Reality, choices and alignment.

It’s all I want in the companies I work for. Yet I see very little of it.  To me, all the management and strategy jargon out there just complicates things.

Reality.

Reality is important because it frames your worldview. Time and time again I see senior people ignore reality. You want some examples? RIM:” no seismic change” required? Hello, dude you are screwed!! ‘manage decline”, what kind of obscene statement is that? I mean first up, you are basically stating it’s ok to loose, worse that you have some magic trump card that allows you to control market shifts.  This is poison because your staff know its total rubbish and it sets people up for failure. . . . trust me I’ve seen people try to do this for years and I can attest to the fact that any ‘management’ of decline only happens in the minds of strategists and accountant. The rest is luck.

Choice.

People think they make choices every day, but the reality is they do it without fully considering the true impacts.  Take global warming, its is kind of hard to ignore the fact base that it is happening. At a personal level i don’t think people understand what they do to contribute or change this, they haven’t really had the choices explained to them….

Combustion of one US gallon of gasoline produces about 19.4 pounds (8.8 kg) of carbon dioxide (converts to 2.33 kg/litre), a greenhouse gas.[4][5]

Did you know that? that is a lot of C0!!!. How about wording the choices this way.. “you can keep driving your car and contributing to the pollution of the petri dish we call home, or you can find alternate transport, you choose”

Cigarette smoking – “you can keep smoking cigarettes, but you know that it causes all sorts of bad stuff to happen and if you get sick because of it, there won’t be any government or private health insurance to support you”

Business – man, so many examples ( dilbert lives on this stuff)

“We can’t decide what we are going to do” (which is a form of non-choice),  the impact of this is there is no guiding principles to make good choices about so companies will attempt to deliver everything… which means nothing gets done and everyone is unhappy

“we need to change, become more agile and cost effective”, but we will do this with the existing processes and cost base…. without a plan to address process and cultural overheads, this just won’t happen

“…most often the very skills that propel an organization to succeed in sustaining circumstances systematically bungle the best ideas for disruptive growth. An organization’s capabilities become its disabilities when disruption is afoot.” – Clayton Christensen, The Innovator’s Solution

“We need to be more innovative”, so you either choose to learn about / invest in innovation, sponsor, support and nurture new projects …or don’t.  One of these approaches has much more chance of success than the other

“you can launch that new thing, but you need to avoid canabalisation”   you just choose to waste your time and money. That new thing ain’t going anywhere. Good companies (like Apple) acknowledge canabalisation, then don’t get stopped by it because its actually just part product lifecyle

Another choice “lets cut costs but culling headcount” but we will do it before / without fixing the underlying systems and processes, all this means is that a smaller number of people are going to end up doing the same amount of work….  With the obvious results in output, quality and staff satisfaction…

Finally a segway into alignment “we want focus, here are five separate targets. “

Alignment .

Getting the company in motion, by ensuring that everyone is working in the same direction…. Sound so simple, but so often it never happens.

Multiple targets – a recipe for disaster… classics include hit your revenue and EBIT targets… or how about maintain share and price? Sound familiar?

What about different parts of the business being aligned? How many of you out there have given operations a cost reduction target while simultaneously giving product or sales an uplift? This causes conflict at best, it also hamstrings your growth. Some managers call this ‘healthy tension”… which is management school bullocks for misalignment

Finally my personal favourite piece of target tripe… manage decline in legacy business (ie maintain the status quo as best are you can) while simultaneously driving radical simplification…. That’s like saying go to war but don’t use guns … what are you supposed to do? Batchslap them into submission?  Have them laugh themselves to death by showing them your impossible targets?

Combine reality, true choice and alignment and you get simplicity and organisational alignment. Trust me (most) people have decent BS meters. They will naturally see if a plan, driver or goal is aligned with what they are targeted with or are doing. To quote Jason Jennings “in great companies everyone knows the strategy, and everyone thinks and acts like an owner”

The thing that makes great companies great is…

I’ve spent quite some considerable amount of time investigating what makes great companies great. Readers will know that i’ve read a lot of Clayton Christensen, but i’ve also interviewed CEO’s and been fortunate enough to hear some great speakers, or been past great tit-bits via various social media.

Here are the key takeouts that appear to make great companies

  1. They have great leaders, people who are prepared to make decisions even hard ones, and act
  2. They have a cause, purpose or set of common belief – wheather that is competitive, aspirational or humanitarian
  3. They take risks – the culture supports risk taking (ie doesn’t punish it at the very least), and these companies are prepared to do things that make the sharemarket shudder (let go of legacy money streams or beliefs)
  4. Great companies get the right people on the job and give them the autonomy and support to get the job done – and are prepared to loose today’s key personnell in order to get tomorrow’s business
  5. To get results you need to free up resources – expecting people who have day jobs and targets to hit to be the agents of change is insane…
  6. Organisations are conservative – they unknowingly become uniformaty machines systematically erraditcating anything that doesn’t fit with the entrenched model or way of doing things. Middle managers become experts at the ‘considered no’ to new ideas, and its for this reason organisations can’t grow and you hit stall points. Fear typically beats creativity, fear of career limiting moves, punishment or even of fame.
  7. When it comes to innovation, the more perfect your knowledge, the less attractive the innovation is. If you’re feeling comfortable with an idea, then someone’s already doing it…
  8. If you are serious about change, you need to invest in it.
  9. As scary as a seperate spin out is to the CEO, these are about the only proven way to build a new business model.

And now for a collection of my own thoughts

  1. Companies love a crisis – nothing will happen until it absolutely must – but by then its too late so..
  2. Business is about momentum – its much easier to make small changes in trajectory than to pull a business out of a nose dive….
  3. What seems like a big scary decision now, will look small and logical when you look back at it. So get on with it
  4. In doing this, remember that the people that go you into the current situation, aren’t the ones that will get you out – turkey’s don’t vote for Christmas and neither will they like you telling them that their time has past…
  5. If you want to do something new, get someone in who has a history of doing that new thing – whether thats dealing with decline, new product growth or product launch…. assuming your capable people can do it is wrong
  6. Often doing nothing is the absolutely worst case…even going the wrong direction is better because at least you are in motion

And finally, the only thing that really makes a difference is execution. You can collect as much information as you like, get all your best thinkers writing documents till the cows come home… the reality is that the only thing that really matters is executing better ….

The best companies in the world do this better than anyone else