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.

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.

Part 2: Focus, Identity and the High Performance Management Team

ArtofManagingIn Part 1 of this new weekly series on Creating the High Performance Senior Management Team, I identified a number of key areas where management teams often fail and fail.

Here in Part 2, I tackle two critical challenges that CEOs and senior managers must overcome on the road to high performance, and I offer 5 ideas for jump-starting team development.

While it’s reasonable to think that a group of intelligent, accomplished professionals…all peers, with deep individual expertise in their functional areas might be the stuff of a management dream team, reality suggests that we shouldn’t count on it.

Most often, the benefits that should accrue from an effective team: collaboration, enhanced creativity, constructive debate, effective decision-making, seamless coordination, effective risk identification and mitigation and execution around a well-defined problem or set of problems, are missing in action when it comes to the senior managers in a firm.

Certainly, there may be collegial and even timely and effective operational dialog, that’s often about as far as it goes. The tough topics of strategy (what to do and what not to do), execution (how to best go about it) and talent (who to develop and how) go missing. When faced with the high-altitude and rarefied air topic of strategy, group cohesion is nowhere to be found.

Two Big Challenges on the Road to Senior Management Team High Performance:

-Challenge #1: moving beyond the myth that team members can or should “leave their functional hats at the door.”

While many a CEO has implored or commanded team members to do just that in the hope that the right type of group dynamics and behaviors will emerge, you might as well ask people to pop open their skulls, remove their brains and personalities and leave them in a bin by the door to be reacquired later. We all rely on our prior experience as our key frame of reference and, after years of working and learning and succeeding, this prior experience is a core part of the value each individual brings to the group.

The challenge and the real opportunity isn’t to change the individuals, but to breathe life into the group’s reason for being. Instead of asking the team members to sublimate their own identities in favor of the group, the CEO and participating executives are better served by striving to cultivate a clear group identity that leverages those individual experiences and skills.

Let everyone keep their hats on, please, and shift your focus to Challenge #2.

-Challenge #2: Creating clarity around the purpose of the senior management team.

It’s common for CEOs and senior managers to suffer from the malady of expecting too much out of this group as a team. While it may seem counter-intuitive to reduce the scope of responsibilities of the group of people who are typically at the top of the compensation food chain, clear focus and accountability are required to  improve “team” performance at this level.

In Bob Frisch’s excellent book on this topic, Who’s in the Room? How Great Leaders Structure and Manage the Teams Around Them, he offers a cogent solution to this dilemma. Frisch suggests there are three unique conversations this group functioning as a team is uniquely qualified to conduct, and the expectation for their teamwork should be focused squarely on these three items:

1. Developing a shared view of where the organization needs to go and why.

2. Managing a prioritized set of strategic initiatives designed to get there.

3. Managing dependencies within and among initiatives to ensure their success.

Frisch offers that many management teams perceive they are dealing with these issues, but in most cases, they are engaged with each other not on the core issues of strategy and execution and talent, but rather they constantly drift to the safety of operational issues. These are comfortable to talk about in the precious moments when they are together as a group.

So, what’s a CEO and team to do?

5 Ideas to Begin Building Senior Management Team Performance:

1. Identify, discuss, debate and strive for a common understanding around Bob’s three tasks (or my version: strategy, execution and talent). Challenge each other to define what these issues mean for the organization and very importantly, what they mean for the group and their work activities, together. In my experience, it’s almost always best to use an outside facilitator to ensure that the issues inherent in the 3 core tasks are turned over, turned inside out and fully digested. (The outside facilitator can and should cry foul when the group drifts or stops short of completing the tasks. He/she can also make certain the dead rat in the room is tossed in the middle of the table for everyone to process on and deal with.)

2. Design the team. Answer the following: Who’s on? What should the group look like as a performing unit? How will the group monitor and evaluate progress and performance? What are the standards of performance and participation that are acceptable? What supporting mechanisms are necessary for team success? What’s the role of the leader (typically CEO) as it relates to the core priorities and activities? How will decisions be made? How will the group members take the issues back to their respective teams and then ensure coordination across groups? How will group members hold each other accountable? (Again, an outside facilitator experienced in herding executive teams is an important success factor in this situation.) 

3. Create time. It’s essential for senior management groups to carve out regular team time dedicated solely to those limited few priorities. Simply allocating time for big picture thinking and dialog at the annual and mid-year off-sites is missing the point. You cannot promote high performance at the senior level unless the group is working together regularly. In my experience, most senior management teams are “too busy” to make the time to focus on what should be their top priorities. Don’t fall victim to this trap.

4. Ensure separation of church and state. Keep operational issues out of Big Picture time. It’s tempting, it’s convenient and it’s wrong. Build a protocol and routine that accommodates the need to deal with operational issues and focus team time on team priorities. This point is violated regularly, and it’s always a mistake.

5. Keep the work moving beyond the executive meeting. The senior management meetings are the beginning not the end of the work that the executives need to be doing together. The CEO must ensure that discussions on the core priorities keep flowing after the retreat and well ahead of the next session. It’s a process, not an event.

The Bottom-Line for Now:

Building high performance at the executive group level starts with clarifying the reason for being of this team (beyond functional leadership) and then designing the performance characteristics and protocols necessary for the team to succeed. This takes focus, deliberate effort, vigilance and stick-to-itiveness on the part of all team members and particularly on the part of the CEO.

Next up in the series: the sticky topic of team make-up and chemistry.

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.

Sears CEO: “We have a profit problem.” Really?

ArtofManagingIn an article in the Sunday Chicago Tribune, Edward Lampert, Chairman and Chief Executive Officer of Sears Holding Corp offers, “We don’t have a sales problem. What we have is a profit problem, and that’s what we’re intending to address.”

Mr. Lampert, I respectfully suggest that you have a lot of problems in your shrinking, unidentifiable former retail empire. However, characterizing the situation as a profit problem is off the mark.

Profits are the outcome of creating value for your customers. Konosuke Matsushita, the industrialist founder of Panasonic Corporation described profits as, “the reward accorded management by consumers satisfied with a product.”

You have a management problem, a big “M” marketing problem, a relevance problem, a business model problem, a competitor problem and a myriad of other problems, but in no way, shape or form do you have a profit problem.

You have a profit symptom.

Lack of product is an outcome of poor management.

I wish you well on what must feel like a nearly impossible task. Gone forever are the days when Sears was the go-to store for everything and everyone in the middle-class. As a child growing up in the 60′s in Chicago, our weekly trips to Sears are permanently and fondly embedded in my mind as a part of my heritage.

K-Mart seems invisible in a world filled with Amazon, Wal-Mart, Costco, Sam’s, Target and Bed and Bath stores.

Your organization has at its core a “reason for being” problem.

Get that right and the profits will flow.