Jun 8, 2022 | Leadership, Management, Strategy
Much of the volume of paper dedicated to pontificating about strategy these days seems to focus on ‘Purpose’. Sadly, we do not have a workable and agreed definition. What we do have is confusion about the meaning, particularly when you consider the other strategic pontification generators ‘Mission’ ‘Vision’ and ‘Values’
What are the differences, and how do they improve enterprise performance?
In my view, spending time worrying about the differences, and similarities is time wasted. All are words that should lead to four outcomes that will improve performance.
Strategy.
They all provide a framework against which strategic decision can be measured. ‘Does this decision enhance our performance in a way that assists to deliver whichever of the labels you choose to use.
Differentiation.
A well articulated statement of strategic intent, called by whatever labels you choose, supported by overt action can, and does offer the opportunity for a differentiated product offering that will be hard for competitors to copy. This generates incremental revenue, at enhanced margins when done well.
Human resources.
Most people would prefer to work for a company that makes a positive contribution to their community as well as offering competitive pay and opportunity. I have an acquaintance who used to recruit for a tobacco company. His experience was that they had to pay well over the odds, and accept a modest performer in order to keep bums in the seats to get the job done. BTW, I dislike the term ‘human resources’ but have yet to come up with a better one that does not sound confected.
Culture.
This often misused word gives a sense of direction, focus, behavioural norms, common ideals and risk management that enables the building of momentum. ‘Culture’ is the essential glue that holds enterprises together.
You do not need a strong purpose, or either of the other two to have a successful enterprise. Most have survived and prospered to date without one, but there is no doubt in my mind that it helps enormously, however you define it.
Header cartoon credit: Courtesy Scott Adams and Dilbert.
May 30, 2022 | Governance, Leadership
There is no situation that requires a decision that cannot be enhanced by asking two simple questions:
Is the information right?
Is it the right information?
These are different questions that often become confused.
An accurate piece of data is of no value if it does not relate to the question being asked, or is related to a symptom of the problem rather than its core.
Often it seems that people use data to back a point of view, and just because they have data, the critical analysis of the assumptions and methodology behind the data is not seriously questioned.
It also pays to closely observe who is asking the question, and their attitude to an unexpected or uncomfortable answer.
Charlie Munger, Warren Buffett’s brilliant offsider is credited with the quote: “In God we trust, all others bring data”. I think this is absolutely right, as far as it goes. You just need to ensure it is the right data, and you do not mistake the data for the outcomes of crystal ball rubbing, self-interest, or optimism.
Header cartoon credit: Gapingvoid.com.
May 26, 2022 | Change, Innovation, Leadership
Opportunities abound, and are hard to ignore.
They emerge to consume resources, distract attention, divert investment, obscure the focus on strategy, and generally disrupt operations.
How do you ignore, or better still, systematically, and quickly assess them, learn, and then execute or walk away?
- Relentless focus on the long-term objective, and the framework that is the strategic plan and supporting operational plans that will deliver that objective.
- Consistency between the long-term objectives and the activities that are shorter term, tactical choices.
- Have a bias for action, coupled with the discipline that any action needs to move the enterprise towards that long term goal.
- Never underestimate the power of the status quo to water down and divert the bias for strategically oriented action.
- You need the right people, those that will measure every decision against the agreed strategic objectives. This is not to remove any opportunity to divert from the strategy, it just requires more short-term agility to take advantage of tactical situations as they occur.
- Make sure you have all the facts and are working from first principles.
Strategy is all about making choices, and making a choice for option A precludes also choosing option B. This cascading of choices becomes a Bayesian decision tree as the choices cascade through the organisation from the top to the points of tactical implementation.
May 19, 2022 | Governance, Leadership
Every adult on the face of the earth has a set of biases deeply rooted in their brains. This is nothing to be surprised, ashamed, or confused about, it is the way we evolved. Our biases serve the purpose of freeing up cognitive capacity for more important, potentially lifesaving things, like the Fight or Flight response to anything that resembles danger.
Confirmation bias is one such cognitive shortcut. When we see something that we are familiar with, that confirms what we already think, we just accept it without analysis. Because it confirms to what we already believe, we accept it to be true.
We no longer live on the savannah where the rustle in the grass might be a sabre-toothed tiger, but the cognitive shortcuts that evolved in response to the need for instant recognition of that situation remain.
We use a host of these biases all the time in all facets of our lives, usually without recognising them.
Those who understand these cognitive shortcuts can use them to their benefit, and potentially our detriment. If someone can use a bias to elicit the response they want to some sort of stimuli, as in a sales situation, they can benefit, and those on the receiving end do not realise they are being manipulated.
The addition of the network effects of the web over the top of biases we all have has the effect of supercharging them. The social platforms particularly Facebook use this as a core part of their business model. Give people what they want and expect to see, and they will be increasingly committed to the view and the sources of ‘information’ on their view.
Over the time of this election campaign, we have seen the major parties put confirmation bias on steroids. Selected messages in selected places to selected audiences, seeking to confirm a selected response in the minds of the audience.
What a farce.
It is a graphic example of confirmation bias at work when what we need is thoughtful policy development and analysis as part of a robust strategy for the country.
Instead, we get this blizzard of psychologically driven tactical messages aimed only at Saturday May 21st.
I watched the Liberal Party ‘policy launch’ last Sunday morning. My penance for being so acerbic over the last months. Thankfully, both the treasurer, and national’s ‘leader’ were brief, but Scomo took 55 minutes of my life with a passionate plea to a packed house of selected Liberal party members for their vote. Presumably, he already has theirs, but what was interesting is that the whole thing was a zealot’s exhortation of a whole range of half-truths and outright misinterpretation of facts. Raw Confirmation bias on steroids for the packed house.
I wonder if any other swinging voter watched it, and had to run for the dunney as I did?
Thank heavens it will be over in a couple of days, but the hangover is likely to last for a while.
Header cartoon credit Chainsawsuit.com
May 11, 2022 | Leadership, Management, Marketing
There is an enormous difference between knowing the name of something, and truly understanding it.
Most move through school, university, and life by skimming, remembering bits about which questions are asked, and judiciously using jargon to get away with it.
Few take the time, and make the effort to truly understand.
The test is to explain that complex idea to a 12-year-old in such a way that they understand it. When you cannot do that, it is not the 12-year old’s fault, it is yours. You do not understand it fully enough to be able in simple words, metaphors, and similes to communicate the essential nature of the thing.
This is what I see from most calling themselves marketers.
Many marketers, particularly the younger ones, come up against a problem, and before doing any reasonable analysis, jump straight to some sort of digital conclusion that is often grossly sub-optimal.
Marketing is part science, part art.
It is a difficult balance, made more difficult by the simple fact that the art part of the equation only comes with experience, built upon the foundation of the science.
‘Anyone can make a subject complicated, but only someone who truly understands it can make it simple’. Richard Feynman
May 4, 2022 | Leadership, Operations
Any company that has grown bigger than about twenty or so employees has developed functional silos as a necessity. The bigger the company, the more focussed and powerful drivers of behaviour of functional employees those functional silos become.
At some point, they risk becoming self-preserving organisms, which seek survival and growth in an internal environment that competes for scarce resources to be allocated.
This is always a huge problem when seeking to generate change.
Water runs downhill, it finds the easiest way down, it builds momentum, continuously making minor adjustments, carving out a modified route as necessary.
Individuals in an organisation have a choice. Metaphorically, they can just ‘go with the flow’, or they can create friction and try and redirect the water. Few attempt to redirect the flow, and fewer still have the power to mandate it.
At some point, someone comes in and says we want some water back at the top of the hill, so someone gets some buckets, fills them, and starts back up the hill.
Almost always the journey is too tough, and they give up.
The momentum of the water still flowing down the known tracks beats them.
The task of leadership is to make that journey easier, to enable the individual to redirect their piece of the water flow, not to where it is easiest, which is the way it went last time, but to a new way, forging minor changes that cumulatively create the new best route to the end point.
Customers do not care about your internal structures, rules, and priorities. They want their product as ordered, at the agreed price, on time, no defects. This is inherently cross functional.
We have organised businesses for our own convenience, when in fact they should be organised for the convenience of customers.
Header photo credit: Lunayuna via flikr.
