Your Platitudes Are Showing

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Strategic platitudes can ruin your day.

 

Have a look at these:

“We’re going to be number 1 or number 2 in our markets.”

“We’re going to double the size of the company!”

“We’re going to focus on M&A as our growth driver.”

“We’re going to build a growth engine in our product development department.”

“We’re going to out-compete our competitors.”

Ever hear any of these articulated as “our strategy?”  Probably.  Maybe in your own company, today.

They are the chunks in the chunky soup of management platitudes.  You hear them and their derivatives at all times.

Let’s take them apart…

“We’re going to be number 1 or number 2 in our markets.”

This is a bastardization of an old portfolio management philosophy most famously articulated in the U.S. by General Electric.  It was and is a good one, in my opinion.  But, one cannot confuse a portfolio management philosophy (which is strategy at one level) with a strategic plan for a business.  Yet you hear people ripping off Jack Welch, even today, and claiming it as a strategy for a business.

You want to be number 1 or number 2?  Okay, fine.  How?  That’s where strategy comes in.

“We’re going to double the size of the company!”

This one has been strewn across management thinking in the worst of ways. Put simply, “growth” is not a strategy.  It’s not a strategy for a portfolio and certainly not for a given business.  In fact, anyone who articulates strategy as “we’re going to grow” is only slightly removed from the guy who says his strategy for winning the football game is to “score more points than the opponent.”  It’s a nice notion and definitely a metric, but it isn’t going to determine the concept of your passing or ground game.

 “We’re going to focus on M&A as our growth driver.”

This one is especially dangerous because of the implications it brings with it.  Focusing on M&A as a tool for growth is ok.  It really is.  Plenty of companies allocate capital to acquisitions all day long and book the growth.  But, let’s be clear, acquired growth without a coherent strategic philosophy is a loser’s proposition.  In the 1970’s, AMF Corporation made motorcycles and bowling pins. Its management team walked itself into a non-performing corner by acquiring indiscriminately.  It died a slow death as all of its pieces were sold off in the ’80s and beyond.

M&A as a “strategy” implies that the current business is played out.  It lets management give itself a free pass on growing the existing business. Why would any board allow that?  M&A is not a strategy any more than “sales” is a strategy.  M&A is a tool in the toolkit of an effective management strategist.

“We’re going to build a growth engine in our product development department.”

This one is interesting because it presents a competitive advantage as a strategy.  Competitive advantages are great.  But, they aren’t strategy.  Strategy is direction, focus, resourcing, and value delivery.  Anybody who tells you their strategy is to invest in a competence needs to be asked whether the competence links to actual value delivery.  Building an asset is nice, but remember, an asset delivers cash.

“We’re going to out-compete our competitors.”

I threw this one in there for good measure.  Strategies that assume harder work than the competition are legion.  I mean that.  “Hard work” is not a strategy.  Neither is “focus.”  Yet we see these sorts of platitudes trotted out as components of a strategy.  We are going to work harder than the competition!  Sure, whatever. The competitor is a competitor because they are already in your market. What makes you think it’s a good idea to imply to yourself or your organization that the competition doesn’t work as hard as you?

Strategic management is hard.  To muck it up with low worth slogans and platitudes is to distract from the mission.

What do you do when your platitudes are showing?

 

Strategic synthesis: The art and corruption of brevity

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Pithy management insights have their place—and their perils.

Geoff Wilson

I dig synthesis. I mean, I really enjoy enlivening concepts by making them simple and direct. You say, “I want to have the best service, best product, best operations, and the best brand.” I say, “You want a delighted customer.”

See what I did there? Same concept, synthesized. But synthesis is a Goldilocks proposition: too much and you get burned; too little and you’re left cold. Take the above example. Is it sufficient feedback? I’m not sure. That mostly depends on the leadership team receiving the synthesis.

I know some leadership teams that would take “delighted customer” and turn it into a map of service, product, operations, brand, etc. And I know other leadership teams that would hear “delighted customer” and knuckle down on their customer service function. It’s obvious, right? Customer service is the function that delights customers … right? Wrong.

That’s where synthesis is dangerous. Excess synthesis make you pithy. Pithiness is useful in some contexts. Look at the typical internet meme and you’ll see pithiness writ large. But go too far down the pithy path and you end up at pithy’s dangerous neighbor: glibness.

If synthesis is a beautiful red wine, pithiness is a wine cooler, and glibness is a nasty bottle of Boone’s Farm. Dilettantes guzzle Boone’s until they suffer the consequences. Boone’s is cheap, shallow, and insincere—just like a glib statement.

boones

To wit, I’m struck by a meme that recently passed through my LinkedIn feed. It depicts Simon Sinek and a quote about hiring attributed to him:

sinek-skills

This statement epitomizes glib, dangerous advice. Would you select your surgeon based on demeanor? Or choose a mechanic based on attitude? Of course not.

The advice is so extremely context-driven as to be useless. It’s not pithy, it’s shallow—glib, even. Such thinking may apply to the most basic entry-level or noncritical jobs, but adopting the same philosophy to hire your CFO would not only be moronic but could also put you in jail.

While I’m not trying to disparage Sinek—I don’t even know if he approves of the use of this particular quotation—I am denigrating truthiness in management advice. Sinek, I suspect, may know better. Synthesis is an art of the highest order. It delivers precisely what you need when you need it.

Pithiness is an art, too, but it’s a corruptible one. Pithy bullshit sells. But that same pithy bullshit can also get you in deep trouble. Leaders, strategists, managers, and people of all sorts must be skilled at hearing a pitch, proverb, or proposal and searching for the bones beneath it.

If I tell you to “delight your customer,” you may be able to find the full skeleton of a well-built customer-value proposition. At that point, I may have done my job. But f I tell you to “delight your customer” and you then zero in on only the customer service function, I haven’t done enough. I’ve delivered you a wine cooler when you actually need more wine.

If Sinek tells you to hire for attitude and then teach skills, and you rightly ask how that works when hiring senior software engineers, you have properly looked for the bones that were never there. You’re calling bullshit on a tidy, pithy, pseudo-synthetic glass of glibness. Think Boone’s Farm.

Such swill is from the bottom shelf of management thinking—just like a $2 bottle of “strawberry-flavored citrus wine” (a description that sounds like the recipe for a bad hangover). You can live with a wine cooler now and then, but if you’re swigging Boone’s Farm, you’re in for a rough awakening.

What do you think?

Don’t Forget Your Change

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The focus of strategy should be on what needs to change, but too often, we leave the change behind. 

 

For those of us who still pay in cash, there is the experience of going through a modern checkout line, paying with paper money, and receiving paper money in return from the clerk, while coin-based change is chunked out by an automated machine.

Invariably, this setup requires the clerk to say “Don’t forget your change!”

Why?

Because what used to be a one-part activity (receiving change from a clerk) has now been split into two parts. This post is about not forgetting your change.

…

Allow me to outline two modes of strategic planning.

First is the mode that business owners tend to engage in–let’s just call it owner mode.  Working with owners on strategic planning tends to be very interesting and engaging for someone like me because you can dispense with the pleasantries of multi-constituency narratives and logrolling and just go straight to the spreadsheet.  Private equity firms are my favorites at this. My best private equity clients don’t want the PowerPoint; they want a well-structured and justified to-do list and a spreadsheet that outlines the costs and benefits of the action we came up with.

The same can be said for owner/operators.  A CEO client of mine who happens also to be an owner, when asked by one of his team members, “What do we need to do to start implementing the plan?,” simply said, “Why aren’t you implementing it already?”

While owners want to see justification for change, they only want so much before they put it in place: they want their change, as it were.  Private equity firms and owner/operators derive benefits from and demand near- and long-term changes in performance.

The second mode of strategic planning is manager mode; manager mode is extremely common in companies that are populated by managers who are not…you guessed it…owners.  The manager mode of strategic planning tends to be more status quo oriented, and there’s a reason for that:  current management doesn’t necessarily derive great benefit from explaining to its owners how wrong they have been over the past few years.

Face it, nobody walks into the office every day saying “Today, I’m going to do a bad job.  I’m going to misallocate resources and tamp down our sales culture with massive bureaucracy.  In fact,  I think I’ll demotivate a few people today.”

Nobody says that, not even the worst managers.  Everything happens for a reason (or at least has a story for why it happened), even current structures and processes that really make no sense. So managers tend to focus more of their time on strategic planning and justifying why they are where they are vs. why that should be blown up and rebuilt.  They entertain their boards with creative narratives. They “kill the clock” with their owners and boards so as not to confront hard things. And they build plans that are heavy on narrative but light on change, and this is especially true when it comes to the specificity of change implied in manager-driven plans.

So with those two modes of planning outlined, the enlightened strategist has to understand that effective strategic planning, especially with manager-driven strategic plans, is a two-step process: There is the step of creating the paper plan, and then there’s the step of producing the hard change that will ensure competitive endurance.

So I’ll just leave this with you:

Strategic planning from a manager’s point of view can devolve into an argument for the status quo and why change is hard, while an owner’s point of view tends to ensure a focus on change sooner, faster, and deeper. In every strategic planning exercise, there must be a moment where the planners–whether or not they are owners–put on the owner hat and test for whether recommended changes are sufficient. 

A strategic plan should envision changes to meet challenges.

Don’t forget your change.

 

When Your Story Misses The Point

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Narratives are fantastic…as long as they don’t skirt the point.

 

A couple of nights ago, I had the opportunity to watch the musical Les Misérables in NYC.

This was not the first time I had enjoyed the production.  I have fond memories of seeing the show about 15 years ago in San Francisco.  It was, however, the first time I’ve seen the show since actually reading the expansive and impressive book by Victor Hugo that the musical is based on.

The musical production was outstanding. If you’ve never seen it, it’s well worth your time. The music, the characters, the settings, and the story all combine into a moving experience.

But it got me thinking about something that might be relevant to our strategic management lives.

At the risk of going full literary nerd, I’ll try to keep this short.  Victor Hugo’s novel Les Misérables is a scathing polemic. It is a tour de force that takes apart real social issues of justice (and grace), poverty, class, politics, sanitation, and struggle.  The novelist went to great lengths to describe not only how things were in France, but why they were and perhaps what needed to change. This latter point he rarely takes on directly…leaving it instead to the reader to interpret his often sardonic references to things that just don’t make sense. He used characters to bring his narrative to life. And, he did that well. Hugo’s own words introducing the book show his purpose, and here they are.

So long as there shall exist, by reason of law and custom, a social condemnation, which, in the face of civilization, artificially creates hells on earth, and complicates a destiny that is divine with human fatality; so long as the three problems of the age—the degradation of man by poverty, the ruin of women by starvation, and the dwarfing of childhood by physical and spiritual night—are not solved; so long as, in certain regions, social asphyxia shall be possible; in other words, and from a yet more extended point of view, so long as ignorance and misery remain on earth, books like this cannot be useless.

Victor Hugo had a point.  He had an aim in writing the book (while in exile from his own country, I might add):  Illuminating the often senseless mechanisms of government and culture that conspire to destroy lives.  On some level, his illustrations ring as true today as they did 150+ years ago.

The musical play takes the characters and makes a stunning production–a stunning narrative–out of them, but only touches on the rest of Hugo’s point.  The play takes the characters–who were many ways incidental to Hugo’s point–and makes them the point.  And that ok, but only because one is a book and one is a play.  Which brings us (finally) to the point of this post.

The point…

Narratives–even really beautiful narratives that are moving and exciting and stimulating–can miss the point. This is true for a musical play on Broadway as much as it is for your leadership or business strategy.

The only difference is that people can still get their money’s worth from the Broadway play that is off point from the original work, while your business can run off the rails (and have you run off on  a rail) if you resort to creative narrative that misses your strategic imperative.

What do I mean by that?  Well, let me illustrate a few painfully real examples.

Company 1 has a real financial problem driven by the decline in demand for its products due to a real change in customer preferences. In small group sessions, management knows this reality and calls it out as a crisis.  In forming their creative and stimulating narrative, management buries the reality under a glossy brochure of product leadership, employee engagement, and brand.  The “book” that management writes confronts the issue directly.  The “play” almost buries it.

Company 2 has a clear threat from a much larger company whose product might also be better. In small group sessions management admits that its product might not be up to snuff.  In the narrative delivered to the entire organization, their own “outstanding product” is front and center.  The narrative misses the point of a real need to improve the product–urgently.

These examples are out there every day.  Why is it that more people have seen the play Les Misérables than have likely ever read the book?  Well, it’s because watching the play is easier.  It’s easier to digest and then to go on about your business.

And, that’s a good thing.  It’s the reason we use narratives to communicate strategy.  That’s why engaging employees around a great presentation or video or brochure can actually be effective.

But…

The narrative has to be on point.  The story you form to communicate your strategy must not bury the point. It has to confront the elephants in the room.

I suspect that if Victor Hugo were to magically appear at a production of the musical version of Les Misérables he would be astounded and flattered…and he might see called out implicitly in the play some of the social ills he worked so hard to call out in his book.  But, he would probably also know how much the convenient and entertaining narrative leaves out.

And, sometimes, it’s what you leave out that matters.

I’d love to have your thoughts on this one.

Strategy That’s Liquid At Room Temperature

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Formulating and deploying effective strategy during good times is hard…A few basic practices can help you along.  

 

One of the fascinating things about most people is their ability to rise to the occasion during times of stress.  For many of us, stressful times create focus.  They foster creativity. They engender a competitive edge.

Apply heat to most of us, and we respond well. Crisis cuts through the crap. It liquefies culture and allows it to flow.

Nobody questioned the need to change when responding to the global financial crisis.  Nobody questioned the need to drastically re-think homeland defense following the 9/11 attacks.  Those things, by themselves, liquefied old thinking.

But a crisis shouldn’t–can’t–be the only way to create strong and responsive strategic discipline.  How do you get all of these really good things–focus, creativity, edge, and responsiveness–during times of plenty?

How do you, in short, create a strategy that is liquid at room temperature?

I’ll describe one way that might work for you and that I’ve seen work well in many circumstances. And, I’ll give you one that probably will work but that is the wrong way.

Strategic Search As A Liquefying Agent

The fundamental mindset underlying strategic discipline is search.  A spirit of inquisitiveness–about one’s flaws, one’s strengths, one’s competition, one’s product, and one’s customer–is the spirit of fluidity that strategic discipline requires.

In your organization, you probably need to build periodic search time into the calendar on each of these aspects.  Sure, you can complete a yearly SWOT analysis and get there to some degree (to be clear, a surprising proportion of business leaders don’t even apply that level of periodic discipline). But, a relentless search for the facts in good and bad times is the catalyst of fluid strategy. Why? because without facts and data, you can’t test hypotheses.

So, how do you get there?

One means of getting there is building a strong and ongoing intelligence gathering apparatus. A fatal flaw of too many strategic plans is that they are built upon fact bases that were crammed for the test.  A far, far better approach is to constantly scan and gather competitive and customer data as a matter of course, and to use periodic strategic planning sessions to draw implications from the data, rather than to try to gin up data and implications at the same time. Investing in just a bit of excess capacity to gather and disseminate good business intelligence can be a godsend.

Another means of getting there is to enlist a broader set of people in the search for insight. A typical corporate approach to strategic planning during good times is to gather a few experts and draw on their expertise on the way to an incremental adjustment to the plan.  Let everyone else keep executing because, well, they are busy with good stuff…

The problem with this approach is it tends to confirm the good times and avoids looking for any canaries in the coal mine.  An approach to creating employee, supplier, customer, and other focus groups as critical inputs to strategy on a periodic basis can keep your strategic plan liquid at room temperature.

Finally, the notion of “liquid at room temperature” has to permeate your leadership culture. If your leaders believe that the good times are permanent, they are much more likely to shut down their search for strategic insights before the work is done.  Your leaders have to install search as a fundamental part of their job, vs. a reaction to poor business conditions.

A method to avoid…

That last leadership point brings me to an approach that may work for you, but that is best to avoid.  I’ve been near leadership cultures who use secrecy as a means of manufacturing a crisis mindset.  Leaders were good at masking how good things really were and creating a tense sense of unease among their subordinates…even going so far as to set vastly different performance expectations for subordinates than they set for themselves.  This absolutely created liquidity and creativity when it came to strategic search…

…but it’s an approach that, put simply, lacks integrity.  Now, if you are the shareholder of your business, you may do as you like. However, if you rely on fooling people into a false sense of insecurity, it will eventually come around to bite you.

To wit: the best example of this is when subordinates, spun up into a sense of crisis by goals that they have to attain in order to meet highly inflated “false crisis” metrics, create and recommend options that senior management never seems to act on (because senior management doesn’t have the same compensation metrics and knows that their own life is good).  They conduct a frantic search for options, senior management cherry picks a few and disregards the rest, and subordinates are left to wonder why their superiors don’t share their own sense of urgency–given to them by their superiors.

Do that for a few cycles and people will catch on.

Creating strategy that is liquid at room temperature requires a leadership culture that engenders search, and that builds search into the very fabric of strategic management processes.

Feel free to comment on this below…

 

About That Horse You Rode In On…

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What’s your second act?

 

In 2001, at the time of the 9/11 attacks, it’s arguable that Delta Airlines was sitting in the best position of any other airline in the industry.  With a strong balance sheet and strong industry positioning, Delta was arguably best positioned to weather the impending shocks to air travel that 9/11 would bring.  Only the world changed even more than a strong balance sheet would cover…and Delta’s longstanding brand and culture were forced into bankruptcy.

You could call it a lack of agility.  I might call it a lack of awareness.  The company had seen many changes to airport security and customer mindsets before and was in a strong position.  Its leaders probably didn’t think they needed to change all that much…and that inertia was fatal. Delta’s leaders knew where they were, but failed to understand that how they worked would not work in the new world.

So, as for you: You may know where you are.  You might have a view of your “strategic context.” That’s usually the starting point of a solid strategic plan…assessment of where you are today. The tools are legion: SWOT, MACS, SCP, etc. etc. etc.  Call me, I’ll probably be able to name a few more.

But, strategy isn’t about the tools, it’s about knowing what you want to BE and finding out what you are going DO in order to BE that thing in the future. In other words, it’s about figuring out what the future requires and getting to it.  Having a vision for where you want (or need) to be is all the more important if the world is changing quickly.

So, if you are like the average executive, you’ve probably figured out a play that you run for success. You probably have a routine, an approach to leading people, and a default set of questions you ask…no matter the context.  And, just like the average executive, you probably really can’t figure out how to change your routine.

I’ve got bad news for you…The horse you rode in on is probably tired.

You need a new horse.

So, how do you do find it?

As an individual executive you have to find a source of renewal.  You have to be able to look at the world and try new things.  It’s not a bad thing, and it might even keep you young. That guy who won’t shut up about something new he wants to try?  He might be your key to flexing your muscles a bit.  That advisor who just might have a new idea or two, perhaps you should listen to her.

Organizations are different, and in some ways harder to cause to switch horses. Why?  Well, put simply, they are a collection of individuals.  If it’s hard to get an individual to change, then that level of difficulty is compounded in organizations.  Some executives might be energized to change at one point, while others are not…the whole organization, then, starts to look like a slow speed traffic jam…where some executives are speeding up while others are coming to a stop.

What to do? Half the battle is admitting it. The other half is being thoughtful about how much horse you really have left, and what your next horse really needs to look like.  In our practice, we take the time to listen to the context of an organization before working with our clients on the next step.  If the next step means a new horse, it’s certainly important to know the rider’s style of riding.  Otherwise, the attempt to switch horses will fail.

I encourage you to think about where you are, and (if indicated) be proud of what got you here. But, I encourage you to realize that the horse you rode in on is probably tired.  The chances of that are much higher if you are in a rapidly changing (or shocked) sector.

One thing is certain: the world is change.  That horse you really liked is probably going to mature and decline.  That is true whether the horse is a business, a technology, or even a set of management practices.

You need fresh horses.

Be willing to get help looking for them.

What do you think?  Have you ever seen an organization run out of horse? 

Technology – Putting the Cuss in Customer Experience

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Why technology is indirectly stressing our customer service experience

 

The other day, while waiting for my prescription to be filled, I was subjected to one side of a heated phone conversation. A clearly frustrated lady was yelling at some poor person over the phone because her credit card had been denied; after several minutes, it transpired there was in fact nothing wrong with the card. As consumers, our expectations these days are high and our patience is low, and the same situation is also evident in the workplace. How many times in the last week have you heard someone complain about their job or their coworkers?  Happy workers seem to be the exception rather than the norm.

That got my brain ticking. Why is this, and what does it all mean?

I believe that technology is the root cause. Let me elaborate.

The prevalence of technology in our lives means that we are always ”on,” and this drives the expectation of instant results with minimum effort. Heck, you can even order a pizza with an emoji these days—pepperoni is only one click away. The speed of life in the developing world is beyond warp.

At the same time, we have become increasingly preoccupied with ourselves. Much has been written about the “me” culture and the incredible sense of entitlement that prevails. Social media has fueled this, providing an outlet for our narcissism and validation that the world does indeed feel we are worthy. This has to have an impact on our levels of tolerance and patience.

So there you have it—empowered consumers who expect instant, high-quality products and services; if they don’t receive them, they will let everyone know, and then take their business elsewhere.

Now let’s look at the business side. Thanks to technology, the pace and level of competition are now at record levels in many markets, and to stay afloat, businesses often have to become lean and mean. This inevitably means employees have fewer resources, greater workloads, and pressure to deliver.

What’s the impact?  You have to believe this affects levels of customer service. And do you see where this is going? Disgruntled employees meet demanding customers—it’s a powder keg.

So what can we do?  I believe there are small things we can do. As a consumer, a little empathy can go a long way. If you encounter a frazzled employee, instead of sharing your mind, share a few kind words, maybe wish them a pleasant day. If nothing else, it might just blow the person’s mind. As an employer, remember that your employees are human too. Small, genuine acts to show your appreciation can do a lot to build trust and loyalty. For example, a monthly pizza lunch can do wonders for team morale. And don’t forget, that pizza is only an emoji away.

What do you think?  Share your comments.

When The Spin Stops

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Reality bites.  It bites a lot harder when you avoid it through spin and hyperbole. 

 

The Wall Street Journal reported this week that Theranos CEO and majority owner Elizabeth Holmes is under threat of major government sanction including a personal multi-year ban from the lab testing industry.

Holmes, a darling of the “unicorn” hype machine and a manufactured pop culture executive with outstanding political connections, has given every indication over the past 6 months that she is dedicated to a culture of spin to keep her venture going.

One need only look at the preceding and succeeding headlines of the piling on media tempest to see the realities of a spin machine undergoing a slow-motion train wreck.

First, the hype focuses on Holmes herself–she has an interesting story, and she makes for good press: College dropout, new technology, black turtleneck, mysterious company.

“This Woman Invented a Way to Run 30 Lab Tests on Only One Drop of Blood” – February 18, 2014

“This CEO Is Out For Blood” – June 12, 2014

Then, there is an expose’ about how the company’s technology might not actually work.

“Hot Startup Theranos Has Struggled With Its Blood-Test Technology” – October 16, 2015

That is followed by the righteous indignation of the company and its founder.

“Elizabeth Holmes Slams Theranos Critics” – October 21, 2015

But then people start to get wise.

“The Cautionary Tale of Theranos: Beware Runaway Stories” – November 15, 2015

And individuals start to question the overall honesty of the enterprise and its founders.

“How Theranos Misled Me” – December 17, 2015

“Could Theranos Go From Unicorn to Unicorpse?” January 28, 2016

“Theranos Sounded Too Good To Be True And It is” – February 2, 2016

“Study of Theranos Medical Tests Finds Irregular Results” – March 28, 2016

“Theranos wasn’t forthcoming” – April 14, 2016

Finally, as was published this week, regulatory authorities come into the picture, and in the case of Theranos, it wasn’t pretty.  In a tersely worded letter, Centers for Medicare and Medicaid Services (CMS) officials basically told Theranos and Holmes that they are about to get the death penalty.

You can’t spin your way out of that one.  That’s when the spin stops.

So who cares about this?

Well, you should.  You probably work with people who aren’t exactly forthcoming about things that really matter.  You know them–they’re the ones who lead organizations by expounding on ethics but whose honesty and integrity are known to have more holes than Swiss cheese by those who have worked with them.

Those types have the cardinal virtue of likability, which ropes people in with narrative and story and can actually hold quite a portion of the world in thrall.  But narrative can’t overcome a lack of substance forever, and that is what the Theranos story shows.

The Theranos case also illustrates something more general.  Theranos is a high-profile, high-growth, “disruption”-oriented company.  Such companies come with a healthy dose of optimism because they are founded on the principle of swimming upstream.

But…there is a boundary in strategic thought that defines the difference between optimism and spin.  It’s the boundary between honesty and dishonesty and is usually defined by a few markers.

First is personality vs. performance – if you find that the focus of a business strategy is on the charisma and glibness of the organization’s leaders vs. actually confronting performance issues, you probably have a spin problem. A charismatic leader is a great thing, but it can’t be the only thing.

Second is story vs. strategy – if you find that the focus is constantly on getting your story straight vs. actually addressing the merits of the strategy, you probably have a spin problem. This includes an overweening focus on what not to show others (management, boards, investors, the press).  The more you have to artfully conceal–especially from fellow insiders–the more you are probably in the spin zone.

Finally is attacking vs. listening – If you find that your leaders, or the leaders you’ve hired, resort to the classic ad hominem approach when criticized, then you probably have a spin problem.  Somebody questions the numbers and suddenly becomes a “jerk.”  Somebody else brings up an issue with the logic of a strategy and is discredited as “academic.” Yet another person calls into question the sustainability of a company and simply isn’t around at the next meeting. They are attacked, whereas a sound culture listens and responds.  Elizabeth Holmes, in the case above, decided that it would be a good strategy to attack a two-time Pulitzer Prize winning journalist at the Wall Street Journal as publishing baseless trip.  There’s a certain arrogance in that.

These markers all form the boundary between basic optimism (a good thing) and basic spin (a bad thing). They all demarcate boundaries between healthy and sick cultures.

If you look at the Theranos case, you can see failure on all three markers.

What happens when you look at your own culture?  What about your own leadership style?  What side of the boundary are you on?

What happens to you when the spin stops?

It’s All Moneyball…

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The search for value is the key to strategy.

 

Michael Lewis’s Moneyball never did provide the answer to the question of where value is in our own lives, but it certainly inspired us to look.

Remember Moneyball?

It was a book by Michael Lewis… a guy who has made a career out of taking mundane subjects (like bond trading, high frequency stock trading, left tackles, and baseball scouting) and making them imminently interesting by melding fantastic stories around the topics.  You may have recently seen one of his works come to the big screen in The Big Short.

Moneyball was Lewis’ take on the search for value and the need to avoid “conventional” wisdom…especially when one faces constraints that conventional thinkers do not.  the story was simple: The Oakland A’s were an anomaly.  They won more games than they were supposed to when their payroll was factored in.  That’s right… dollars in, wins out was considered to be the metric.  Why?  Because all scouts were assumed to be looking at the same components of talent: a traditional view of the “tools” that ballplayers had been evaluated on for years.

Only something happened…someone, somewhere realized that the value of a ballplayers in terms of the game itself wasn’t necessarily correlated with the old school way of looking at things.  Turns out that players who were unorthodox when measured by traditional metrics but really effective at doing things that got them on base more often were actually undervalued by those who scouted and paid ballplayers.

In other words, a key trait was undervalued in the market, and a team like the Oakland A’s that would focus on that trait could find valuable ballplayers with a lower pricetag.  That translated to wins for fewer dollars.

This insight is brilliant for anyone in business: When everybody else is paying for traits, it’s good to try to pay for results.

This is true for my friends who pay up for educational pedigrees that don’t translate to results.

It’s also true for my friends who go after market trends because they are “hot.”  Anytime there is a clear stampede to something, ask yourself why. Is there value left in the equation?

In a world of hype and conventional wisdom, have the patience to seek value.

What do you think?

Why I Don’t Believe In Recruiters

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Recruiters are tools…on every level.

 

In case you haven’t noticed, I have a modest disdain for consultants and professionals who come from the “say anything” philosophy of life; I wrote on that here. Spin is a bad thing, confronting the elephants in the room is a good thing, and it’s really that simple.  In this case, I’m going to take it to a whole new level of hate, but that’s just in the spirit of keeping it real.

The title of this article is an homage of sorts to an aggressively atheist song by Art Alexakis of the band Everclear titled “Why I Don’t Believe in God.” In that lyric, Alexakis recounts scenes from a troubled childhood that sapped his ability to believe in anything related to God.  It’s one of those challenging thoughts that we all need at times:  Is our hatred of something related to bad people and experiences or related to a really bad game?

In this case, I’m going to hate on the game, and the players get their dose as well–all based on my subjective experience.

Sometime around 1995, I was deeply entrenched in an upper division football program at my university (yes, mine!). For anyone who doesn’t know, college football is all about the ability to recruit top talent.  “It ain’t the x’s and the o’s, it’s the Jimmys and the Joes” is how it’s been put in one form or another for a long time–meaning a great team comprises great players, no matter the scheme.

In that world, recruiting matters deeply.  Finding the right talent and convincing “it” to come to your football program are the two foundational moves of a healthy program.  It’s not the only thing, but it’s close.

So, one evening at dinner with the team, one of the assistant football coaches gets up from the table and says bluntly, “I need to go lie to some kids.”

He meant, of course, that he needed to go make the telephone calls to budding high school stars that assistant coaches were obliged to make. He needed to go “lie to some kids” about their ability to be better than the incumbent players, right away and on their way to stardom right now. Oh, and by the way, we really care about you and would never try to over-recruit your talent while you’re playing for us.  Just sign on the line, and forget about those other programs.

It was a thoroughly funny statement at the time.  After all, we were all elite players in a good program who had made our choices. In that world, it is the rare player who leaves a team.  And we liked this coach.  But, wow, the truth.

Fast forward 15 years, and that same group of budding football stars is now met with a plethora of headhunters.  The interesting part is that the recruiting pitch is hardly any different. “We have opportunities here.” “The career advancement potential is outstanding.” “The prior guys just didn’t have the horsepower.” “The company is on the upswing.” “We have no internal talent to fill this role.” “The prior fella just left to pursue other opportunities.” You know the drill–lie to some kids.  Only, in this case, it’s “stroke seasoned professionals with a shaded version of reality that could be construed as misleading.”

So, what happens?  Well, two things.  First, the headhunter gets paid, and second, you take the role and, as they say in the auto business, your mileage varies.  Recruiters, like stock touts and sports agents, have almost no stake in your success; their stake is in your decision.  Always be careful when dealing with anyone who only cares about your decision and not your health or success.

So, now we are down to it: Why I don’t believe in recruiters and what to do about it.

I don’t believe in recruiters because I believe the agency issues are real.  They have an incentive to lie, distort, and cheat to convince both sides of a transaction that the placement is good.  And they are doing it at the individual level; they are dealing with lives. The worst among them are no better than a Boiler Room broker dialing for dollars, except in this case, it’s dealing with entire livelihoods, not just components of someone’s savings.  The best among them know that score and go to work feeling icky every day.

Oooh, lie, distort, cheat?  Those are big, bad words, aren’t they? Well, yes, but just like Art Alexakis’s lyric on disbelieving, it’s my experience that leads me to the thought.  I have been on the client side, the candidate side, and  the observer side of headhunter transactions.  I have also witnessed the most corrupt personal ethics from individuals steeped in this profession.

That’s why I don’t believe in recruiters.

So, what is a corporate executive to do about it?

Well, the most important thing to know is that your best talent prospects already know everything I just wrote above.  They won’t be fooled by the players or the game.  You need to get ahead of that if you, in fact, have a great opportunity for them. Every recruiter from LA to New York will have already tried to pry them from their current roles with promises of candy canes and jelly beans.  You need to cut the crap and tell them why yours is the place to be.  Stop relying on recruiters; everybody knows they’re salespeople.  Sell the virtues of your company from the inside–don’t outsource it.

The second thing is to use recruiters for what they are: Market makers. They are exceptionally valuable in that role.  They are tools in your toolkit.

The third thing is to be aware of the perverse tendency of really great headhunters to embed and distort talent needs.  I’ve never met a headhunter who was good at assessing whether a company actually needed a certain type of talent.  I’ve also never met a headhunter who really wanted to know the company’s talent landscape; that’s the company’s job. But I have met really great relationship recruiters who convince executives that they are strategic partners. Here’s the test for you: How many times have your recruiters asked you to assess your internal people’s resumes (no ethical recruiter would try to share a client’s talent with their other clients, right?) to compare to the external candidates you are hiring? Very rarely, I’ll bet.

This post is all about the tendency of a certain professional niche to produce people and actions of questionable moral caliber. If you know this, and ensure that you are sufficiently isolated from it, you can make use of professional recruiters in the right way.  If not, you’ll just be another heavily stroked senior executive who was fooled by the game. Use recruiters, but don’t let them represent you.

Recruiters are tools…on every level.