(In)Attention to Details

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Are we losing the ability to mind the details?  I don’t think so, but maybe!

 

Chalk this one up to amusement, but I ran across an article today that explains how the state of Oklahoma recently adopted “loser pays” for attorney fees in all civil suits.

That’s a big deal.  A really big deal.

But it was “unintentional.”

Yes, no kidding.  A bill was voted on, passed, and signed into law by a state legislative body and executive. And, its effects were unintentionally broad.  Here’s an article on this doozy.  The key quote:

The amendment, written by state Sen. Anthony Sykes, R-Moore, was intended to apply only to civil cases involving child sex-abuse.

But the amendment had a broader impact, according to the Senate author of the bill, state Sen. David Holt, R-Oklahoma City. “Upon a closer reading of the amendment, it seems evident that it makes all civil cases … loser pays,” Holt told the World. “But nobody caught that.”

But nobody caught that…

We are talking about a massive change in liability for legal fees.  And the response is, essentially, “oops.”

Well, luckily the Oklahoma legislature can change it.

But it raises the question: Are we suffering from a societal migration away from what one of my favorite coaches used to call “attention to detail?”

When a legislature can pass a bill through multiple steps and have such a big miss, imagine what details are being missed in your company or in daily life.  You need look no more than your web browser to see the effect of lowering standards for attention to detail.  Today’s news media are a caricature of the phenomenon, where we are constantly barraged with half truths and partial lies, no matter where you stand on the political spectrum.

In most pursuits, details matter.  In critical ones, they matter a lot.  When you are acquiring a company or putting together the biggest sale of your life, it’s rarely ok to say “let’s let the lawyers handle that.”   In Oklahoma’s case, the law can be changed.  That’s not so when you forget to vet the representations and warranties in your purchase agreement!

Nirvana on attention to detail is challenging.  I’ve known many people consumed by the details.  The trick, I find, is to combine the accountant’s eye for detail with the artist’s eye for completeness.  You have to get the details right, but also be able to notice what’s missing.  You have to see the forest and the trees, as it were.

The best strategists that I know are able to master this art.

Can you?

 

 

 

Formwork, Not Framework

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We sometimes miss the point when it comes to the use of frameworks in business.

Have you ever been around a management guru who can’t get away from his or her framework?  You know them, they are the ones who have trademarked the framework and, by golly, they are going to use it.

No?  Well, what about this one:  Have you ever asked someone to think about a strategy, and only received a filled in framework in response?  Surely, you’ve seen this one:

You and a business leader in your company:  “Give me a sense of your marketing strategy…”

2 weeks later:  “Here’s the strategy you asked for…we used the Segment–> Target –> Position framework.”

Ay Caramba.

Framework-itis.

It happens to people who are smart, and not.  It happens to people who are experienced, and not.  And, yes, it happens to people who should know better.

WGP has carried out more than 40 engagements in our short existence, with the vast majority of those focused on business unit or corporate strategy.  Our approach is littered with frameworks.  Littered, I tell you.

Why?

Because frameworks are useful as checklists. We use derivatives of classic business strategy frameworks all the time.  I have a personal affinity for the S-C-P framework, and it’s an absolute dinosaur (Structure, Conduct, Performance for those of you who don’t share my dino-approach to business strategy).

But, and this is an important but…the frameworks are not useful as strategies.  They are useful in helping to derive the right conversation that leads to a strategy.  And, that’s where so many management strategists go wrong.  Just like a balance sheet is a common basis of presentation for the financial position of a firm, strategic frameworks provide a common basis of presentation of strategic situations.  They don’t, however, provide interpretation.

You have to provide the interpretation…and the action.

And that’s the point of this post:  If you feel yourself being fed (or, feeding) frameworks as the answer to a business strategy question, you are probably off track.   Frameworks are not the answer, they are checklists for thinking.

Perhaps we should use the word formworks instead of frameworks because classical “frameworks” only provide a format for thinking.  They can never provide the skeleton of a real strategy.

Know how to use the tools.

Be careful out there.

 

Data rich, insight poor

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The secret to your organization’s success is rarely more data.

Geoff Wilson

I woke up this morning and stood on my bathroom scale. The scale is, like many things nowadays, networked and bluetooth’d. It takes my weight, heart rate, body fat percentage (don’t ask), water percentage, and something called “pulse wave velocity” that I’ve yet to understand or investigate. It logs all that data for me to shamefully view on my mobile phone whenever I like, thanks to an app that connects to my bathroom scale.

An APP that attaches to my BATHROOM SCALE, people! The United States landed a man on the moon using slide rules to calculate, and here I am today with a scale that can instantly dispatch my disgrace around the world.

But it isn’t enough for information to simply be collected and “there”—it’s what you do with it that matters. And on that note, let’s shift from the topic of my body weight (nothing to see here, folks).

Data rich, insight poor

Modern institutions have astounding arrays of data sets to access. The sets are often not only overwhelming but competing as well. One client we serve measures revenue at least three ways, and gross profit margins can be viewed in at least three more ways—as in, we could apply three different margins to each of the three different revenue stream metrics.

Management teams have access to operational statistics, people statistics, economic data, customer surveys, sales force metrics, supply chain metrics, and countless additional data bases and data points. They can, quite literally, send measured data anywhere, anytime.

So-called “big data” is here—but it isn’t always what it’s supposed to be. That’s because there’s a paucity of insight accompanying that data. For all the richness of data at our fingertips, we’re poor when it comes to insight. In the worst cases, we are paralyzed by the sheer volume of data we can access.

At one client we recently served, a long-range forecast of a global market turned into the ultimate merry-go-round, as the forecast assumptions were tweaked and adjusted to the point where debates raged about long-range global growth rates and whether they should be .1% higher or lower over 10 years. The debate, while comforting to those involved, didn’t really matter.

That, my friends, is the consequence of being data rich and insight poor. And it’s a frequent problem.

The answer

So, what’s an action-oriented executive to do? I’ll put it simply: Know when enough is enough.

Sure, employ data scientists to ensure you’re getting the right cuts of data and analysis, but be sure that you’re also focused on insight. That means you’re identifying meaning in all those numbers you can pull. Just because you have access to mountains of data doesn’t mean you have to (or should) use it all!

Bill Clinton famously wrote that he got involved in some unsavory executive behaviors because he could. In other words, he engaged in unproductive activities because his great power enabled him to.

Many of today’s executives, analysts, and advisors participate in navel-gazing exercises that result in really cool charts but no action because they have access to never-ending data and capacities to manipulate it, without the will to stop and ask two key questions:

  1. What does the data we have mean? Interpret data for insight. Don’t just admire data for merely existing.
  2. What would more data really do to improve our understanding of that meaning? Analyze for decision-worthiness. Think of data availability as a question of “enough to make a decision” vs. “enough to make a comfortable decision.” By the time you make a comfortable decision, the competition is already there.

Our mission at WGP is “to improve our clients’ strategic positioning and enduring performance by providing practical strategic data, analysis, insight, and advice to top management.” It’s true. We wrote it down. We are focused on the fact base, but we fail if we deliver no insight from it. If we can present meaning and action, we are successful. If we merely deliver data, we aren’t doing our jobs.

Our clients appreciate us for this fact-based yet practical approach. In today’s data-rich and insight-poor environments, it’s important to have a partner to help sort through the morass.

Your bathroom scale may be able to send you data while you’re chowing down on fried chicken, but does that really matter if it doesn’t result in changed behavior? Knowing is only half the battle.

What do you think? 

What If You Gig a Lemon?

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As the gig economy continues to evolve, how do we define value in it?

I had this link come across my newsfeed today.

It looks like seminal gig economy facilitator TaskRabbit is pursuing a strategic sale.

From the article:

One of the earliest and most prominent startups of the so-called “sharing economy” or “gig economy” is evaluating the possibility of selling itself. As reported by Recode, freelance work marketplace TaskRabbit acknowledged that it is contemplating a sale after receiving inbound interest from a possible strategic buyer.

Now, I won’t comment on the merits fo the report other than to say that “inbound interest” usually means “we put ourselves up for sale and somebody called.”

Usually.

But it raises the question in this whole gig economy concept.  How do we place value on freelance contractors?  This issue is one that certainly matters to anybody contemplating the valuation of TaskRabbit as a company (because, one would assume, the value of a broker is in its ability to consistently snag a vig out of a high-value transaction for both the buyer and seller of a service).

When it comes to well-defined services like Uber, one can establish real regulating metrics for the service and scare out poor quality relatively quickly (especially when it comes to competing against taxis in most cities, which are decidedly…crappy). And, as with the mountains of venture capital that have underwritten Uber’s below market prices show, you can incite trial use of almost any simple service.

But, when it comes to more trust-oriented services, like those TaskRabbit sells, the ability to assure value becomes a big issue.  If I’m going to invite someone into my house to assemble furniture (one of the tasks that TaskRabbit puts right on its front page as an example), I have to know what risk I’m actually taking for the price.

And, you know what?  That risk is highly variable.  The person might break the furniture, soil the carpet, and scratch the floor.  Sure, TaskRabbit can reimburse for that, but who takes the risk of time, disappointment, and re-work?

You do.

And that’s where the gig economy will face its biggest challenge:  quality assurance a priori.

The more complex and critical the task, the more difficult the quality assurance mountain to climb.  Move from a contractor who assembles your furniture to one who builds your financial plan, and you start to see how trust gets built into the equation.  You always seek references (or the backing of a big balance sheet) when looking for a new financial advisor.

The problem with mass-market matching services (in both the consumer market, like Task Rabbit, and in professional markets, like any number of talent agencies out there), is two-fold.

First, the discerning buyer who cares deeply about quality and who is likely far more loyal to high-quality experiences–we at WGP call these the “clients you want”–won’t take the risk on a mass-market service. They will either demand a barebones price, or just go on about their business.

Second–and this is the real challenge for gig-talent-markets–people with real high-quality and trustworthy talents are usually already busy.  There’s a reason the A/V contractor all your friends like is booked 4 months out.

He’s a good one.

The confluence of these two factors leads gig-market-makers like TaskRabbit to face a version of the classic “lemons problem” in used car markets:  Because sellers can hide the true quality of their services ex-ante, buyers demand pricing that assumes the service is already a lemon.

This is a problem for any broker, and acts as a weight on prices (to the benefit of the buyer, to be sure…but to the detriment of the seller and the broker). So, companies focused on brokering services that are increasingly ambiguous will face the biggest issues and talent validation costs.  Talent markets for high profile independent consultants are already seeing some of these cracks.  Those services place, on average, very strong consultants with their companies. But that’s on average, which means not systematically.  And, it only takes one “oh crap” to screw up a whole lot of “atta boys.”

The solution?  The more critical the task, the more intense the background check and validation of the service needed. In the home furniture assembly market, it probably only means a handful of 5 star ratings on an app.  In the independent consulting market, it probably means a handful of real, solid references not coming from the broker themselves.

It’s the same as it ever was.  The outer circles may (and should) get contracted out through efficient means (like Uber, Lyft, etc.), but for the inner circles?

Trust is king.

I suppose this spells danger for the “strategic buyer” evaluating TaskRabbit today. In-home services are a challenge, and risk sharing in that world is doubtless fraught with concerns.

What do you think? 

 

Do You Have an Empathetic Strategy?

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A little empathy can help your strategy.

 

I’ve kept this one in the queue for quite a while.  Sometimes things just get stuck there.

In an early 2015 insight by McKinsey, Catherine Courage, SVP of Customer Experience at Citrix Systems, landed this outstanding strategic punch while talking about “design thinking” with an interviewer:

“Design thinking is an ideal framework for us to use because it focuses on developing deep empathy for customers and creating solutions that will match their needs—as opposed to just dreaming up and delivering technology for technology’s sake.”

Design thinking has been, for me, one of those near cringe-worthy topics because of the essential nothingness of the term.  As a matter of fact, a large proportion of the interview in the link above is dedicated to merely defining “design thinking.” And, while I still think “design thinking ” is better suited to a marquee than to a management process, I think Ms. Courage nails it with her comment on empathy.

We would do well to extend her comment on empathy to our company strategies as a whole.  If design thinking is the focusing of product design and development on the experience of the customer, then strategic thinking shouldn’t stray far from a focus of resources on meeting the needs of customers.

Call it strategic empathy.

I’ll be the first to tell you that strategy is all-too-often devised for internal purposes and not for attainment of external goals.  Strategy, in the wrong management team’s hands, becomes just another process.  It becomes a set of steps to complete so that a capital request can be approved or a new project can be started.  It loses customer empathy very early on.

Similar to unenlightened product design efforts that never really touch the customer, unenlightened strategic plans ignore the market and customers as well.  The worst offenders wrap their strategy around a financial model.  As a huge believer in the financial model as a foundation of strategy, I can also say that a financial model is necessary but insufficient for defining a company’s strategic plan.

That requires listening to the market.

That requires empathy.

That requires patience.

Take the time to understand what it is your capabilities can deliver to your customers, then set direction.  You might find that a little bit of design thinking–applied empathy, just as Ms. Courage from Citrix describes–can help your strategy.

What do you think? 

 

Top WGP Blog Posts of 2016

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WGP’s most popular posts in 2016, and a few strong late entrants.

 

2016 has been another fun year on this blog.

The blog itself is nearing 200 posts since 2014.  That’s hard to believe. While it makes for a nice hobby, I have to admit that I fully appreciate the supportive comments and suggestions I receive.  I appreciate all of you who read regularly.

As we get ready for the new year, I thought it might be good to list some “most popular” reads from 2016.  This is totally unscientific, of course–posts from January 2016 get more play than posts from December by virtue of exposure time. So, to offset that advantage, I’ll put a few “honorable mentions” at the bottom.

The blog’s top 10 posts in 2016 were:

  1. A Song for Me At 23 – Some personal reflections on work and life as a youngster.
  2. It Ain’t What You Put Into It That Counts – Why an overweening focus on input is a loser’s game.
  3. The Pain of Mourning Alone – Some reflections on the importance of team and community in hard times
  4. What You Learn is What Matters – Reflections on making the best of any circumstance.
  5. Shark Tank And Manufactured Choices – Why it’s important to take a breath and evaluate all your choices.
  6. Real Talent Never Dies – A tribute to Prince and his influence–written in strategic talent terms.
  7. What Tesla’s First Autopilot Fatality Teaches Us – A short stab at the challenge of a killer product.
  8. Why I Don’t Believe In Recruiters – An experience-based screed about recruiters and headhunters and how to use them.
  9. The Worst Strategy Metaphor In Use Today – An older post about the “chess fallacy” in business strategy.
  10. When The Spin Stops – Why the Theranos case shows the limits of spin and hyperbole.

And, a few honorable mentions from the second half of the year:

  1. That Dead Guy In Your Organization – Why you put it in their belly, not their back.
  2. Cheese, Change, and Cheyenne – How to handle change, and why that matters.
  3. When Your Karma Runs Over Your Dogma – Why leadership via questionable means can come back to bit you.
  4. Ooh! That Smell – Why it’s important to know whether your organization stinks.
  5. They Believe In Good Ethics, Too! – A post from early October about how highly unethical people can thrive in highly ethical environments.

Onward to a great 2017!

GW

Why You Need A Little Intransigence

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An effective organization has a little intransigence.

 

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.

 – George Bernard Shaw

Meditate on that quotation for a minute.

Now, think about whether you have ever encountered the marginalization of an “unreasonable” person.  Once you’ve been in leadership positions long enough, you come to accept that it happens.  The brilliant researcher whose ideas are just too outlandish gets ignored by the cool-kid MBAs because he’s too likely to call their spin what it is.

The exceptional sales person whose ideas would revolutionize the way the company sells is just too aggressive with senior management to “get things done” the political way.

It happens all the time.

Now, think about someone you know who has actually built or turned around a company.  Think about how much of their style depended on being accommodating and flexible vs. directive and uncompromising. You will find a lot more of the uncompromising style in a real builder.  The easiest ones to name are nearly caricatures of doing things their own way–think Jobs, Rockefeller, Ford.

Somebody, somewhere, thought each of them were “unreasonable.”

And, there’s a lesson in these two thoughts.  You, as a leader, might buy into the notion that you have to go along to get along.  That’s fine, but you have to realize that real progress–real growth–requires people who are willing to challenge the status quo.

If you find yourself marginalizing people with new ideas because they don’t “get” your earnings target, you are part of the problem.  If you find yourself being bothered by someone whose entrepreneurial push to get you to try new things threatens your own well ordered sense of the world, you are limiting progress in your organization.

In short, if you aren’t the unreasonable one, then you need to find a few of them on your team.

There’s probably a critical mass of “stubborn” on a given management team.  I would guess it’s somewhere more than 20% of the team and somewhere less than 50% of the team; but I believe that proportion depends highly on the leader of the team.

A leadership team composed of a group of acolytes who only seek to enshrine themselves alongside the leader can be successful in the short term (if you read this blog you know that I believe that anyone can be successful in the short term).  But, it will lack the capacity to challenge the status quo.

Don’t murder or marginalize your unreasonable ones. Find a way to “dose” and channel the stubbornness into new things.  Create forums for intransigence and revolution.

You just might build something.

Finding Value in Your Vision

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Your vision for your career and your company should start with an articulation of the value you provide.

 

Does your vision articulate value?  It ought to.

Often, in the middle of coaching discussion with young professionals, I asked a basic question:

“What do you want to accomplish?”

The responses I receive to that question are often telling.  In some cases, I get interesting, highly functional visions of the next step in a career:

“I want to become a trusted finance leader.”

“I want to become the best project leader in the company.”

“I want to be an expert on M&A processes.”

These are visions that imply a strong value orientation.  They imply delivery of value on the way to accomplishing the vision. One cannot become a trusted finance leader without developing the skills necessary to, in fact, be a trusted finance leader.

Sometimes, though, the answer is more problematic:

“I want to get promoted.”

“I want to run a business.”

“I want to be a senior executive.”

These are visions that imply a strong status orientation.  They create ends that are status driven. One can “get promoted” under the wrong circumstances.  One can “be a senior executive” without developing the skills and capabilities necessary for the task.

Having witnessed multiple highly corrosive senior executives who were placed via the machinations of their own ambitions rather than the value they provide, I can tell you that fulfilling someone’s vision of position and status is exceptionally dangerous if that vision is not accompanied by a vision for value.

And that’s the point of this post:  Vision devoid of value is rubbish.

But, though I’ve articulated the examples above in terms of individuals’ visions for their careers, individuals aren’t even the worst offenders.  I know plenty of individuals who are great professionals but who can only articulate vision for their career as “promotion” or “a raise.”

They will be okay (if a little shortsighted).

Where the vision-devoid-of-value issue often comes up–and causes the most damage–is actually in business strategy.  We see status goals articulated as vision all the time.

“We will double the size of our company.”

“We will be number one in our market.”

“We will be a great place to work.”

These are all corporate level equivalents of “I want to be a senior executive.” They are status oriented visions.  They pass for leadership art in companies the world over.

And, they are entirely insufficient.

Shoot for specificity in the value you will provide.  Articulate a vision for that value…and then, go!

Can you articulate a value oriented vision for your career?  What about for your organization?

At WGP, our own vision statement could use some of the scrutiny I’ve suggested here.  We say our vision is to be the premier strategic advisory firm in the region.  What we really mean is to be the premier strategic advisory firm in the region because of the quality of our insights, advice, and people.  

There’s a difference.

What do you think?  How do you articulate a value-driven vision?

 

The Asymmetry of Action

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Seeking massive upside can lead you to inaction.  Watch out for “asymmetry driven inaction” in your strategic plans.

 

Sometimes you have to kiss a few frogs to find a prince.

 

In the lexicon of strategy and strategic plans, the word asymmetry is a useful one. But, it’s a dangerous one.

There is information asymmetry in negotiations.

There is asymmetry of outcomes for a strategic decision.

There is asymmetry of allocations: talent, resources, mindsets, and any other “resource” that can be allocated.

Asymmetry is everywhere. It’s the real world. We can engineer symmetry through repetition and reduction of variability, but reality is filled with imbalance, particularly in the land of business strategy.

Business strategists rarely have the luxury of making the same decision over, and over, and over, and over again. They usually have a few big decisions to make, and they have to guard them very closely.  Why?  Because the world is finite.  There are only so many customers you can piss off when trying to get your sales approach right.  There are only so many acquisitions targets you can approach with the wrong pitch before you run out of them.

True strategists face a series of one-shot games. They can learn from their shots, but each game is different. Each deal has a different flavor. In fact, if you sit in a position where you face only a continuous series of outcomes vs. a discontinuous one, you are probably not a strategist. You are a portfolio or risk manager. Those are not the same thing.  A true strategist has to account for everything before taking one shot.

And, this accounting is where the real danger of taking popular and business press too literally comes into play.

The popular press likes anecdotes, and can lead you to try to mimic anecdotes that simply don’t fit your model. And, in search of an easy “positive asymmetry,” you read an anecdote about how company X has created massive value via acquisitions.  You then go to mimic the actions of company X without understanding the strategic context or capability sets company X had to its advantage.

The academic press isn’t much better.  You read an academic study about how, on average, business transformation efforts fail.  This leads you to pooh-pooh the notion of driving big change in your organization.  “There’s too much downside.”  And, yet, the academics have only generalized from a broad set of companies without outlining the real strategic and organizational contexts at play.

So, the popular press can lead you to seek only those moments that “look” like the founding of Facebook; and the academic press can convince you that management initiative has too much downside.  You bog yourself down in “inaction” by taking both anecdotes and statistics too literally.

So what?

We all want more upside than downside. We all want massive “positive asymmetry.” It’s a natural desire. It’s analytically comfortable.  We all want certainty.  But what happens when our search for massive upside leads us to sit out the game? What happens when we choose to do nothing as a rule vs. as a strategy?

We waste time and resources. That’s what.

I once knew a senior business leader who was given a beautiful portfolio of opportunities and the sponsorship to do whatever he wanted. The problem? The guy couldn’t get out of the spreadsheet.  He couldn’t place moderate size bets that might pay off because he kept looking for bets that would only pay off.

He, therefore, did nothing. He destroyed value by stripping away valuable assets and capabilities to meet earnings targets, but never really got off the dime when it came to making possible bets.

He squandered a beautiful opportunity to grow and inspire.

Doing nothing–whether it be with your career, your business unit, or your corporation’s resources–has a cost. It has downside.

And, an easy way to do nothing is to only look for sure things–massive “positive asymmetry” in the bets you place.  In my experience, massive positive asymmetry only exists ex post.  It exists before hand only in some popular press anecdote.  The strategist who achieved it usually knows there was a struggle to get there.

They know what frog lips taste like. Go, kiss a few frogs.

What do you think? 

It’s Your Value Proposition, Stupid!

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The missing link in too many strategies is the master link.

 

Have you ever walked into a store and said “I’m buying brand X because they have the best scientists?”

How about “I’m going to buy this car because the maker has an outstanding leadership development program?”

What about “I’m buying from them because they are going to double the size of the company in 5 years?”

Probably not.

When we are customers, we buy based on a really strange thing called a value proposition. That is to say that we buy something because it is worth more to us than the time and money it takes to (a) buy it in particular and (b) buy it or anything else from someone else in general.  That’s it.  That’s how you win.

The crazy thing, however, is that I see corporate and business strategies spending less than an iota of time defining a true value proposition. They instead tend to focus on internal capabilities or realities and pose them as value propositions.

Have you ever seen this?

“Our strategy is to be great at business to business sales.”

Okay, fine, but does the customer who actually buys from you really care?

“Our strategy is to use our impeccable R&D capabilities to drive innovation.”

Um, maybe, but unless you sell R&D services, the customer doesn’t buy R&D from you, they buy a different product or service.

I’ll leave this one shorter than it needs to be: Your value proposition is what wins you business. Your strategy has to encompass your value proposition. Sure, it can also encompass other competitive advantages like operations, unique skills, or low-cost assets; but if you cannot articulate your value proposition (which may very well be delivered via your competitive advantages) to the customer, then your strategy is probably a waste of space.

Are you wondering why your growth strategy isn’t resulting in growth? Are you struggling to figure out why your customer acquisition strategy isn’t acquiring customers? Are you clueless about why your operations strategy hasn’t given you the boost you expected?

Then, check their links to the value proposition you are delivering to the market.

It’s your value propositions to the customers you hope to serve that determine your success…and too often the customer value proposition is disregarded in favor of some internal, known, but altogether insufficient drivers of success.

Your value proposition is far too often both the master link of your strategy, and the missing link.

Mind your value proposition, stupid.

What do you think?