Strategy requires naming your organization’s elephants

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You know there’s an elephant in the room. You don’t have a strategic plan until you’ve been unreasonable enough to name it.

Geoff Wilson

Imagine a corporation’s strategic plan that has all the check-the-box elements required of it. It has a market definition, a strong fact-based trend analysis, a good view of where the business competes and against whom, a nice vision for the future, and even a neatly tailored set of strategic actions to get there.

The plan leverages all the disruptive, innovative, differentiated, mindful, action-oriented, blue-ocean, globalized, core-competence-on-steroids buzzwords and frameworks that the executives and their underlings could find.

It’s beautiful. The board eats it up. And … it’s entirely incomplete and insufficient, to the point of being dangerous. It will not only be in the dustbin in a matter of a year or so (in some cases right after the board meeting), but it will also become a subtle punchline that denigrates the notion of strategic planning for those who are its victims.

OK, that’s the scenario. If you’re an executive of any significant seasoning, you’ve seen this movie before. Let’s look at why this happens.

Why strategy is all too often left incomplete

Strategy of any type—from checkers to chess and football to financial engineering—requires a brutal assessment of the problem at hand. That problem may be definable in broad terms like “growth,” “profitability,” and “market share,” but I doubt it.

The strategic problem is, more often, just a tad more subtle. It revolves around specific, granular realities in the business and competitive landscape. Often, the realities are directly known—even quantified—but they may not be discussed.

To be sure, some executive teams surface problems easily. The problem may look like a cost disadvantage, an aging workforce, a competitor’s new product, slowing salesforce productivity, or any number of other specific issues that when placed in the blinding flame of the corporation’s or business unit’s tidy grand strategy will extinguish it. These teams, typically through lots of practice, talk plainly. They spot the elephant in the room, and they name it.

Other executive teams like to nurture their elephants. They see issues like new-program and M&A failures as things to punish soundly in the hierarchy while excluding from high-level strategic discussions. They find scapegoats at a moment’s notice (and even sometimes name their scapegoats before things turn bad). They very often know there’s a problem, but they lack the courage (or, perhaps more often, have too many competing incentives) to name the elephant. The elephant goes on living, breathing, and sucking the life out of the company’s strategy with its prodigious trunk.

That’s why strategies are incomplete. In the midst of tidy stories of leverage, innovation, and creative competition is an elephant sucking the life out of performance and sustainability. It’s the elephant without a name.

So, what to do? 

Let me put this simply: Name your elephants. Get help if possible.

Ideally, you identify them with names and numbers. Most business problems can be stated in quantitative terms. Think you have a capital-allocation issue? Check whether your return on invested capital is too low (or too high!). Think you have a salesforce issue? Selling opportunities per rep can lead you to the answer. Worried about an aging workforce? The numbers don’t lie. Competition eating your lunch? Look at the numbers for market share or Net Promoter Score to see what the market says.

I’m being simple here because naming your elephants doesn’t require a full-blown study.

But there’s a catch: Senior management must be open to discussing elephants. If naming elephants runs counter to incentive plans or egos, you’re likely pushing the proverbial rope up a hill. Motivated board members sometimes fail to name elephants when faced with management who won’t play along. And if that’s the case, you can imagine what happens in the same circumstances to people lower in the hierarchy.

A practical view of how to do it

In our work at Wilson Growth Partners, we focus intensely on establishing fact-based views of our clients’ strategic elephants. It’s our goal to name the elephants alongside management in order to build a complete view of corporate and business-unit strategy. One method I’m fond of is working with senior leaders to establish expectations for performance alongside capabilities required, and forcing (yes, forcing) a candid discussion on the gaps in both. Many elephants reside in those gaps.

Elephant hunting has to be done deliberately and early in the process. And even in the best-resourced organizations, it’s the one action that often can’t be done by internal resources in a strategic-planning process. An independent, objective advisor can name elephants that management and boards simply can’t. Outsiders can be just unreasonable enough to bring up the hard stuff (as they should).

Now it’s your turn: What examples of destructive elephants have you seen? How have you seen teams name their elephants (or not)?

How to keep culture from crushing progress

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Big ideas aren’t enough to change things. You need powerful sponsorship.

This anecdote has played out more times than reruns of the original “Star Trek” series, so bear with me as I set it up.

The situation

Geoff Wilson

A highly motivated, energetic, experienced new hire is brought into the organization as an agent of change by the business unit’s president. The new hire is brought in because she thinks differently and has rich and relevant experience in organizations that look the way her new organization’s president and leadership team say they want the business unit to look over the long term. She is the poster child for effective organizational change leadership in appearance, word, and deed.

The new hire does what all highly motivated, experienced hires do: She gets to work. Carrying the president’s imprimatur by virtue of being hired, she starts propagating new ways of doing things—perhaps on processes like project management or in performance areas such as pricing or cost efficiency. She’s driven. She’s smart. She’s organized. She’s logical. She’s practical. She is, quite possibly, right.

The president of the company, sensing the strong glow of a great hire, lets her “do her thing” without guiding or intervening. After all, that’s what great leaders do: They let great people go “do their thing.” Right?

The organization’s leaders quickly sense a world of pain coming from changes to the ways things have always been done. The changes aren’t necessarily bad—just different.

Fast forward to a year later. Our motivated change agent is watching the clock. She’s waiting for 5:48 p.m. every day (that’s just late enough to not signal that she’s thrown in the towel). Her great ideas sit on white boards and in documents across the organization. But progress has been slow. She’s figured out that the organization really didn’t want all of her resume—just a few parts. Her job is easy. Her life is hard.

The leadership team, having figured out that she had no power in the first place, decided that the change agent’s recommendations, while smart, were too painful for them to implement. They have marginalized her through passive and deliberate pseudo-compliance and back-channel opting out. When one functional leader delays participation with good reason, the rest simply follow suit.

The president has entertained every grievance. By making backroom agreements on who needs to comply and who doesn’t, he has undermined the change agent—unintentionally, but still.

The organization likes her. But, hey, “Those great ideas could never work here.” And besides, the president sure didn’t seem to mind that key leaders opted out.

The president wonders why there hasn’t been more traction on his new hire’s ideas, but in reality, he just likes the fact that the business unit is performing well this year and that everyone will achieve nice bonuses.

The change agent polishes up her resume.

When our once-motivated, now-crushed change agent leaves for greener pastures, the organization gives itself a self-righteous pat on the back. See, they were right all along.

The change agent and the president (if he is a person of vision and integrity) wonder what happened.

Here’s what happened

First, the president quickly moved from a position of obvious sponsorship (he hired the change agent, after all) to a role of spectatorship. He removed the most important tool in his change agent’s toolkit: the lever of executive sponsorship.

Second, the change agent—armed with the confidence that her ideas would work and work well—fell into the trap of idealistic pursuit vs. practical and pragmatic progress.

Both have ignored the practical realities of power—call it influence, pull, or realpolitik. They misjudged the power of an organization’s culture to reject even the best ideas in favor of the status quo. They let the organization and its culture crush a valuable addition to its midst.

Don’t kid yourself: Culture is heavy. The weight of any organization’s culture will crush any change agent.

So what?

There’s no such thing as a “fire and forget” change agent. The agent—whether in the form of an initiative team or a seemingly heroic individual like our anecdotal new hire above—must have real power.

In any change program or worthwhile process, there comes a point in the organization’s journey where the broad population realizes that change is hard. They have an “Oh, shit” moment. At that moment, there must be enough momentum and felt need (or other sources of power) to move the change forward. Otherwise, change won’t happen.

In turnarounds, the momentum and felt need is easy. Either we perform or we’re gone. The change agent can drive change with that implication alone.

In improvement situations, the reality is far more nuanced. Going from good to better is hard. Really. How often do you see people who are in great shape make a New Year’s resolution to get in better shape? Not often. They make choices that diversify their focus vs. intensifying it. They want to spend more time with their kids, take up art, or shoot for that promotion at work. Their health is secondary because, well, they already have health.

That’s the problem with change in organizations performing “OK” or, especially, performing great but in an unhealthy manner (a diversified business with a few bright spots that carry the portfolio comes to mind). The organization—convinced it’s “doing alright”—sees the change as an annoyance. This is especially true in the absence of a transparent agenda. And that’s where power comes in.

Executive sponsors and change agents have to agree on the source of power that will ensure the change. And they must follow through on it!

The agenda must be explicit and have teeth. The change agent has to be able to walk into any room with the full blessing of power, and with a ready set of implications for non-participants and opt-outs. But the change agent should never have to articulate them!

For the other leaders in the organization, opting out must be a visible, deliberate action that is advertised to the highest levels of sponsorship. Opting out has to have consequences. Or else, why bother?

Practical points

Cognitive dissonance being what it is, human beings aren’t wired to admit that they individually are the problem. Chances are, you read the anecdote at the beginning of this article with a real notion of who the victim was, and the victim probably looked a lot like you. The reality is that all parties in the anecdote hold responsibility. So, here are some things to do about it:

  • Sponsoring executives have to stay engaged and deliver their positional and personal influence through their change agents. Tell the organization that the agent has power and why. Never, ever leave that communication to the change agent. Define—honestly—the agenda the agent is working to implement. And, for goodness’ sake, don’t undermine the change agent by entertaining back-channel grievances and allowing one-off deviations from the plan without explicit, advertised, and good reasons. Sponsor the right behaviors through influence or force.
  • Change agents need to clarify the source of their power. Can they state in a short sentence what would keep the organization from opting out? Are the power dynamics such that the change agent is set up to fail? Remember: Idealism is great, but not sufficient. Just going and doing a good job is not enough if the power structure isn’t in place.
  • Group or organizational leaders have to own and explain their priorities. To be sure, there are myriad good reasons—ranging from timing to talent—for opting out of change initiatives. Handled transparently, these reasons can be managed well. If handled passively or through backroom deals, however, opting out sends a signal to the rest of the organization (that doesn’t have such good reasons for it) that opting out will be tolerated and accepted. So, why bother?

If you deploy change agents, be sure to back them with enough power to make them effective. Practice sponsorship, not spectatorship. Define your agenda. Lead. Clear the way.

If you’re a change agent, be sure you have enough power through sponsorship to achieve what the organization expects you to achieve. If you don’t have it, get it. Can’t get it? Move on.

What do you think?

The cure that kills

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Corporate change programs can be toxic treatments unless heavily dosed with honest communication.

Geoff Wilson

Early in my career, I had a conversation with a mid-level manager (let’s call him Carl) within a large company undergoing a tense operational change. Carl was responsible for multiple small sites in the organization’s footprint. He led tens of people. It wasn’t hundreds or thousands, but still significant.

I was a fledgling consultant to top management at Carl’s company. My team was focused on designing the approach to the company’s change. In my conversation with Carl, I asked how things were done and what would help with the change.

The conversation was productive, but then Carl paused. I now know it was the pause that comes before someone actually breaks through the facade of their professional life. At that point in my career, however, I just thought he was thinking.

Carl then laid it out there: “All these corporate programs—I can’t tell which way things are going or why we are doing what we are doing.” He paused again, and then unleashed the words that have stuck with me ever since: “It makes you feel like a beaten dog. You flinch every time the corporate hand comes toward you because you are more used to it beating you than it helping you.”

And there, my friends, was a life-changing moment. It was life changing for two reasons:

  • Carl was an honest guy. He was trying to comply with corporate mandates—and was getting crushed in the process. He lacked access to any rhyme or reason for the change.
  • I had a core belief (now solidified) that no senior executive walks into the office seeking to foist valueless initiatives on his or her people for the sheer joy of creating confusion and frustration. (Side note: After years as an advisor and executive, I’ve known one or two executives who propagate valueless initiatives for the sake of their own ego, but not as real sadists. The end result is the same, but the intent isn’t)

In Carl’s case, the two sides of the circuit—top management and line leaders—had strong values and desires to do great jobs. But they weren’t connecting. The missed connection was consequently crushing drive and initiative where it was needed most.

In other words, initiatives, mandates, and highly valuable corporate performance programs driven from the top looked—to those most needed to buy into them—more like beatings than opportunities. They were systemic “cures” handed down from corporate offices that could literally kill local energy and focus. The programs dulled the edge of the very people meant to be sharpened by them.

Not only that, but the entire situation very quickly made senior leaders look like the “doctors” in this post photo. Not folks you’d seek out for a cure, eh?

In the history of medical science, many so-called cures have proven lethal not only to diseases, but also to patients. The history of cancer chemotherapy is rife with such instances. Actress/playwright Anna Deavere Smith deftly illustrated this concept in her solo play “Let Me Down Easy” when she wrote that cancer therapy is “like taking a stick and beating a dog to get rid of fleas.”

Corporate change programs—especially the big ones—sometimes have the same feel: indiscriminate cure targeting incorrigible disease launched against unassuming patients. A stick swung against the body, and then again but in a different way. Again. And again. And again. Striking nerves and tissue they don’t intend to strike, but doing damage anyway.

It’s a way of targeting performance that is often effective but sometimes lethal. Corporate change programs, like a stick used to beat a dog or a powerful chemical used to decimate a disease, can be a cure that kills. But the analogies break down at that point.

Why? Because we as corporate leaders are able to package and prepare our patients for our cure in a way that no canine or cancer patient’s body can ever be readied. We can turn the stick into a staff, or the chemotherapy into a nourishing concoction.

How? We can use the power of “why.” We can communicate not only what’s coming, but why it’s happening. We can explain the meaning of the action and its upside for stakeholders. In the cases of the worst outcomes—change programs that have necessary but terminal impact on some individuals—we can quite literally let those afflicted down easy.

We just need to take the time to do it. And do it repeatedly. And then to do it again. But how? Simon Sinek’s TED talk that encapsulates the concept of “starting with the ‘why'” is a helpful guide. For leaders to inspire action and minimize confusion, angst, and ultimately departure, we should ensure that the “why” reaches everyone the change impacts.

Summarizing change in a change story is a great way to start. Delivering it personally is even more captivating. Living the change out visibly is the ultimate approach. But there’s a catch: If you as an executive leader don’t change at all OR you change too often—especially if your “why” keeps changing while the world around you isn’t—you’re just swinging the stick in a different way.

Being outstanding at operations one quarter, great at growth the next, and excellent at efficiency the following only serves to show that you’re untethered from principle. That, or your principles aren’t what you’re packaging into your “why” to begin with. Either way, you resort to more of the same—except now, instead of death by confusion and randomness, you’re propagating death by disingenuousness.

Don’t be untethered, and don’t be disingenuous. You have to have vision and integrity.

Change leaders of all stripes: Stop beating your dogs. Use the power of preparation and communication. Drive performance by leading with the “why.”

Prescribe a cure that cures by preparing people for the treatment.

What do you think?

Trump: A demonstration of how executive mandates fail

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Your leadership mandate fails when people start to believe it has.

Geoff Wilson

“I did nothing wrong.” So many failed executives begin there to explain unsuccessful stints as leaders. But I’m here to tell you that it’s the appearance of failure that precedes executive failure, not actual failure.

President Trump’s former campaign chair Paul Manafort’s home was raided by the FBI this week in ongoing investigations of whether the Trump campaign had improper contacts with Russia. This follows months upon months of speculation about improprieties involving Russia.

The cynics and opposition already believe Trump is unethical. Trump’s defenders claim there isn’t evidence of the accused impropriety, and that extreme political attacks from the opposition are leading to mass insinuation regarding collusion with Russia.

But when the campaign chair is raided by the FBI, even the defenders have to pause and think. It looks like the apolitical investigators believe Trump’s closest advisors can’t be trusted to be forthcoming. And that is where an executive’s mandate gets crushed. Trump’s defenders will, perhaps rightly, say that no wrongdoing was done. And they miss the point. Because it’s the appearance of impropriety that destroys your mandate, eventually.

If you’re an executive, you don’t have to engage in acts of conspiracy to defraud your shareholders to be removed from office for conspiring to defraud your shareholders. And you don’t have to sleep with your subordinate to be removed for inappropriate workplace relationships. You just need enough people to believe that the accusations are possible.

If people believe an accusation is possible, you’ve already lost. And when numbers and facts start to back it up, it becomes easier to believe. How many times did you inappropriately round those numbers in that financial report? How often did you take overnight trips alone with that one subordinate? How many meetings did your organization have with Russian organizations. These elements of appearance quickly become perceived evidence of impropriety.

So what?

You want to keep your mandate? Appear and act like you should.

Here is one of the most useful aphorisms in life and work: We judge ourselves on our intentions, and we judge others on their actions. Remember that you’re being judged on your actions—even the appearance of your actions—no matter your intentions (or even the private facts).

What do you think?  

The danger of “only winning” in business

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Only beating the competition isn’t strategy.

Geoff Wilson

What a week it’s been on the political scene. We saw U.S. Senate Republicans almost (thanks to John McCain’s last-second “no” vote) pass an absurd bill to effect the “skinny repeal” of Obamacare. The bill would have stripped the economically rational parts of Obamacare (the mandates) and left the rest.

The bill was so ridiculous that Senate Republicans actually didn’t want it to be passed by the House and sent to President Trump for signature. Some just wanted to make a symbolic move in the name of winning something on healthcare.

The bill was an act that focused on “winning” against a foe, but it was ultimately grounded in no vision whatsoever for the future health of the country (literally and figuratively).

Strategy focused only on winning against the competition may not be enough

“We won the battle but lost the war.” You’ve heard that plenty, I’m sure. It’s a tired adage. The problem is that modern organizations are rife with battles yet extremely light on defining of the war. A case in point would be your functional organizations, which may define winning in ways that have nothing to do with the mission of the greater company. Your human resources team wants to hire and train, your supply chain team wants to source cheap raw materials, and your engineering team wants to create a better mousetrap. Which of these three investments make the most sense for the company? Who knows.

The same is true for business managers. So many business strategies are built on beating the competition that doing so has come to define strategy. But what if the competition is playing the same tired game? Who’s out there looking for ways to deliver value to customers that the competition hasn’t thought of yet? One of the reasons the book Blue Ocean Strategy by Chan Kim and Renée Mauborgne has captured so many imaginations is that it has exhorted us to look for ways to deliver value that others have not figured out. The concept is literally “find out where the competition isn’t,” but in a way that implies innovation in that void, not mere presence.

But doing so requires vision

The major issue with applying this “more than winning” approach to strategy is that it takes time and expertise—it requires vision. You need to have the time to think of strategy as avoiding the competition and focusing on the vision for the customer. And you have to have the expertise to actually figure out how to do it. Chances are there aren’t many people in your company who have both the time and the expertise.

The U.S. Senate nearly taught us this week that only focusing on winning against a foe can lead to really stupid outcomes. Absent a compelling vision for how to deliver stable, cost-effective health care to citizens via regulatory boundaries and mandates (an admittedly hard thing to do), the Senate simply aspired to do something to beat the competition. May your own strategy avoid such a ditch.

Now it’s your turn:  How have you seen this sort of thing play out in your career?

Take the right strategic steps to confront mistakes at minimal cost

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Facing our managerial miscues is painful. Properly rectifying missteps is paramount.

Geoff Wilson

“That’s too much savings!” The manager looked at the spreadsheet that showed he had been overspending by more than 50 percent on a particular service under a sweetheart deal he thought he had. He was clearly mortified by what the math displayed. “Too much savings” meant a long history of too much spending, and he was the one responsible.

The phrase resonates to this day. A team member of mine who was on the aforementioned project alongside me still occasionally drops me the question via text or email: “Are you still getting too much savings these days?” It’s a delightful “How ya doin’?” But that episode, while humorous to consider in isolation, actually illustrates a good lesson about confronting reality as business leaders.

At some point, we all must face the unpleasant fact that we’ve made mistakes. We’ve hired the wrong people, bought and sold at ill-timed prices, or invested in the wrong markets. It happens to every one of us who actually make decisions. We try to be perfect, but we’re simply not.

My overspending manager, however, compounded his imperfection by trying to sidestep the inevitable pain of confronting a mistake. He popped the infamous “too much savings” comment not to state that we were going to cut costs too far, but rather to convey “I can’t give this to my boss because it will show I’ve made a big mistake.”

And that’s the problem. Analyzing our decisions sometimes reveals that we’ve made bad ones. And correcting poor decisions often means facing the proverbial music—the dirge of our defeat. We must admit it and move forward. And that’s hard.

If we examine a bad investment we’ve made and choose not to write it off but to instead double down on it because, well, doing the right thing would be too painful, we’ve ultimately determined that doing the right thing is wrong because of the optics or our insecure need to save face. Such decisions may be human nature, but they’re also cowardly, selfish, and detrimental to personal and organizational growth.

If you find yourself in a situation where the answer is so right that it’s wrong, ask yourself why. The correct strategic shift often comes with a cost, but the price of inaction is typically not less than your own job.

After all, if you won’t make the right decision, the person who replaces you probably will. And he or she will look like a hero doing it.

What do you think?

FLY THE AIRPLANE

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When you are faced with many distractions…remember to fly the airplane.

 

It looks like there’s a Star Wars marathon on this weekend, and I fell right into the middle of A New Hope last night.

One of the more memorable scenes from that movie involves a team of pilots on a mission to destroy the Death Star.  In the midst of an attack run, two of the pilots come under attack by the bad guys.  One of them starts to look around and panic.  The other one simply continues speaking a mantra while keeping his sights on the objective…

“Stay on target.” 

The little mantra has been repeated in many internet memes and, no doubt, executive conversations.  And, there’s a reason.

When stuff starts going off kilter around you…staying on target is hard to do.

A great example of an exhortation to “stay on target” is contained in Atul Gawande’s excellent book The Checklist Manifesto.  In it, he describes the first instruction in the emergency checklist for a single engine airplane. It’s simple.

FLY THE AIRPLANE!

That’s right.  When you are the pilot and the troubleshooter, the most important thing to do in an emergency is actually not to troubleshoot.

It’s to fly the airplane.

There’s good learning in there for business leaders.  Let me describe three ways.

The first way is relevant to people who have a little bit too much of the philosopher in them.  These are the CEOs who relish high concept but not the nitty gritty.  They take the need to have a long term view too far, and they stop responding to short term needs.  CEOs who never meet with customers fall into this bucket. Yes, they exist.  Their failure is usually in ensuring delivery vs. direction.  I once worked near a CEO who had famously told his investors “I delivered you a 3 year plan, but not a 1 year plan.”   That’s the CEO who forgot to fly the airplane.

The second way is relevant to modern managers who struggle on the opposite end of the spectrum.  They are the ones who can’t look up from the gauges to see the mountain ahead. They spend too much time with customers or on the production floor, and too little time on direction of the company overall. These are the Dale Carnegie grads who always put people first, but who forget to stay on target with the organization as a whole.  The best examples of these executives are the ones who build magnificent operations and organizations tailored to solving yesterday’s problems.  You probably know them.

The third way is relevant to those who struggle to define what “flight” is.  These are the executives who only pursue financial performance as their “target.”  They think of flight only as airspeed and lift and not safe arrival at a destination.  The executive here is the one who hits every key performance indicator except the ones that point to the health of the business.  They are the ones whose customers are indifferent and whose top performing employees are leaving in droves. Next time you see a sick company with a CEO who departs after earning the biggest bonus of his or her life, you will think about this type of executive.

So…in your own life, you must “stay on target” and “fly the airplane.”  It matters whether you are too focused on the long term or the short term. And, it matters when you may not have defined what a healthy target (or flight itself) actually is.

FLY THE AIRPLANE!

 

Mars, Resilience, and Resourcefulness

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What do you do with what you have?

 

One of the cool parts about having a 13-year old homeschooled son is that I get to ride along for some of his lessons.  He is currently taking a class that revolves around watching a broad set of historically and ethically relevant films and reflecting on them.

Last night, the assignment for this class was to watch The Martian.  If you have not read this most entertaining book or watched the visually and emotionally stunning motion picture, you might be missing out on a really great science fiction narrative rooted in a very real approximation of real world scientific constraints.  But, that may be beside the point.

As I mentioned to my daughter this morning on the ride to school (she, one of our three non-homeschoolers), the lessons from The Martian are not only good lessons for a person who might one day be trapped on Mars.  They are very much real life lessons applicable in junior high or in the boardroom of the largest organizations.  They are lessons in resilience and resourcefulness…and they resonate.

Here are a few aspects that stand out from The Martian that just might save your life or career right here on earth.

First, things are going to go wrong. It’s how you respond to crisis that matters.  The main character in The Martian is a guy named Mark Watney (played well by Matt Damon in the film).  He is famously stranded on Mars after a confluence of events that make your head spin.  But, once faced with the reality of his situation, he takes stock of his situation–which is exceptionally dire–and gets busy figuring things out.  He, faced with a painfully narrow chance of surviving in a harsh environment, famously says “I’m going to have to science the shit out of this…”

We are all faced with times where we have to “manage the shit out of” bad situations. They can be immediate crises with clients or customers, or they can be the slow train wreck of a deleteriously competitive market.  Mark Watney’s example of reacting to reality is instructive.  Take stock, let the emotions work themselves out, then get to work.

Second, your resources are going to be limited, but often not as limited as you think. For me, the most amazing aspect of The Martian (and one that is far better fleshed out in the book) is its overt display of resourcefulness.  Watney is forced to confront his resource constraints in terms of power, water, air, food, warmth, physical strength, ability to communicate with the rest of the world.  He then goes about tackling, one by one, the constraints he has, and he uncovers new ways of solving his own problems. Without going into detail, I’ll simply say that Watney’s ongoing calculations of his resources form a centerpiece of the book, and his continual pressing against those constraints is instructive.

You and I are going to have to face constraints.  We can only make so many sales calls, close so many deals, and coach so many people in our organizations.  We can only spend so much capital.  It’s a fact of life.  But, many creative managers out there get more productivity out of their sales forces, work forces, and capital because they try. They don’t have to be Watney-esque, they just have to ask the question of whether constraints assumed are constraints for real.

Third, it helps to have moments to reflect…and a sense of humor.  This one seems easy, but it’s actually one of the best lessons for high stress professionals anywhere.  Watney is the king of the one liner in both the book and the movie; and he is the king of the reflective vignette that frames his awful circumstances in positive light.  In one instance, the character reflects on the fact that no matter what he does on Mars, he is the first person ever to do it.  And, that’s kind of cool.

Professionals anywhere tend to know the value of a moment of humor in a terrible circumstance. Gallows humor isn’t that hard.  What is hard is stopping for a moment and positively framing challenging circumstances.  Then, you get back to work.

Fourth–and I’ll stop at four–The entire book is a treatise on the need for resilience in problem solving.  If you aren’t failing, you probably aren’t working on hard enough problems, or you aren’t working them fast enough.  The Martian is a book about failure.  There are failures of systems, people, organizations, tools, and even imagination.  The book and film are so outstanding because of their display of resilient problem solving in the face of failure.  You get blown up by your improvised water generator, and you light that mother right back up.

Resilience is something that we are, unfortunately, breeding out of our culture. That is, perhaps, a topic for another blog sometime.  But, the fact remains that as our levels of professional, political, and social understanding narrow, we feel the buffets of perspective shocks far more than we used to. As professionals, we need to be resilient because the world changes.  We may not face life and death circumstances for our bodies, but our ideas may live and die constantly. Have the courage to keep going.  Have the courage and grace to allow your organization to keep going.

The Martian is about Mars.  And, it’s chock full of life lessons for us right here on Earth.

May we learn them.

Are You Too Smart To Be Great?

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The best executives aren’t too smart for their own good.

 

Have you ever worked for the smartest guy in the room?

I don’t mean literally, I mean figuratively…as in he thought he was the smartest guy in the room, and so he disregarded good counsel constantly.

There’s a segment of leaders out there who got where they are by bringing a lot of horsepower to bear.  They got there by answering the question.  They got there by making A’s on tests and getting the top grade in the class.

And, on the way?  They lose their ability to be good executives.

I once worked near a senior executive who was an insufferable, arrogant boor to everyone around him. He wasn’t a boor in the “gets drunk and makes off-color jokes” fashion.  He was a boor in the “don’t even bother to argue with him” fashion.  He was the smartest guy in the room, even when it was demonstrable on the facts that he was not, in fact, right.  This habit–one of being always certain but only sometimes correct–drove people away from him until he lost all effectiveness.

In my 4 lives as an investment analyst, a “big firm” management consultant, a corporate executive, and now a boutique strategic partner, I’ve witnessed the foibles of dozens of senior and chief executives up close (not to mention my own).  And, given that experience, I think being too smart is a tremendous hindrance to effectiveness.

Why?  Let me count the ways.

First, executives who are too smart for their own good tend not to delegate.  Why? Well, nobody else is smart enough to get the job done right.  Executives, by definition, have to drive organizations. Being too smart to delegate is a killer.  This does not mean that they necessarily micromanage…they just don’t give freedom to their less smart underlings.

Second (and only slightly less bad), too smart executives tend to try to delegate via control and process.  They institute “simple” processes that muck up management culture and drive people who aren’t so smart absolutely crazy.  The next time you wonder why your TPS reports have to have three covers on them, you will think about the executive who is too smart.

Third, and building off that point, executives who are too smart tend to overcomplicate.  This is especially true in today’s data rich and insight poor environment.  The too smart executive wants to study more, build in that extra variable to the model, vet and validate assumptions, and generally create intellectual friction.  They drive complication.  The worst of them drive complication and then ask their teams why things are so complicated.  It’s exhausting.  Watch out for the executive who always orders studies and never makes decisions.  He’s probably an over-complicator.

Fourth, and final for the purpose of this post, the too smart executive runs the risk of being dismissive of outsiders.  I watched one C-level executive consistently disregard questions and encouragements from his board.  The board “just didn’t get it.”  A slightly less smart executive learns to take it all in.

And, my friends, that may be the key to this post:  Listening.  Executives who are smart enough learn to listen to outsiders, insiders, superiors, subordinates, and others.  They listen for signs that their own intellect may be getting in the way.

Go out there and be smart…but not too smart.

 

Tversky, Trump, and Unintended Consequences

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Bad things can happen when people see no upside.

The 2016 election has produced a president-elect who is…unorthodox.

Donald Trump’s election, however, is quite possibly the result of one of the most important quirks to human decision making ever discovered.  Namely, that people are risk seeking when faced with certain losses.

That’s right–when our back is to the wall, we tend to roll the dice.

In a series of experiments years ago, the late, famous psychologist Amos Tversky and his collaborator Danny Kahneman delineated Prospect Theory.  Among the key outputs of Prospect Theory was the notion that people are protective of gains…we like sure gains over gambles even if the gambles are expected to pay off more than the sure thing.

But, we are very willing to speculate when it comes to sure losses.  We will take the prospect of a gamble that results in a big loss or no loss at all over a certain smaller loss. Back us to the wall, and we roll the dice.

It’s arguable that such a psychological phenomenon drove the election of Donald Trump, who represents tremendous uncertainty when it comes to things that matter (like policy…I’m not talking about his tendency to Tweet). Things may just work out great, but we don’t know yet.

A large enough proportion of the electorate was backed into a position where voting for Trump’s opponent was a sure loss–a vote for a status quo that wasn’t really working for them.  Instead, they had the option to roll the dice on an option that might just break even.  So, they did…in droves.

You could argue–and Monday morning quarterbacks of the election have done so–that by disregarding wide swaths of the electorate who saw only continued decline coming with a vote for Hillary Clinton, the Democrat party backed those people against the wall.

Kahneman and Tversky showed us that if we put people in a lose or gamble situation, they will gamble. They will gamble even if the loss is only modest (in this case, simply the status quo of steady opportunity erosion).

So, what’s the insight for you as a leader?

From an organizational perspective, let’s say you are an executive or a board member who wants to “send a message” to an organization.  Maybe that message looks like a substantially more challenging compensation structure–you raise target performance by 50 percent, cutting likely compensation for executives by 25% in the process.

What you’ve done is sent a message to them that says “you are going to lose compensation this year.”  Remember that when faced with a sure loss, people are much more likely to roll the dice and move on. Expect lots of people, especially good ones with other prospects, to check out.

From a strategic business perspective, the same can happen.  If your strategy is to drive your competition to the brink, then you must know that competitors will roll the dice when at the brink.  Good conduct consists of avoiding backing the competition into the wall unless you know the endgame.

It might feel good to back them to the wall; but be ready for their gamble if you do.

What do you think?