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 14, 2021 | Change, Management
It is new year, all those resolutions going to waste!
It seemed a timely spot to suggest how we can change outcomes, as it is those we want to change, we just call them habits reflecting the action.
Let’s pick one of the most common: ‘I will stop smoking’.
The usual outcome is that we fail to stop smoking, despite wanting to, resolving, and trying often. It is expensive, and not good for us, but it is a ‘habit’ that is extremely hard to break.
I know, I successfully stopped smoking, for a day or two, at least monthly for several years. Then I stopped, successfully, no drugs, not hypnotherapy, no doctors’ orders, now almost 40 years ago, when a packet of Dunhill 20 was still well under a dollar a pack.
What I realised so long ago, was that there were triggers that set up the urge to light up. The phone ringing at work, after a meeting with my then boss, having a beer (that could happen any time) and several others. My strategy was to substitute the habit of lighting up with something else, a substitute habit that satisfied and then replaced the craving for a fag.
Once I had figured out the substitute, and ensured the new routine was in place, it was actually pretty easy after the first few days.
The challenge is to find that new routine that can replace the nasty habit, and build it to the point where it effectively substitutes for the habit you want to stop. Obviously, if you want to lose weight, stopping eating chocolate cake by substituting it for ice cream is not going to do you much good.
The reward of the new routine has to be real, and related to the cue.
Part of the reward I gave myself was semantic. Sounds silly, but it helped.
I never said I had given up smoking, which implies a cost of some sort. Instead, I told myself, and others, that I had taken up non-smoking, which implies a reward, and attracted the support of those around me for the short time it was necessary. Quickly, I became one of those boring former smokers who pontificated about how easy it had been to become a non-smoker.
It is a simple psychological process.
Identify the cue, substitute the nasty habit with a ‘reward’, create a new routine that works to the same cue.
The simple cue substitution process works, whatever ingrained behaviour you are trying to change, personally, or in a group in a commercial context.
Don’t be afraid of it, embrace it.
Good luck with that resolution!!
Thanks again to Scott Adams and Dilbert for the header cartoon
Jan 11, 2021 | Governance, Management, Strategy
It is January, and looming in many organisations is the annual, calendar driven budgeting exercise.
In more normal times, the strategic planning update would have been done in September or October last year, but that went out the window, along with the comparisons of performance to budget that are usually the basis for an extrapolative budgeting process.
Never has there been a better time to revisit the whole process, as it is clearly no longer fit for purpose.
There are better ways.
Top-down mandated budgets designed to give senior management the appearance of control and foresight have been on the slippery slide for some time. The ‘Bug’ should have been the terminal injection of reality.
Constant and unforecastable crisis does not lend itself to a process that purports to predict the future 18 months to 5 years out.
Given that background, how should management be thinking about the planning process?
My advice is that the process should be one of rolling planning, that accommodates information as it emerges, and rolls it into the action programs, while retaining the necessary strategic consistency and functional alignment.
What constitutes strategic success?
Strategic success is not about the money, profits, or shareholder dividends, although sometimes you might wonder. Strategic success is a function of the choices made, the distribution channels opened, customer lifetime value and share of wallet, the innovation pipeline, and capability development that will enable commercial sustainability. These are all things, amongst many others, that are enabled by the tactical choices being made. While the costs and returns are important considerations in these choices, they are just the simplest but often misleadingly one-dimensional means by which they are measured.
How does this impact the planning process?
Planning is vital, as the absence of a clear destination means any road can be taken. However, the process must be way more agile than has been the norm, while not losing sight of the objective. This requires a clearly articulated and understood strategic framework within which the ongoing tactical decisions can be made. At every point of choice, the question should be asked:
‘Does this choice add to the achievement of the strategy?
Strategic priorities can be broken down into operational and tactical choices across and within functional responsibilities. These choices can then be reviewed and updated regularly as information is received and absorbed.
The ideal outcome is that there is regular communication, and by regular, I mean daily, weekly, monthly, and so on, where information is absorbed into the decision processes and used to adjust on the run. Rolling planning at every level can be ‘rolled up’ (pardon the pun) into the longer-term processes ensuring strategic consistency and alignment.
In effect you are matching the tempo and type of decision making to the level most appropriate for that decision to be taken, with those in whatever ‘front line’ is engaged, taking the responsibility and accountability for the decision.
I refer to it as ‘Nested Planning’.
Each stage builds on the former, becoming increasingly less tactical but more strategic in its nature. The most visible metaphor is the Russian wooden dolls that progressively fit inside each other.
Abandon the immoveable budget that becomes set in stone, and replace it with rolling forecasts that track the progress of the resource allocation choices at every level, towards the strategic outcome agreed.
Header credit: ‘mountaineer’ via Flikr.
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 4, 2020 | Communication, Management
There is a lot of useful, standard advice about how to ensure meetings are productive. Have an agenda, a time limit, ensure only those who can contribute to the discussion attend, ensure there is agreement about what next, ensure everyone has the opportunity to speak, and so on. There is one more structural item not usually noted, that I have found to work well.
1/3, 1/3, 1/3.
The agenda is structured into thirds, as is the time allocated.
The first third is addressing the past. You cannot change it, but you must understand it, and absorb any lessons. This part of most discussions is often where the time is consumed, leaving inadequate time for the more important discussions about what next.
The second third is discussion about what is immediately in front of you. Depending on the meeting, this may be a day, week, month, and so on. There are decisions to be taken that impact the immediate future, take them.
The third is a discussion on the longer term items that will impact the group in the meeting. Depending again on the level of the meeting, this can be anything from how to fill a hole in the production team when Jim takes long service leave, to discussion of the potential risks of a long term threat to the enterprise.
The format works at all levels, offering a framework within which to manage the meetings, from a 10 minute stand-up at the beginning of the shift, to board meetings, and the three day strategy session held annually.
It is the responsibility of the meeting chairperson to manage the time and agenda coverage, but the general recognition that the 1/3 structure will be used, just makes that job a bit smoother.
Once again, with thanks to Scott Adams, I have called on the wisdom of Dilbert for the header.
Oct 30, 2020 | Leadership, Management
Focus across the activities of a business is essential.
It means everyone is on the same page, and there are only the key performance drivers that are there, all else has been, or is being eliminated until the value is greater than the cost. This sense of purpose delivered by consistent and clear focus ensures that everything fits together.
It also means that the leader has as their primary task, communication. That communication is cascaded through the organisation, enabling the focus on what is important, today, tomorrow and into the future, with a singular focus.
Every person running an SME I have ever seen struggles with focus. They are pulled in multiple directions, simply because as an SME, there is no-one else to get stuff done, and in addition, many running SME’s are doing so because the sense of ‘ownership’ is strong, and they do not want to let it go.
To change this instinctive behaviour is not easy, requiring 3 simple to say steps, which are always very hard to implement.
- Precise definition of the goals. The temptation is to be general, make nice sounding goals that generate a nice warm feeling, without being specific. They are comfortable. Goals to be compelling drivers of behaviour and activity must be specific. The original and still the best framework is: ‘SMART’ goals. Specific, Measurable, Accountable, Reasonable, and Time-bound. When you get that right, the rest can follow, as it is clear if an activity is of value by asking the simple question: ‘Does this add to the progress of X?
- Disallow Procrastination. It is easy to put off a decision, allocation of resource, choice between options, by the very reasonable tactic of wanting more precise information with which to make the best possible decision. Given decisions about resource allocations are always made in the absence of complete information, this hesitation often seems reasonable. However, it inhibits the speed with which decisions are made, implemented, and either reversed, when they prove to be sub optimal, or double downed on when they prove to be good. Speed is increasingly the measure by which successful enterprises measure themselves. Elsewhere I have discussed the OODA loop as a tool to encourage speed and the attendant agility that are so essential to success. Do not allow yourself to procrastinate. As George Patton is reported to have said: ‘A good plan, violently executed now, is better than a perfect plan next week’
- Do the hard work. There is always easy work to be done, that takes the place of the hard work necessary to achieve the goals. Leaving the easy work and attacking the hard stuff is like contemplating the choices for a lovely spring afternoon. Going for lunch at the local pub overlooking the harbour or getting down and dirty in the factory to address something that may emerge as a problem next week. Do the hard work first, and then go to lunch if there is time left in the day.
An experienced and neutral party offers significant value as a sounding board, idea bank, and advisor. Find someone who has been there before, learned from the experience, that you trust, and reap the rewards.
