A critical antidote to confirmation bias.

Oct 28, 2019 | Governance, Leadership, Management

Confirmation bias is a seductive bitch.

We see what we expect to see, the things that confirm our existing views and expectations, to the exclusion of alternatives. When taken to extremes,  loonies like holocaust deniers, and the ‘no vac’ lot emerge and sprout their fact and logic free poison, and attract a small following, and the rest of us just fail to understand how.

We humans tend to see things as if we were looking out a window.  It consumes less cognitive energy when patterns of the past are just assumed by our brains to be repeated, so that is the brains default. The further back from the window, the narrower the view, but however close you get, there is still a restriction.

The challenge therefore is to find an alternative window through which to look at the problem facing you, or better still, assemble a few others with different windows through which they look at the same problem.

Do  not just  think outside the box, get another box!

One way to use this different box, or window, to continue the metaphor, when facing a challenge is to ask better questions, ones that force the challenge to be examined from different perspectives.

  • Why is it so?
  • Where is the leverage?
  • Have we described the problem correctly, or just the symptom?
  • What is the pain point?
  • What has to be true for this outcome to emerge?
  • For this expected result to become about, which assumptions have to be accurate?
  • What happens if we do not decide?
  • What does this challenge look like in other arenas?
  • Are we relying too much on data?
  • What does the behaviour of others when confronting this really look like?
  • Is the data we have reliable, or has it been ‘managed’?
  • How is this different?
  • Have we simplified the challenge sufficiently for a solution to emerge?
  • What would the devils advocate say?

I could go on, but you get the picture.

Driving change in a business means butting heads with confirmation bias.

This is why you need a distinct catalyst to kick it off, and keep it running, for the change process to be successful.

Ask better questions!

5 meanings of ‘Send me a proposal’

Oct 21, 2019 | Customers, Management

 

Send me a proposal is a phrase I hear from time to time, and most of my clients hear often.

The challenge is to interpret what it really means.

Possible meaning 1. You have their attention, your pitch has generated genuine interest, and it is likely that there will be a job here, assuming the demons of the procurement process, and that person in the background with the power of veto, is amenable. Great.

Possible meaning 2. There is a job here, but you are not going to get it. Our procurement process requires us to have three quotes, and yours is number three. We can now confirm our first choice has the job.

Possible meaning 3. Great meeting you, thanks for the time and information. Your offer is really interesting, and I would like to go ahead, but cannot. However, I really like you, and would not want you to feel as if you have wasted your time, so send me a proposal.

Possible meaning 4. We think we have a problem, but are not sure, and even if we have, are not sure if it is worth addressing. Therefore, have a think about it, do some preliminary research, and give us your views, we will be grateful, we will both know  a bit more.

Possible meaning 5. I am just making myself feel important by asking for a proposal, but do not have the authority or budget to commission such a crazy project.

Clearly there are many variations, but they seem to boil down to these five.

I recently made the mistake of preparing a proposal for an industry body, knowing at the back of my mind that it was a waste of time, but the exercise of gathering the information to prepare it was useful for other reasons, so I proceeded. As anticipated, there have been a number of requests to amend the proposal, which has been done, but I do  not anticipate a green light any time soon.

As consultants, and service providers, we can spend a lot of time preparing proposals that will never go anywhere, and the time we spend is not valued by those who are asking us to do the preparation. It is up to us to leverage the opportunities as we best we can.

There are several strategies you may want to think about, all require you to have some sort of

‘RFQ Qualification’ process in place.

  • Politely decline the opportunity. It seems that sometimes when you do this, it just confirms in the mind of the potential client that you are in fact the right person for the job. You can then go around again if you choose to.
  • Reframe the RFQ so that you are responding to the question through a different frame from the one your competitors will use. At least that way, a real choice has to be made, and perhaps some deeper thought put into the brief, and ultimate choice. Sometimes this works.
  • Subcontract the job to someone else, and should they get it, you can clip the ticket.
  • Run for the hills.

In most cases where a proposal that acts as a competitive tender is required, there will already be a preferred tenderer. If you do not know who it is, it is not you!

 

Header cartoon credit: Scott Adams, again nails it.

 

 

 

What is the most challenging goal you could set?

Oct 14, 2019 | Branding, Management, Strategy

 

 

Simplicity.

We live in an ever more complicated world, and our instinctive response to external complication leads to internal complication in order to be able to manage the external.

Having ‘Simplicity’ as a driving goal, something to be strived for, has the potential to offer rewards from internal savings made by the reduction in ‘friction. It also delivers benefits to customers, making it easier, and more exciting to do business with you than an alternative.

These benefits translate into cost savings and revenue increases for the business, and added value for customers, a virtuous cycle.

It does not matter if you run the corner sandwich shop, or a multinational corporation, the challenge is the same, just the size of it varies.

Apple under Steve Jobs made Simplicity more than just a goal, it was the glue that held the culture together. Simplicity became, as Jobs said, the ultimate sophistication.

Mark Twain in writing a letter to his wife wrote ‘I have written you a long letter, because I did not have the time to write a short one.‘ This captures the essence of simplicity: it is hard, even for experts to achieve.

The power, as well as the challenge, is in the simplicity

 

Header Photo: courtesy Flikr and Jeannie Tseng.

 

 

 

How to avoid being misled: Measure the drivers, before results.

Oct 9, 2019 | Management, Small business

 

The old cliché that you get what you measure, is right. You want more of something, make it a KPI, measure for it, and the chances you will get it are dramatically improved. The corollary is that you need to ensure that what it is that you are measuring is really what you want.

This obvious cause and effect is sometimes called The Lucas Critique, after the economist Robert Lucas, who in a 1976 paper, articulated the obvious fact that economic policy when implemented, drives changes in the  outcomes that were inconsistent with the assumptions made when the policy models were developed. This is because the assumptions remain fixed, insensitive to the changes in the behaviour the policy drove.

It put a mathematical framework around the better known Goodhart’s law, which simply stated is: ‘When a measure becomes a target, it ceases to be a good measure’ 

Therefore, choosing measures is a task of vital importance. You have to adopt measures that calibrate the drivers of outcomes, not the outcomes themselves, or you risk getting a lot of something you do not want, or need.

As a young product manager, I worked for a business that had sales volumes as the driving KPI for the sales force. Not unusual, and pretty well balanced, as the marketing function set the prices and therefore had nominal control over gross margin. However, sales personnel had control over promotional expenditure, which was budgeted as a percentage of sales.

Towards the end of the financial year when volumes were behind budget, an additional incentive was put in place. If sales budgets were achieved, the annual sales and marketing conference would be moved from the usual haunt just down the road in a dingy hotel, to a resort in the Whitsundays, and partners were to be invited.

The sales force went all out, and in the last 2 months of the year significantly over-achieved the sales budget, and we all went to a terrific location and had a holiday. However, the holiday came to a shuddering halt as the sales for the first few months of the following year came in. The sales force had achieved volume targets by stacking the retailers warehouses with product in the last two months of the previous year, boosting booked sales revenue, but delaying the timing of promotional expenditure to the new year. There was never a chance of catching up and achieving either the volume or net profit budgets in the following year. However, we did have a great time at the ‘conference’ .

You will get what you measure, just make sure it is what you want.

 

The often fatal flaw of the Family business

Oct 3, 2019 | Governance, Management, Small business

Family businesses have many advantages over publicly owned entities, largely around the pressures that apply to investment decisions.  They can, and often are, made with timeframes that would be unacceptable to a publicly listed company.

They also often contain the seeds of their own destruction.

On top of all the usual human pressures that exist in every enterprise, ambition, envy, personal gain, and all the rest, you also have the dynamics of family, and often multiple families, overlaid on the more usual pressures.

The mixture can be toxic.

It takes considerable leadership skill to address these added pressures, usually driven by the sense of entitlement that comes from: ‘it is our business, therefore we can do what we like’.  

There is no easy fix I have ever seen, but recognising a problem, catching it early and creating an environment where merit, and not bloodlines is rewarded, is a good first step.

This statement assumes two things: that there is a performance management system that is unbiased towards anything other than merit, and that there is a cultural understanding that bloodlines come second to performance.

A very unusual combination in my experience that requires rare leadership qualities, and extended self -awareness.

I have trouble thinking of a more challenging situation than having to fire your child, for whom you have built and nurtured an enterprise, because they are not the right person for the role they covet. The downside is if you do not, the non family members who are the backbone of the place will leave very quickly, or at best, tread water while it suits them, adding little real value in the meantime.  

Often an antidote is to have an outside advisory board of some sort that acts as a sounding board, advisor, performance manager, and sometimes executioner.

 

Header photo credit: Amar Chauhan via Flikr.

3 words summarising the challenges of maximising productivity

Sep 25, 2019 | Leadership, Management

 

‘Rhythm’, ‘Flow’ and ‘Balance’.

These three simple words reflect the ideal state for a process, big or small, in any enterprise. That state where the process is optimised for both efficiency and productivity, which are very different beasts. I have seen highly optimised processes that are still way short of being  productive, simply because there has been too little time spent considering the most productive use of the range of resources consumed by the process.  For example, US car companies used to  be highly efficient at driving the assembly of a car through a production process, but the cars they produced were terrible.

Rhythm.

Everything happens in an orderly and predictable manner, the ebbs and flows of volume have a cadence to them that enables the appropriate level of resource to be planned and allocated. No surprises!

Flow

The product being produced, or the process being followed proceeds in an uninterrupted manner, without obstacles, and complications. Achieving ‘Flow’  should be a core objective of anyone charged with the responsibility of managing a complete process, or participating in any part of a process, which is all of us. In most cases creating flow is like fitting a 1,000 piece jigsaw puzzle together. Complex at the beginning, but when completed, the picture is obvious, with no irregularities.

Balance

There are always forces acting against both rhythm and flow, forces that tend to distort the process. Seeking to balance all these forces is a job of leadership, and when efficient processes are optimised, all these forces are kept in ‘Balance. It is a  bit like trying to balance a top heavy piece of wood on the palm of your hand, you have to keep all the forces acting on the wood in balance in order to keep it vertical.

When you need some assistance in herding all the cats involved in this crucial but often easily pushed aside exercise, let the experience I have gathered over 40 years help you.