions have been asked and answered.

5. Teams Experience a Power Shortage. Instead of focusing on how to create power…that is to create new revenue, capture new customers, grow faster than the market and grow profits, the discussions emphasize incrementing off of old power sources. Finding “new power” is critical to every firm and must be the focal point of every strategy process/discussion.

6. They Delegate the Deep Thinking to Consultants. I strongly advise using outside help to guide the process work…to ensure that the teams focus on creating power and fostering an outside-in approach. However, don’t fall into the trap of expecting the consultants to be able to tell you what might be your best next steps. Let them help you find the way forward…and don’t shirk your responsibilities to make the hard calls.

7. Too Many Teams Forget to Involve the Right People in the Process. While those at the top of the pecking order own the final calls, there are many, many people in your organization with insights to share and ideas to proffer. Find a way to engage and solicit input. And since these are the same people who will carry out your new directions, early involvement reduces some of the natural barriers to change. Strategy is a full-contact sport across the organization!

8. They Falsely Expect Sure-Fire Miracles to Emerge. Strategy is nothing more than a series of educated hypotheses backed by intelligent experiments. Instead of expecting the Ah-Ha moment (they happen sometimes, but don’t count on it), look at strategy as a series of experiments designed to build power.  Of course, don’t forget to build in the feedback and learning loops or the experiments will go nowhere.

9. They Lack the Leadership to Make Asymetrical Bets.  This is Geoffrey Moore’s terminology from Escape Velocity, and I strongly believe he is right. If management is struggling to find new sources of power, the right choices will often be those that are different, radical and perceived as highly risky. It takes true leadership to stare asymmetrical bets in the eye and move forward.

10. It’s Never Just an Event! Strategy is a process, not an event. The annual offsite is fine, as long as the issues and experiments and engagement on strategy and learning is happening all of the time.

The Bottom-Line for Now:

In my experience working with many management teams, it takes incredible fortitude and discipline to steer clear of the Top 10 and keep the process moving.  Use the list above in good health. Reference it frequently as a reminder of the pitfalls and traps. And of course, feel free to add your own. Focus on this, and you’ll uncover a number of other traps along the way.

And yes, then there’s number 11…this little problem with Strategy Execution. That however, is a topic for another day.

–

JUST RELEASED! Check Out Art’s New Book: Leadership Caffeine-Ideas to Energize Your Professional Development

Want More: Sign up for the new, Leadership Caffeine e-Newsletter.  I’ll guard your e-mail address with ferocity, while sharing ideas to energize and inspire.

About Art Petty:

Art Petty is a Leadership & Career Coach and Strategy Consultant, helping motivated professionals of all levels achieve their potential. In addition to working with highly motivated professionals, Art frequently works with project teams in pursuit of high performance. Art’s second book (an edited, annotated collection of the most popular leadership essays), Leadership Caffeine-Ideas to Energize Your Professional Development, was released at the end of September in 2011.

Contact Art via e-mail to discuss a coaching, workshop or speaking engagement.

Filed Under: Strategy Tagged With: , ,

Management and Leadership Week in Review for Oct 21, 2011

October 21, 2011 By Leave a Comment

Note from Art: Almost every week, I offer a recap of some of the more thought-provoking management and leadership content that I’ve tripped across recently. The selections are eclectic and always intended to stimulate your thinking. This week’s selections include content on The Great Tech War of 2012, ideas for strengthening your coaching skills, insight into three critical leadership skills and a book that offers something for all of us as we try to escape the pull of the past in our organizations.

-From FastCompany, The Great Tech War of 2012, is must reading for any student of strategy and business. And yes, we’re all living in “interesting times” as the saying goes, but the shifting landscape for our eyes and wallets in the tech sector is fascinating to an extreme. The article provides a great view of the battlefield and the combatants.

From the article: “To state this as clearly as possible: The four American companies that have come to define 21st-century information technology and entertainment are on the verge of war. Over the next two years, Amazon, Apple, Facebook, and Google will increasingly collide in the markets for mobile phones and tablets, mobile apps, social networking, and more. This competition will be intense.”

 -From Scott Eblin: “How to Be a Really Useful Coach in Five Minutes or Less.” Scott is a true pro in the executive coaching world, and his book, The Next Level, is a must read for anyone seeking to climb to the next executive rank. His short post will take you less than five minutes to read and leave you armed with some timeless and time-saving good questions to use on the move. (For an added resource, check out my Leadership Caffeine Podcast Episode with Scott Eblin.)

-From HBR Blogs, Morton T. Hansen offers: “Three Leadership Skills that Count,” drawn from his work with Jim Collins for their new book, Great by Choice.

The focus is on leading and succeeding in chaotic times and Collins and Hansen identified three leadership skills: Productive Paranoia, Empirical Creativity and Fanatic Discipline, that in their opinion are critical. From the post: “You need all three leadership skills in an uncertain world: Fanatic discipline keeps you on track; empirical creativity keeps you vibrant; and productive paranoia keeps you alive.”

-Book Recommendation: Escape Velocity-Free Your Company’s Future from the Pull of the Past by Geoffrey A. Moore.

See my post and listen to my interview with Geoffrey Moore to understand why I’m a strong supporter of his latest work.

–

JUST RELEASED! Check Out Art’s New Book: Leadership Caffeine-Ideas to Energize Your Professional Development

Want More: Sign up for the new, Leadership Caffeine e-Newsletter.  I’ll guard your e-mail address with ferocity, while sharing ideas to energize and inspire.

About Art Petty:

Art Petty is a Leadership & Career Coach and Strategy Consultant, helping motivated professionals of all levels achieve their potential. In addition to working with highly motivated professionals, Art frequently works with project teams in pursuit of high performance. Art’s second book (an edited, annotated collection of the most popular leadership essays), Leadership Caffeine-Ideas to Energize Your Professional Development, was released at the end of September in 2011.

Contact Art via e-mail to discuss a coaching, workshop or speaking engagement.

Filed Under: Leadership, Strategy Tagged With: , ,
« Previous Page
Next Page »