10 tips on how to build a ‘learning organisation’

10 tips on how to build a ‘learning organisation’

Feb 18, 2019 | Change, Leadership

 

‘Learning organisation’ is a cliché mouthed too often by those who have no experience with such a rare beast. 

The key is not to try and help the organisation learn, it is to help the people in it learn by doing, spread the good outcomes, and nip the causes of bad practises before they become established as a norm.

‘Learning’ is a key part of an organisational culture that is able to evolve in response to the external pressures it faces, to best leverage the resources available.

To achieve ‘learning organisation’ as an outcome, you must change the natural order of most enterprises, by applying a huge dose of leadership.

That is what makes it so hard, so to succeed, follow these 10 tips!

Remove the fear of failure.

Fear of failure is perhaps  the greatest impediment to learning, as nothing new is tried.  Employees need to be given the confidence that following an idea that does not deliver will not result in retribution.  Experimenting and learning in collaboration with suppliers and customers offers rich rewards.

Employment policy.

Employ those who are prepared to try new things, be a bit different, seek challenges and opportunities to test themselves. Too often we employ people who ‘look like us,’ and as a result we get more of the same. Be aggressive about the sort of employees you want. Being selective at the beginning pays off in spades, as there is little as challenging as undoing a poor employment choice, for  the person let go, the person doing the firing, and for the survivors. That does not take into account the costs of recruiting, training, and the opportunity costs of a poorly performing employee.

Future focused metrics.

Use metrics that are based on leading indicators of performance, not extrapolations of past performance. These metrics are challenging to identify and track, but the effort will be worth it.

Cause and effect, not correlation.

Ensure the links between cause and effect are real. Too often I see outcomes attributed to something other than the real causes, mostly because it is convenient and easy, and there appears to be a causal relationship. True cause and effect can be challenging to identify and quantify,  but is essential to understanding how the future will shape itself.

Use data but be careful of data seduction

Data can be used well or poorly, but data has in itself a character of precision and certainty that can be misleading. Clean and objective data that removes assumptions,  the power of the status quo, and really digs into the reasons something worked, or did not work, is required. Data also has two faces. What has happened, and what will happen. The former, when interrogated effectively can tell you a lot about ‘what’ happened, but often the ‘why it happened’ is elusive, requiring testing. Data presented as a definitive picture of the future should be taken with a huge degree of scepticism, as the only thing for sure we know about the future, is that it will not be the same as the past.

Take action.

Nice words do not move anything. Nothing happens until you take action, then learn from the outcomes and improve next time, by ensuring that the action is taken against a framework that has in it a core assumption being tested. When you do this methodically, you get to understand if the assumption was right or wrong, and why.

Build in time to think.

Those who are always busy, pushed by external schedules, do not reflect on things, do not give themselves the opportunity and time to just think about what has happened and why, the opportunity for the  flashes of insight, questions that need to be  answered  to emerge must be present.

Diversity.

Change the status quo from one where you have to fit in, to one where differences are valued, celebrated, and actively sought. This is not about gender, it is about thinking styles and differentiated skill bases.

Accountability. 

When no one is accountable, few will be prepared to take the initiative. Being transparently accountable, creates a bias towards action, which leads to learning. 

Process stability. 

This is a prerequisite for improvement. Unless you know which variable moved, and caused the outcome being examined, you have no chance of improving. Process stability is an essential ingredient of any improvement exercise, and improvement is all about learning.

These 10 tips have significant areas of overlap, and have in themselves cause and effect relationships. When you need someone to help untangling the mess, give me a call.

 

Header cartoon credit: another by the great Hugh McLeod of gapingvoid.com

How to find the ‘Zig’ when others are ‘Zagging’.

How to find the ‘Zig’ when others are ‘Zagging’.

Feb 11, 2019 | Change, Customers, Leadership

 

Being a part of the herd may be comfortable, but it is rarely sustainably profitable at levels greater than the cost of capital.

Finding points of differentiation, the means by which you can be distinctive preoccupies most thinking marketers, those factors that customers value that attract them to your offering rather than going up the street.

It also means, by extension, that you have made decisions about the nature of the market segments or niches that you wish to serve.

By definition, if you are setting out to be all things to all people in the hope that you will not alienate anyone, you cannot also differentiate, as it means that you are not distinctive in some meaningful way that adds value to specific types of customers.

Differentiation covers more than the value proposition and copy on your website, it follows through to the visual elements of your branding, and most importantly, the behaviour of your employees, channel partners and stakeholders. By reflecting the few factors that will make those ideal customers react to your differentiated offering in a niche they inhabit is a valuable building block. Everyone is familiar with the  cliché ‘a picture replaces a thousand words,’  which is never truer than when communicating a differentiated offer to specific group of users in a defined market niche. A graphic artist will call it a ‘Visual identity’ and it is worth the investment to refine it.

One of the best known ‘Ziggers’ is the recently deceased Herb Kelleher, co-founder and CEO of Southwest Airlines. Southwest retained an unbroken 43 year record of profitability in an industry that had wild fluctuations in profitability, and many of those airlines that set about killing Southwest in the early days are themselves now history, like Pan Am, or in and out of Chapter 11 like United.

Southwest focused on simplicity and their customers. When others employed spoke and wheel routing, they went point to point, as others added services like allocated seating and differing classes, Southwest did not, and they flew just one type of plane (Boeing 737) , making servicing easier, and while everyone else went to war with their employees, Southwest turned theirs into apostles for their employer.

Differentiation is more than being different, those differences must be of sufficient value to some customers, that they would  not go anywhere else.

 

   

 

 

Who gets the blame when the Financial Services Royal Commission is distorted and ignored?

Who gets the blame when the Financial Services Royal Commission is distorted and ignored?

Feb 6, 2019 | Change, Governance, Leadership

The release of Royal Commissioner Haynes final report into the Financial Services industry has been instructive in many ways.

One that will not get much media coverage is the manner in which the various political and interest bodies respond and reflect on their own part in the mess. By contrast, every person watching the various commentary will immediately come to a conclusion about the trustworthiness of those in whose hands is the commentary on the report, and the formulation and implementation of the means by  which the eggs will be unscrambled.

The refusal of Royal Commissioner Hayne to be a part of the governments spin job by refusing the treasurer a handshake for the cameras is instructive. It could be passed off as a bit rude, the reflection of a personal relationship  that needs some repair, or simply a reflection of Justice Haynes absolute lack of  faith in the goodwill of the Treasurer and the Government.

It would be surprising if it was not the last one.

On being interviewed on the ABC later that night, the Treasurer refused to answer the simple question ‘Was the Government wrong in voting against the establishment of the Royal Commission 26 times?  Followed with the equally simple ‘was it the threat of a backbench revolt that finally led the Government to agree to conduct the Royal Commission?’ 

We live in a complex world, ruled by a voracious appetite for the product of an ‘always on’ media, which has responded not by reporting facts, but  by supplying more shallow, opinionated, uninformed and juicy grist for  the mill.

Added to which politicians of all shades pick and choose selectively the numbers and quotes that reflect their established positions, ignoring anything else that might get in the way of a press release.

It is not the media’s fault, it is ours.

We no longer value truth, facts, and a contrary fact based opinion, although we crave them all.

The outcome is that we assume when a public figures lips are moving, they are either lying or blaming someone else.

The only solution is the implementation of what Ray Dalio would call ‘radical transparency’. 

Photo credit: ABC news

 

Australia Day 2019

Australia Day 2019

Jan 25, 2019 | Leadership, Personal Rant

Comes around quickly doesn’t it!

Tomorrow!

2018 was a pretty ordinary year, with the revelations of the Financial Services Royal commission after the government was dragged screaming to the table, sandpaper making its (public) debut in test cricket, utter chaos and turmoil at all levels of Australian politics, house prices in Sydney taking a dump, and my previously resilient 92 year old mother being verbally bashed and left babbling by some scammer bastard on the phone demanding money.

2019 should be better, after all we are Australians.

Sometimes I do not know what that means any more.

As I look forward, I am filled with cynical anxiety at what is becoming of the Australia of my childhood, now long gone.

We can look forward to being molested by politicians and aspiring politicians over the next 3 months, desperately applying layers of lipstick to whatever pig turns up  that day in an effort to  buy our votes. The prevailing sentiment seems to be ‘to hell with them all’ as it relates to the major parties, but then you have the loonies, amongst a few gems turning up as independent options. I suspect a few will find themselves elected, then have to check where Canberra is located.  So much for the intelligent, long term and visionary policy planning we so desperately need in a whole range of areas affecting our daily lives, and those of our children and in my case, grandchildren.

On top of the politicians, we have the usual suspects bleating about the date. ‘Jan 26, Invasion Day’ seems to be the core issue. It is perfectly reasonable that a number of the descendants of the indigenous people  of the late 1700’s feel aggrieved, but let’s be serious, it was 220 years ago, and even if we pull it forward 150 years to capture the appalling, by our current standards, treatment of  indigenous people up until recently, it is still in the past.  The argument about Australia Day does not have to be a binary one. It is the day everything changed, for better or worse, let’s just get on with continuing to build resilient communities and a caring, successful, inclusive nation.

We all wait with baited breath for the announcement of the Australian of the year. Last years AOTY Professor Michelle Simmons was inspired. How she got through the selection processes that strongly favours male sports stars who have not yet featured in the popular press for bad behaviour is beyond me. Perhaps a sign of maturity in the selection panel? Hopefully that level of maturity prevails again this year, and we honour someone who has made a real contribution, rather than just being well known.

Have a great day tomorrow, enjoy the barbie a few beers and your friends and family, but also give some consideration to what you want this country to look like, and how you can make a contribution.

Happy Australia Day!

Header cartoon is from the ‘First dog on the moon’ series in the Guardian. Rarely politically correct, always biting!

The ’90 day trick’ for success

The ’90 day trick’ for success

Jan 18, 2019 | Leadership, Operations, Small business

 

We tend to overestimate what we can do in a day, but underestimate what we can do in a year. 

This is a well understood cognitive bias first articulated by Roy Amara, as it applied to tech development, but I have found it holds everywhere else.

90 days appears to be the intersection of the two.

It is short enough to create a bias to action, a sense of urgency, but long enough to make meaningful progress while accommodating the adaptations that appear along the road.

In my consulting, I encourage, indeed demand planning followed by execution of the plan. However, it is always challenging to have a 3 or 5 year plan aligned with the day to day activities, so I encourage what I call ‘nested’ plans.

A nested plan is one that has a longer term outcome agreed, then progressively broken down into annual, three month planning and performance assessment cycles, broken further into monthly and even weekly and daily plans, depending on the situation.

For example, a factory should be working on rolling daily plans, sales working on weekly plans. Performance measurement should follow the planning cycles, and be made absolutely transparent. For example, I encourage weekly rolling 13 week cash flow forecasts, which deliver the combination of urgency and perspective over the more usual financial reporting of monthly profit and loss.

It all comes down to determining what you are going to do today that will contribute to the outcome required, today, this week this month, this quarter and so on. 

Without a nested plan to which you commit, you will always tend to do the seemingly urgent but unimportant things rather than the important longer term things. These longer term activities are always more emotionally and intellectually challenging, which is why we put them off, find excuses, and generally procrastinate.

It is a fine circus act, this short term/longer term balance, one that is hard to maintain, requiring concentration, situational awareness, and finesse, but essential for success.

A note of caution to finish.

As essential as the planning being a part of normal activity, so should be the ongoing incorporation of feedback into the plans. A robust review and incorporation process is as important as the planning itself. No good ensuring you stick to the plan when it runs you off a cliff. 

 

 

The 11 point program for scaling your business.

The 11 point program for scaling your business.

Jan 8, 2019 | Change, Leadership, Strategy

 

Successful scaling of a business is not luck, nor is it just good management, it is way more than both.

It is having the leadership capacity that enable all those in the business to consistently and willingly take action that collectively, over time, compounds into growth greater than that available from just doing what you are doing now a bit better every day.

It takes leadership, because this stuff is hard.

Good managers manage, leaders define what it is that needs to be managed, when, and how.

Over 40 years of working with this challenge, it seems to me there are some common traits amongst those businesses that successfully scale, all originating with the leadership.

None of the following can be taken in isolation. as they all contribute to each other. There is a synergy you need to find that is necessary for scaling, as distinct to improvement.

To scale, you need to change what is done, and how it gets done, rather than just improve the way in which things get done. There is a quantum leap in this seemingly minor semantic difference.

 

Have a genuinely stretch goal

Scaling a business requires change, which is uncomfortable, so there must be a very good, well communicated reason for the discomfort to be imposed, with a specific outcome. Often this is now called a ‘BEHAG’ a term coined by Jim Collins in his book ‘Built to Last”. In it absence, nothing will change. The most obvious example is President Kennedy’s 1962 commitment to land a man on the moon by the end of 1969. You have to find, communicate and commit to your metaphorical ‘man on the moon’ goal.

Underneath the BEHAG there must be a strategic plan, broken down progressively into its tactical components in order to deliver the goal.

 

Alignment.

A much used and abused word, but absolutely necessary.  Every person, and every persons activity has to contribute meaningfully to the strategies in place to deliver the objectives, irrespective of the time frame of those objectives.  Without some sort of overriding objective towards which every person and activity can be looking, the outcomes will be suboptimal.

The metaphor I always use to describe alignment is that of a rowing eight, training towards a major championship, for example the Olympics. Every training session, every activity of each of the eight who will be in the shell, as well as their support staff, needs to be looking towards that goal of winning that medal. Everything that is done needs to be judged by the simple criteria of ‘will this add to winning that medal’?

 

Strategic Ambidexterity.

Let me explain this idea of strategic ambidexterity.  Every small action taken has to be a part of a larger action that builds into the scaled outcome. Any individual is easily distracted in their daily lives by the urgent but not important things that arise. Allowing those distractions to consume time takes away from the objective of scaling. Therefore, the focus of every person has to be on the one thing today, tomorrow, this week, month, quarter, and so on that has to be achieved in order to achieve the scaled target.

If you were to set out to run a marathon under 4 hours, you would  not just start trying to run the 42km from day one, you would fail. You would break your training down into pieces, each one building on the last towards the objective. You would have a range of daily sessions, building into weekly and monthly targets that would eventually result in the successful completion of the marathon. It takes time, dedication, and a dual focus in getting every small step completed sequentially, while recognising that each one builds progressively towards the objective.

Engaging your supply chain partners and customers in the process adds to the power of the process. It is like having specialised trainers and suppliers of equipment contributing to your overall program. As success builds, you will find that they want to come on board, as everyone wants to be part of a winning team, which further builds momentum.

 

Operational rhythm.

Every activity and set of activities can be managed to have some sort of operating rhythm. In most cases it is unrecognised and unmanaged, so is not optimised. The most obvious example is the annual budget setting process most businesses go through. This normally happens in some sort of regular order and manner, to some sort of timetable. It is also in most cases I have observed, an addition to the routine set of activities, and is therefore an imposition rather than being a key part of the business management and development process. Similarly, the process to turn an order into product will follow some sort of routine that follows roughly the same set of steps every time. However, in every case, without an explicit and transparent process that has performance measures and associated management in place, the process will inevitably ‘wander’ being subject to change for many reasons. Process stability, noted below is essential for a predictable and consistent operational rhythm.

 

Accountability.

Ensuring clarity of accountability  for an activity, item, and process is essential to performance that can be measured and improved. Without accountability, a problem will always be someone else’s problem. Accountability, responsibility and authority often become entangled in ways that leave the improvement and scaling of any set of activities challenging.

Accountability means that someone is specifically held accountable for the activity or set of activities. That person is accountable to track the progress of the activity, process, function, whatever it may be, and give it a ‘voice’. If you cannot nominate one person who is specifically accountable, it will fall through the cracks. Responsibility falls on anyone who has the ability and opportunity to respond to proactively support an activity or process. Anyone who ‘touches’ a process has some responsibility. Authority belongs to the person with the final veto power.

For example, in a previous life as GM of a large organisation, I had authority over the expenditure of marketing budgets, product managers had accountability for  the specific activities that took place in their brand portfolios, and we all had responsibility to ensure that the customers who bought our products were serviced in a manner that had them coming back for more. 

The question ‘how can I be held responsible without the authority’ is often asked. The answer is that ‘it depends’. Everyone has the responsibility to manage their own activities on a daily basis, and be held accountable for the outcomes, but as you move up a corporate ladder, it becomes increasingly challenging to maintain the link. The more senior you are the more you will be held accountable for things over which you have less and less direct control. That direct control is held at lower levels in the organisation.

The key to making this all work is to thoughtfully and consistently delegate. This requires that you pinpoint the job to be done, have a system of interlinking KPI’s, and that there is explicit and transparent performance feedback and management of both the process and those held accountable for the components of the process.  

 

Stakeholder engagement.

All stakeholders, and most critically, employees need to be ‘engaged’ in the objective of scaling a business. To go back to the metaphor of the rowing eight, if one oarsman is not concentrating, and is therefore slightly out of rhythm, the performance of the eight will be critically compromised. That out of rhythm may be created by the training regime of the individual, the maintenance of the oar, and many other specific sources that together add up to the sub optimum performance of the eight when engaged in the race.

 

Clear, unambiguous and valuable personal purpose.

Again to refer to the rowing eight. Every member of  the crew and support staff know the purpose is to compete in the Olympics, and to do everything possible to win. To every person, the goal of winning is a personal one, as well as one that motivates and directs the team, and to every person, the goal provides a deeply personal objective upon which they can focus all their efforts and emotion.

It is no different setting out to scale a business. If the employees see the objective of scaling as being one that will enrich the proprietors  and shareholders without  anything in it for them, why bother. The purpose has to be one with a ‘higher calling’ that delivers something very personal for everyone.

 

Performance transparency.

No improvement project, let alone one that requires scaling can be successful without a roadmap provided by performance measures to show progress, identify weak spots, and offer alternative perspectives.  The greater the level of transparency the better able will the whole team be able to buy into the program.

Performance transparency  has a number of faces. It covers individual, team, and corporate performance measures, from the perspective of both the internal KPI’s and the external ones that will impact on the manner in which the enterprise competes. These external KPI’s are those factors that impact performance, but over which the enterprise has no control other than being aware and able to accommodate and when possible leverage them.

 

Process Scalability.

It is a fact that as enterprises become bigger, the degree of complexity increases as the number of people, teams, functions that require co-ordination and alignment grows. With size comes complexity. The essence of a scalable management infrastructure is simplicity and conquering complexity is a challenge of leadership as well as the management of the processes themselves.

The tool that works best in my experience is to document all processes. This enables the process to be applied consistently irrespective of the person working it, and is the basis for  improvement, without a starting point that is stable, no process can be improved.

 

Marketing.

Everyone is in marketing. From the CEO to the lowest level support staff, everyone has a responsibility to be an apostle for the business. Word of mouth, personal recommendation, whether it be by clients referring you to prospects, or your employees telling their friends what a great place it is to work, remains the most effective form of marketing. All that comes after is in one way or another a scaled version of that first person marketing.

Scaling marketing is not a matter of posting some cat photos on Facebook. It is a disciplined process of communicating your value proposition progressively to those most likely to be future customers, and retaining those you already have. It is very easy to blow huge resources under the banner of ‘marketing,’ but like all things worth doing, it is not as easy as it sometimes seems, requiring clarity of the value proposition, an ideal customer persona to be served, and a product and service mix that is both differentiated and valuable to customers.

As marketing is exercised externally,  the potential for misdirection and complication is significant, so focussing attention on the productivity of marketing expenditures is a key to being able to successfully scale.

 

Cash.

Growth, let alone scaled growth, are voracious consumers of cash. Proactively managing your cash resources is essential. From time to time borrowing may be necessary, but when it becomes necessary to keep the day to day activities going, you have over-reached, and quick remedial action s necessary.

 

Without wishing to belabour the point made in the intro, the absolutely essential ingredient is leadership, without which scaling will not be possible.