Feb 8, 2021 | Leadership, Management
From time to time we all must deal with those difficult people, the ones who believe absolutely in something that is clearly nonsense. They just know they are right, and are hellbent on ensuring that everyone else knows it.
I have learnt to feel sorry for them, although it did take the best part of 45 years to reach that point, from one of anger all those years ago, evolving into contempt, then progressively dismissing them as nutjobs, then ignoring them.
Occasionally I still fail, as in the case with Liberal MP Craig Kelly, whose ignorance combines with insistence that black is actually white, makes my blood boil.
However, these days, I recognise that their certainty of an outcome blinds them to the facts that might lead to a different conclusion, they become so wedded to their own narrative that any contrary suggestion is dismissed as irrelevant or insignificant.
When you believe you know everything about a topic, how can you learn?
You simply stop listening. We believe we have all the relevant ‘facts’, our analysis of those ‘facts’ delivers a conclusion that becomes, in our own mind, self-evident and absolute.
However, when you are a rabbit that believes there are no foxes around, you are destined to be fox shit.
Failure to recognise the holes in our own thinking makes us blind to an alternative.
The alternative of course, is that occasionally, just occasionally, the apparent nutjob has a point, but it is so far out of the current accepted narrative that he/she is dismissed and in times gone past, punished for those views.
Such a person was Ignaz Semmelweis. He was a Hungarian doctor working in the Vienna General hospital in the mid 1800’s. Semmelweis proved the massive incidence of infection in the obstetrics ward was caused by the practises of doctors. Despite having masses of confirming data, and publishing several papers and a book, he was rejected by the medical community, so aggressively, he ended having a nervous breakdown and being committed by his colleagues to an asylum for the insane.
In this case however, I do not think Craig Kelly is any sort of Ignaz Semmelweis, just a nutjob who needs to be put somewhere quiet and ignored.
Jan 19, 2021 | Collaboration, Governance, Leadership
As we come to grips with remote working, we will also have to come to grips with the central challenge, of how do you create the sense of community and teamwork that requires face to face but is not as present in remote work.
More particularly, remote working groups that have a changing membership, often a rapidly changing membership.
Great sporting teams win because they have the right blend of talent to get the job done, then they practise and practice, and practice. What happens when the membership is not stable, when practice is not possible, simply because you cannot predict what it is that you need to be practising, and with whom.
Google has spent years and millions of dollars examining the characteristics that make groups successful. The starting point is that no Google employee is short of intelligence, otherwise, you simply do not work there, but some groups are extremely effective, and others are failures, when on paper, the group members appear remarkably similar.
They called it ‘Project Aristotle‘.
Google, if it has what we might call a core competence, it would be finding patterns in data. They have large data sets of the teams in their business, their makeup, demographically, ethnographically, education, experience, and so on, but they could find no correlation between all these variables, and the quality of the team output. It seemed almost random.
The problem was to identify how individual intelligence translated into group intelligence.
We seem to accept that teams that were working well are more productive, creative, and harmonious than those that do not, but we do not really recognise the drivers of those outcomes.
Eventually, an unexpected pattern emerged, that discriminated between high performing teams, and the others. The pattern had two characteristics of the interactions that occurred in the teams, that explained the performance differences.
Those behavioural patterns are:
Equality of conversational turn-taking.
When everyone in the team has the opportunity to speak, and is encouraged to take it, and the result is that team members hold the floor for roughly the same amount of time, the team works. It does not mean that everyone takes turns, it does mean that the culture and often unspoken norms of the group are that everyone is respected, and has value to be added to the conversation, and is therefore listened to equally.
Ostentatious listening.
Just speaking in roughly the same amount is not enough. Others in the group must be overtly and ostentatiously listening, taking in what is being said, and giving it the attention and thought it deserves. This particularly applies to the team leader.
Together, these two behavioural norms together create what risks becoming a cliché: ‘Psychological Safety’.
This is the willingness of team members to speak their mind, express opinions, and ideas, knowing that they will not be judged, that the group welcomes the views, even when they are against the ‘run of play’ or the expected. Psychological safety is the single greatest correlate with a group’s success. When team members have that safety, it unlocks their best ideas, their ability to collaborate meaningfully, and innovate creatively.
Contributing to the success of a team, on top of the two core drivers that deliver psychological safety, and contributing to them in meaningful ways, are 4 supporting behaviours.
- Team members get things done on time, and meet their obligations, in a manner that enables the team to perform its tasks to at least the standard they expect.
- Structure and clarity. Individual’s in the team have clear roles, plans and goals, and the decision-making processes the team uses are clear. When an individual’s goals and plans are aligned with those of the team, the impact is magnified.
- The work being done by the team is important to team members.
- Team members believe their work matters, and that it will create positive change.
Taking up the hard-won lessons from Google seems to make great sense to me.
How well do your processes to manage and leverage the intellectual capital, represented by your employees, work in the evolving working environments inspired by ‘The Bug?
Header credit: My thanks again to Scott Adams and his mate Dilbert.
Dec 19, 2020 | Leadership, Strategy
Rugby league is a ferocious sport, now gone well beyond a sport to be a profession, at least at the top levels. You can still play in the park, and enjoy the competition and physicality of it, but that is not what the top level is about.
It is a business, and the CEO’s are not those with the title of CEO of the clubs concerned, while they might have the power of financial veto, the real CEO’s are the coaches. They are the ones that shape the way the teams play on the day and are ultimately responsible for putting in the processes that can generate the results on the field over the weekend.
As such, what can businesses learn from the two most successful coaches of the last 20 years, and perhaps the two best coaches of all time.
They are playing in the big league, while most businesses are still playing the commercial equivalent of park footy.
Talent development & leverage
Both coaches seem to have the ability to see latent talent in young players and develop them into top level players over time. It is the ability to see the future in a youngster and apply the right mix of game skills and personal development, which leads to the individual being a part of a team, contributing to the whole in a truly meaningful way, delivering ‘leverage’ to the team that sets them apart.
However, it is also the ability to see the latent talent in a journeyman player and turn them into an ‘A’ player by bringing out the latent talent that is amazing in both these cases. Few businesses I have seen do much of a job at talent development and are poor at leveraging existing talent. More often the round peg that failed to fit into the square hole is dispensed with irrespective of the latent talent, rather than being helped to find that round hole. Talent wastage is rife in most businesses.
The talent development pipeline created at the Storm is awesome. Billy Slater was one of the genuinely great fullbacks, recruited as a youngster from country Queensland. When retirement was coming, there were moans about the hole his absence would create, and lo and behold, the hole never eventuated, simply because there was a replacement ready to step up, and has done so in a dazzling manner. Similarly, when Cooper Cronk left, and went to another club. How would the ‘spine’ of Melbourne work without not just Slater, but now also Cronk? No problem, the replacement is a wonderful player, fully capable of filling giant shoes, while Cronk brought a competitive edge to the new club that contributed enormously to them winning the premiership. Now Cameron Smith is on the verge of retiring, and the same moans are being heard. I am sure his replacement will be a wonderful player, blooded and coached into the winning systems of the club.
Coaching
Coaching is what coaches do, the headline task. Turning those talented youngsters into super athletes, but as importantly, turning the B players into A players.
Bellamy and Bennett both seem to be loved and respected by their charges, even when they have moved on to another club. There are numerous examples of talented players moving onto other clubs from under the wings of the two B’s, and shining because the habits and motivation instilled by the B’s. The development and honing of their talent is forever, not just in the context of the two teams directly coached by the B’s.
Most businesses spend way too little time, money and energy coaching their employees. They are treated as numbers, dispensable units of production, rather than people who generally want to, and are willing to be contributors when allowed and enabled to be.
Perhaps coaching is the highest form of leadership?
Recruiting
I have seen it written many times that the primary responsibility of a manager is to replace themselves with someone who will do the job better than them. The great leaders always have a full bench of talented individuals being readied to move up the ladder, while at the same time, looking outside to find the talented individuals to add to the bench. The ‘B’s’ spend a lot of time watching for the talent out there on the fringes, and when they see it, they find a way to move them into the system. This goes with the time and energy spend in talent development and coaching, it provides the raw material that over time will develop.
Almost all the recruiting I have seen in 45 years of commercial life is around filling a seat when it suddenly becomes vacant for any number of reasons, and then it is usually the best that turns up on the day that gets the seat. The “B’s’ would never recruit this way. They will each have a list of those that they think might, one day, fit into their system, and they put in the effort to get to know and understand the talent well before there is any hint of recruiting.
Processes
Every team has processes on the field, the plays they run against the opposition. Sometimes they work, often they do not, but what is obvious every time you see a play being run, is that it has been planned and practised until it is second nature. The ‘B’s’ must have a book of plays from which they pick and choose depending on the strengths and weaknesses of the opposition they will be facing. There will be some standard plays, a set of processes that they use all the time, as well as the specialised couple that they see as being particularly competitive against their current opposition.
These processes are written down, refined, and used as the basis of continuous improvement. They are not computer programs that tell you what to do, they are processes in which the players are engaged in the development, and ultimately responsible for the implementation.
Few businesses have their equivalent. As a consultant the easiest way to make an early impact is often to create and implement a few basic processes that rectify what are usually basic flaws in operating procedures. Documenting operating procedures is the first step in standardising, and then improving the drivers of success.
Practice
Practise makes perfect is a cliché taken seriously by all sporting teams, I suspect it is a religion for the ‘B’s’. Spartan mythology gave us the cliché: ‘Sweat more in training, Bleed less in war’. Make no mistake, a rugby league (and union) field is war, so the more sweat in training the less blood on game day.
Businesses do not practise enough. Sales is the prime example. Salespeople are often subjected to the most training in a business yet getting them to role play and ‘practise’ their sales pitches and processes has proved to be hard. They might do it once or twice in a 2-day training session with the other salespeople, but it does not ever in my experience become a routine, a way of getting ready and continually improving their performance.
Contextualised creativity
The best players are always creative, they seem to be able to see more than anyone else, they see the gaps opening before they open, and they always seem to have time others do not. To quote ice hockey great Wayne Gretsky ‘I skate to where the puck will be, not where it is now’.
In a game dominated by process and physical power on the back of great athletic skills, the teams that have in them the ability to see and exploit an opening before it opens, requires not only a creative individual, but a team that operates in such a manner that they can adjust on the fly, almost without speaking. It is the sporting equivalent of improv jazz, where each player is a master of their own instrument, while being able to improvise within the context of the piece that is being played by the group.
Team Execution & individual Accountability
The foundation of execution is the ability of the players to execute the plays they have practised and practised under the added pressure of game day. At the same time, they must be able to anticipate and smother the offensive plays being run at them by the opposition.
Core to excellence in execution is the accountability of individuals to play their part in the execution of the plays.
On one hand, the team wins or loses, on the other, individuals in successful teams are held accountable for their part of the execution, and the parts and performance of each individual player is transparent to the whole team.
In the great commercial teams, I have seen that this circular motion of team performance and individual accountability is the glue that holds together the ability to perform under pressure and deliver superior results.
Resilience
No success comes without its fair share of knocks along the way. It is the way the teams and individuals pick themselves up from the knocks that show the true nature of the competitive spirit.
When Melbourne was well beaten by lowly rated St George in the last round of the premiership, the pundits wrote them off as able to be the winner of the 2020 premiership. Favouritism went to Penrith, who had played an unbeaten run of 16 straight games in the lead up to the grand final. Melbourne came back to win the final handsomely. Resilience plus!
Rarely do I see resilience built into the operating processes of businesses. Almost always they hide after a setback, failing to learn from the problem, and then able to adjust their approach and go again.
Discipline
Discipline comes from focus of the individual and the team, mutual accountability, and the determination to finish. Whether this be one play in a range of plays, or a whole season of games, the discipline holds. Everyone knows their individual role, and the contribution it makes to the whole team, so it is the combination of both that delivers the outcome.
The level of discipline shown by the teams under the coaching of the ‘B’s’ is greater than that of their opposition, both on and off the field, in every aspect of their performance.
Scorekeeping
In the absence of a score, how do you know who won? Every competition relies on keeping score, not just as a means of assisting team and individual accountability, but to also deliver a sense of shared purpose.
While it is true that not everything that matters can be easily measured, it is also true that over time, the drivers of superior performance become obvious, and it is possible to generate measures of these leading indicators of performance, and tracking trends over time is enlightening.
Again, I am sure the ‘B’s’ track game scores (indeed, when Melbourne loses, the frustration and passion of Bellamy is often on show) as well as a range of leading indicators of future performance. Why else would the players be wearing distance trackers during practice. And practises be videoed and played and replayed?
Commercial scorekeeping is generally piss-poor. The score that generally counts most is the bottom right corner of the P&L. Unfortunately for many, this number is only an outcome of a whole range of factors, that if left unscored, will not deliver the profit numbers.
This has been the last post of a year best forgotten. Having said that, the lessons from the year, if heeded will lead to a better future than would otherwise have been the case. We Aussies have demonstrated a depth of resilience that might surprise some. Long may it continue.
Have a safe and merry Christmas, thanks to those who have read, shared, and commented on my rantings over the year, and I will ‘see’ you in 2021.
Dec 14, 2020 | Leadership, Management
Every business starts small. The biggest on the planet all started somewhere, in a garage, dorm room, lab, somewhere between the ears of the entrepreneur.
Most fail, or at best deliver a return that would have been dwarfed by the interest on the same investment in a bank account.
Some however, do succeed.
We all see the ones that do, they are shoved down our throats all the time as the heroes, the ones who made it, and we are asked the question: if they can, why can’t you?
There seems to me to be a consistent sequence of growth, a sequence that hold true across all sorts of products and services, geographies, technologies, and circumstances.
Cheering.
This is the first stage, it seems to be all enthusiasm, cheering from the sidelines, jumping up and down, wishing for stuff to happen. What it is about when you are in the midst of it all is hard grind, chaos, and a shortage of cash.
At the beginning, you work your arse off, seemingly 24/7, with no letup. Everything that gets done depends on you doing it. It is messy, and chaotic, as pressures come from every direction, your attention is demanded by each, which is why the 24/7, and still there is little forward progress. Then there is cash. As you start, nothing is more important that cash. More start-ups go broke for lack of cash than every other reason combined. Managing your cash is simply the most important thing you must do, while ensuring those first customers love you..
Planning & doing.
Assuming you survive the cheering stage, you will have come to the point where you have a little more head time to be used considering ‘what next’. You probably have a small number of employees, and perhaps some outsourced services, like accounting and IT.
Answering the ‘what next’ question will be eating at your guts, as for sure you do not want to continue as you have been. Your kids are growing up without you, your family seem to be strangers, you have not had a weekend with your mates for ages. So, you look forward to a different future, and stumble into some planning. It is never as easy as filling in some generic template, of which there are plenty making alluring promises, it is more about the graft of figuring out how to accumulate and allocate the resources necessary to grow. While the game is still about cash, it has also become about profit, what is left for reinvestment at the end of the month, quarter, and year.
You plan your products and services, the foundation stuff you need to get right, like the legal and regulatory things that must be done. You seek to understand the financial and strategic pressures that are present, and settle for the moment on a business model, how you will turn your chaos into sustainable profitability.
However, a plan, no matter how good it may be at telling the future, envisioning new products, markets, and customers, needs one further ingredient. It needs to be implemented. Plans that do not get implemented are usually called dreams. Yours will also recognise the reality of the muttering of generals throughput the ages that while planning is essential, nothing ever goes exactly to plan, so you must be ready to be agile tactically, while consistent strategically.
Building & growing.
The essential ingredients to building and growing an enterprise, on top of the financial resources that enable that growth are twofold. You need people to do the work, and you need processes for them to follow, and over time, optimise.
The task of being the entrepreneur has changed from one of management, to one of leadership. You are no longer engaged in tactical activity, that is being done by others in a manner that is transparent to overview, and with KPI’s based on outcomes. The task now is about the people doing the work, from the daily tactical stuff to the functional management. Your role is to lead all these people, and to ensure that the processes being deployed deliver on the plan. It is all about the productivity of resources deployed, people and financial, and that is delivered via the processes that evolve.
Anyone who thinks this is easy has never done it.
Anyone who stands on the sidelines and cheers for you might be a cheerleader, supporter, and beneficiary, but they are not a coach. A coach delivers the models and means by which the success is generated, which is much more than cheering, as it involves getting dirty from time to time, being always challenging, and ensuring you are looking beyond the tactical that threatens to consume you.
At each point in this growth pattern, there is a single question that you can ask that will give you an answer to the question of growth potential contained in any tactical decision:
‘Does this scale?’
Many small business owners do not ask this question, so end up selling their time for money: and there is only a limited time in any day. Therefore, if you are about to invest in tactical activity of any type, ask that simple question. If the answer is yes, fine. If it is no, think again.
When you are looking for a coach with the scars to prove experience, browse through the posts on this StrategyAudit site, and then you might want to give me a call.
Nov 23, 2020 | Leadership, Strategy
It is November, typically the beginning of the planning cycle for budget year 21/22.
First point of call in a formal review is generally ‘How did we perform so far this year against the plan we set ourselves back in November 2018?
Few could reasonably mark themselves as a success. The impact of a pandemic of any type, let alone Covid, was not even mentioned. Despite the warnings from SARS, MARS, Ebola, and from individuals such as Bill Gates, no planning I have seen or even heard of made mention of the possibility of a disruption such as that we have seen, and continue to see. The gap of 18 months between the strategic planning and review/adjust marker posts is terminal against an opposition that evolves and pivots in weeks.
So, to the core of the strategic challenge.
What will the rest of 20/21 look like, and what are the drivers present that will persist?
How do we allocate resources to the longer term?
This will be strategic planning in an entirely new environment, and the only consolation is that all your competitors are faced with the same degree of uncertainty.
Perhaps it is the case where the least worst gets the cake?
It seems to me that there is massive value in making the distinction between strategic planning, and strategic implementation.
A lot of planning goes on, but often the implementation pays only lip service, being driven by tactical ‘necessity’. As Prussian Field Marshall Helmuth von Moltke noted and many have since paraphrased: ‘No plan of operations extends with any certainty beyond first contact with the main hostile force’. This certainly will have been the case over the last 12 months, but that does not remove the importance of the planning part.
Covid has been the catalyst of all sorts of changes, but when you pull them apart, all the things that have come to pass were there previously, lingering on the edges. Covid has just been the catalyst to massively accelerate the growth and impact of those pre-existing trends from out on the edges, from where change almost always emerges.
If this is true, the strategic planning processes are still valid, you still have to make those strategic choices, which markets, which products, which customers, which technologies, and so on, but in the implementation, you no longer have the luxury of time, it is the quick and the dead.
It seems to me that ‘Strategic planning’ should provide a framework within which to make tactical decisions that reflect the intent of the framework. They should be made ‘rolling,’ so as to absorb the learning from the previous cycle, and be able to accommodate changes as they emerge. A strategic OODA loop.
This is easier said than done, but if it was easy, everyone would be doing it.
It also seems to me that the siloed top down decision making and the cultures and processes that support it should no longer have a place at the table. Unfortunately for most existing organisations, they combine to assure that agility and creativity in response to new information is removed from the process.
The ability to deal dynamically with new information and changed circumstances is the new competitive advantage, but culturally it is not common.
We need to be able to give those in direct contact with markets and trends both head time to absorb the things they see, and the power to act on them without a long bureaucratic filtering process of approval. They also need the power to allocate resources to those ‘experiments’ within pre-agreed parameters, and have real time feedback from those experiments, seen at the top level so as to be able to influence the strategic cycles directly.
The feedstock of this cultural change is more than data, with which we have become obsessed. It is the ‘soft’ stuff, human experience and judgement that becomes vital to the outcomes, as it is only by humans that judgements can be made. Algorithms are great at collecting data, and telling us what happened, but lousy at projecting, this requires human judgement, intuition, and experience.
It is this judgement that synthesises the data into something different to an extrapolation, absorbs the lessons of the past to apply to nascent and emerging trends.
In these differences lies the secret of strategic implementation.
Call me now for a strategic reality check.
Header cartoon courtesy Hugh McLeod at www.gapingvoid.com
Nov 20, 2020 | Leadership, Strategy
Warren Buffet is renowned as perhaps the greatest investor of our time. To be noted as a mentor, as was Philip Fisher, is indeed being stuck on a pedestal.
Fisher published quite a bit, his seminal work being ‘Common stocks and uncommon profits’ first published in 1958.
In it he outlined 8 principals by which he invested. Buffet credits these 8 principals as being fundamental to his success, along with the quantitative analysis he learnt from Benjamin Graham. These two men, along with Charlie Munger, his intellectual side-kick for 60 years, are credited by Buffet as the foundation of his success.
The Fisher principles in summarised form are:
- Go and see.
- Depth of R&D leads to growth.
- Sales and merchandising are make and break.
- Being a low cost producer, and working to stay there leads to higher margins.
- Generate your finance internally.
- Have only great people. The depth and quality of management, represented by integrity, transparency, willingness to learn from mistakes, and who build working relationships with stakeholders are essential.
- ‘Scuttlebutt’ is a serious business, and should be collected by talking to as many knowledgeable people as possible who may be familiar with any company you were learning about, and analysed in depth.
Like all great advice, this list applies equally today as it did 50 years ago, and the application is much wider than just investing. If you were setting out to construct the framework for the business you wanted to create, that drove the culture you were seeking, then this list would be a great foundation.
I particularly like the dedication in the most recent edition of Fishers book, which reads “This book is dedicated to all investors, large and small, who do NOT adhere to the philosophy “I have already made up my mind, don’t confuse me with facts’. This admonition seems particularly pertinent in these times of an overwhelming volume of opinion posing as fact, being blasted at us, demanding our attention.
