Art of Managing—Is Your Success Placing You on a Glide Path to Oblivion?

ArtofManagingGood to great near-term numbers have lured many a management team into focusing on the near-term at the expense of their firm’s long-term health.

While it’s counter-intuitive to think that good results are potentially unhealthy, consider:

Today’s good numbers reflect yesterday’s investment, structure and execution decisions, and while much preferred over lousy numbers, they are powerful aphrodisiacs for senior leaders who begin to over-attribute their own management skills to the success. The unspoken but believed assumptions become, “we’re good,” “I’m good,” and “this will keep going.”

Assuming that prior and current success will continue uninterrupted is a sure-fire way to place your company on a glide path to oblivion.

It Pays to Be Paranoid:

A talented CEO I work with brings the paranoia of Intel’s former CEO Andy Grove (Only the Paranoid Survive) to his assessment of the health of the revenue numbers and sources. An over-weighting and over-reliance on maintenance and add-on revenue flowing from existing customers, while good for profits, is a sign that new customer and new market development efforts are lagging. While one CEO or management team might look at the very positive results as a sign of success, this CEO suggested that, “the situation scares the hell out of me.”

How Healthy is Your Investment Pipeline Over Different Time Horizons?

Geoffrey Moore in his book, Escape Velocity, does a great job outlining this need for established business to look at their investment in new markets/products over different time horizons and to manage and measure those horizon initiatives in different manners and with different success metrics.

Moore offers that most firms end up with a portfolio of activities grossly over-weighted in the near-term horizon (1-12 months). These are activities around existing products and markets, and investment dollars might be allocated to incremental tweaks and tune-ups, all to maximize revenue and profits from existing offerings and opportunities. Good stuff of course, until you look at the portfolio of investment activities in Horizon 2 (1 to 3 years) and realize it’s a short-story and quick look.

Spend some time with your management team looking at your strategies and investments over multiple time horizons as part of an on-going organizational health check. Today’s actions sew tomorrow’s outcomes.

6 Questions to Help Jump-Start Your Firm’s Health Check Discussion:

1. The tale of the tape. What’s the mix (and trend) in new business generation from new clients/products/markets versus business flowing from existing clients and customers? While there are no absolute measures, a gross under-weighting of new sources and/or a trend that is towards existing sources are red flags.

2. Who can you point to for driving new market, customer and product results? Is anyone accountable for identifying and bringing new customers into the fold? (Warning: too many sales teams become almost solely dependent upon the existing clients.)

3. Do today’s sales and compensation programs put you in future danger? Do compensation and incentive plans support or fight new business development. It’s common for me to see firms generating good numbers, but relying on highly compensated and experienced representatives to drive tactical sales. There’s an imbalance of talent to opportunity.

4. Who’s looking ahead? Is someone outside of sales and with some organizational heft accountable for assessing and obsessing over future markets and opportunities? (This is typically a specialized form of strategic marketing…or, a future-looking business development resource. Beware, business development roles and compensation programs are often structured to focus on the near-term and more of the same type opportunities. You get what you measure and pay for.)

5. How’s your H2 looking? What does your portfolio of investment activities look like over the next year and then in the range of one to three years (H2)? Are there identified strategies and investments intended to help you expand into adjacent spaces or acquire new customers? (Read Moore’s book…the framework he offers will help your health check.)

6. Are you actively and properly shepherding H2 investments? Too many managers measure H2 opportunities at their early stages the same way they measure and evaluate current scenarios. As Moore offers, a $ of sales of the early stage of an H2 initiative moving to market is worth much more than a $ of sales from existing offerings. Define different and relevant activity and progress measures until the new investments mature.

The Bottom-Line for Now:

This is a big, important topic offered in a small post. Ironically, the point in time when you are enjoying success and the fruits of prior good work and effective decision-making, may be the time when you inadvertently place your firm on the glide path to oblivion. Great managers and great management teams fight the development of over-confidence that results from success. How hard are you fighting?

More Professional Development Reads from Art Petty:book cover: shows title Leadership Caffeine-Ideas to Energize Your Professional Development by Art Petty. Includes image of a coffee cup.

Don’t miss the next Leadership Caffeine-Newsletter! Register here

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 leader’s 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 Podcast #10: Geoffrey Moore on Escape Velocity

Cover art for Leadership Caffeine PodcastOrganizations of all sizes and types, from high tech to manufacturing and not-for-profit, struggle with a common dilemma…how to escape the pull of the past as they look forward into a fast-changing and very different world.

If you’ve ever worked for or around a firm navigating the challenges of heading into new directions and leaving past ways and legacy products behind, you know how difficult this activity truly is for everyone involved. Many try and many fail.

Geoffrey A. Moore, the renowned high-tech strategist and author, perhaps best known for his book, Crossing the Chasm, a guide to helping firms move from early adopters across this fateful and often fatal canyon, is back with his latest book, Escape Velocity-Free Your Company’s Future from the Pull of the Past.  In the book, Moore tackles this tough topic of moving beyond successes of the past towards new generations of offerings and growth.

This was a great, fast-moving interview with Moore, and unlike Chasm which was focused on high tech firms, Escape Velocity is remarkably relevant for all firms, regardless of sector. I’m excited about the fresh, practical content from Geoffrey and I suspect you will be wanting more from Moore after listening. Enjoy!

Show Sound-Bites & Added Resources:

  • The challenges that arise when trying to free your company from the pull of the past.
  • Why our current budgeting, planning and operating systems fight us when it comes to escaping the pull of the past (and what to do about it).
  • A new framework of frameworks, The Hierarchy of Powers, and why this is so important for planning and orchestrating organizational change.
  • The questions you need to be asking and answering as you refresh and act on vision, strategy and execution.
  • Understanding the Inventory of Tools available to support your efforts to move beyond the pull of the past.
  • Great supplemental resource: Geoffrey Moore talking about Escape Velocity at Stanford (video)

About Geoffrey A. Moore:

Geoffrey Moore is a best-selling author and chairman emeritus of three consulting firms, The Chasm Group, Chasm Institute and TCG Advisors, all of which provide marketing strategy and organizational advice to leading high-technology companies. More information on Geoffrey, his books and services can be found at www.chasmgroup.com.

About the Leadership Caffeine Podcast:

The purpose of this show is to connect with leaders, management thinkers, authors, educators, entrepreneurs and anyone else passionate about improving and innovating in leadership and management. If you are interested in being a guest on the show, contact Art Petty.

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 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, 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.