Art Petty on Management

From Imperial Court to Learning Organization

Today’s post was stimulated by a great article in the July/August 2008 Harvard Business Review, The Competitive Imperative of Learning, where Professor Amy Edmonson of Harvard Business School outlines the differences between organizations that focus on execution as efficiency—doing things better and faster than your competition versus execution as learning—focusing on learning and adapting faster.

In brief, Professor Edmonson compares and contrasts the approaches used in the traditional industrial age model of motivation and performance evaluation processes versus those required for today’s knowledge-worker dominated organizations.  The approaches required for success in the two models are dramatically different.

In the Execution as Efficiency model, Professor Edmonson indicates that leaders provide answers, employees follow directions and optimal work processes are designed and set up in advance.  In the Execution as Learning model, leaders set direction and articulate the mission, employees discover the answers and work processes are highly fluid, adapting at the speed of organizational learning.

Practical Applications: A lot of Executive Talk, but...

When it comes to driving change, words and actions must match. Few organizations are immune to the massive forces constantly reshaping the world around us, and few organizations can afford to live solely by the Execution as Efficiency model.  We live and work in a world increasingly dominated by knowledge workers, and while one part of an organization may be dominated by an efficiency orientation, other areas, marketing, sales, research and development, must move towards a learning approach or face dire consequences in the marketplace. 

In my own experience working with organizations that have grown up with an emphasis on efficiency but are talking about the need to become more flexible and adaptable, it is often the people doing the talking that are serving as the barriers to change by failing to revamp outmoded systems and processes.

Five Barriers that Get In the Way of Developing a Learning Organization:

1. The Imperial CEO and Royal Executives: A class system that puts undue weight on the import of executives.  Instead of the executives serving the organization, it seems like the organization exists to serve the executives.
2. Strategy by Edict and Set According to the Calendar: Every year at about the same time, the organization stops and waits while the royal court sits behind closed doors working out the new organizational structure and lofty statements that provide the masses inspiration to work hard until they receive fresh inspiration next year.
3. Strategy by Default: “We have a strategy, and it’s to sell more,” is a commonly heard phrase in this tuned-out environment.   Another is, “Strategy is for the big boys, and we’re too small to worry about anything other than doing our jobs.”
4. People as Expenses: the words coming from the mouths of executives might be saying “People are our most important asset,” but the systems supporting the identification, development and retention of talent are saying, “People are our biggest cost.”
5. The Functional Structure: specialization works in some areas, but in general, the silo structure of many/most orientations is the greatest impediment to shared learning.  While the phrase, “we’re all in sales” is commonly shouted by salespeople frustrated with the lack of organizational support, the fact is that, “marketing is truly too important to be left to just the marketing department.” 

What to Do If Your Organization Needs to Learn:

• Take the royalty out of the royal court.  This culture shift has to start at the top—the non-CEO Chairman of the Board and the other independent board members have to step up and overthrow the caste system and monarchy that pervades so many executive environments.

• Recognize and act on strategy as a process that involves everyone.  (I’ve posted on this one seemingly a thousand times, so I’ll spare you the details and direct you to the Strategy category on this blog.)

• A robust execution process with plenty of accountability and constant evaluation of performance and consideration of lessons learned is the fastest way to pump up organizational learning.

• Make the identification, development and retention of talent the job of every manager or supervisor in the organization.  Challenge HR to create systems to support these activities and start living up to the notion that people are your greatest assets.

• Break down the walls by at least moving towards a strong matrix or a project environment for major initiatives.  Cease and desist with throwing initiatives over silo walls, and build a project culture with the charter to execute and to educate the organization on lessons learned.

The Bottom-Line for Now:

It’s time to quit talking about becoming a learning organization and start knocking down the time worn conventions, institutions and processes that stand in your organization's way.  In an ideal world, this change starts at the top with an insightful leader or leadership team that understand what it takes to move from an efficiency orientation to a learning focus.  In reality, a lot of this change will need to be driven by leaders in the middle that clearly see what is happening in the external environment as well as what it takes to win in that environment.  If necessary, let the royals executives posture and play while you go about the business of changing the business one initiative at a time.

Teaching a Senior Team To Dance With Leadership Development

I am encouraged by the number and the quality of the discussions that I am having with top executives about "how" to create a more effective leadership development culture.  Moving beyond the "why" to the "how" is definitely progress in the right direction. 

There are a number of common themes and pain points that I hear and observe in organizations seeking to improve in this area:

• A recognition on the part of top management that realizing sustained growth over a period of time will require a consistent infusion of new talent, especially in leadership.

• The recognition that current ad hoc and silo approaches to leadership development have not worked, and in some cases have resulted in misfires, misplacements and damage to the business.

• Frustration on the part of the CEO over the lack of results on this topic from his or her senior leadership team.  (Note: this is often representative of a bigger communication, collaboration, team, trust issue than just leadership development.)

• Lack of clarity on how to get started on improving leadership development effectiveness.

My Suggestions: The First Eight Steps to Mastering the Leadership Development Dance:

1. Moving from poor to good or great at leadership development will take time and attention.  Be realistic in setting your expectations, as this is an evolutionary process.  If necessary, consider qualified outside counsel to help you structure your program and to help keep the team on track.

2. Leadership development is the CEO's priority...but everyone's job.  Identify leadership development as a strategic priority with your leadership team and develop your collective thoughts on this topic just as you would a potential new product development or a prospective acquisition.  It is imperative that the senior leadership team view this effort not as a task to be completed, but as an on-going process for all leaders at all levels.

3. Ensure that accountability for leadership development is spread across the leadership team...not just deposited in HR's lap. (Ram Charan, writing in Leaders at All Levels, suggests making HR the Trustee of leadership development, not the sole responsible party.  I like Ram's approach and his book is filled with great ideas for any leadership team moving down this path.) Accountability means ensuring that your senior leaders are aligned around leadership development objectives with clear performance metrics and compensation incentives.

4. Establish a baseline for current practices.  A good adviser will be able to help you identify and evaluate your current performance against key best practices.  The best practices are intuitive and focus on evaluating the existence and maturity of activities for identifying talent, providing developmental opportunities, evaluating progress and performance, delivering timely, candid feedback etc.  This baseline will help you monitor and reevaluate your organization's progress over time.

5. Establish your collective (not silo or functional) criteria for the type of leaders and the type of talent you expect to need in the future.  Easy to write...but a thought-provoking and challenging assignment.  Note: you will need to re-evaluate your criteria over time based on changing forces and strategies.

6. Based on your criteria, the leadership team will need to parse through all available talent to assess needs, gaps and the depth and breadth of the current talent pool.  Again, easy to describe, but a challenging task to complete.

7. Create developmental assignments for existing high-potential talent and begin the process of filling gaps through external recruiting.  Ensure that the senior leaders understand and act on their role as mentors, coaches and shepherds of the talent development process.

8. Constantly evaluate progress and performance and constantly reassess the performance of your high potential individuals.   You will need to redefine your criteria for evaluating progress based on how individuals perform in various roles, and you should definitely re-evaluate your talent pool based on the results.  A high potential at one level may struggle at another, and vice versa.

The Bottom-line for Now

With the intent of being redundant the steps above are easy to write and very challenging to implement.  There is no silver bullet for creating an effective leadership culture, but there is a straightforward formula: focus, time and discipline.  And of course, practice, practice and more practice.  How well does your senior team dance when it comes to leadership development?

Ironically, Mid-Level Managers May Save Your Business

Ever since terms like reengineering, right sizing and downsizing became part of the corporate lexicon; midlevel managers have been taking it on the chin.  This once populous class has been synergized and right-sized almost to extinction.  Those that remain often struggle with spans of control as wide as the Golden Gate Bridge and limited authority that is constantly challenged from above and below.  I find it just a bit ironic (and appropriate) that this much-abused class of leader may just hold the key to surviving and prospering in tough times.

In a great article in the July 7. 2008 Wall Street Journal, entitled: In Search of Growth Leaders, authors Carr, Liedtka, Rosen and Wiltbank offer the results of their multi-year study of the role that midlevel managers play in fueling organic growth.  Their conclusion: "most companies have managers who can turbo charge results.  The trick is finding—and nurturing—them.  Read the article for some great insights on finding and developing these critical midlevel leaders. (And read my post: Management By Jane: Leading Effectively from the Middle for some additional thoughts.)

The Power of Great Managers in the Middle:

• Appropriately trained and armed, midlevel managers are directly focusing on strategy execution—they lead the teams that do the work that drives performance. If your organization is failing to execute on strategic objectives, look to the middle, not to place blame, but to identify what you can do better to help your managers succeed.

• As the article authors highlight, a tremendous amount of innovation comes from the middle.  In my own experience, the managers that fuel innovation are the ones that are relentless about creating the right conditions for their associates to succeed.   Breaking down barriers and taking the heat for bending the rules are common and comfortable tasks of the innovative midlevel manager.

• The most important talent scouts and developers are often found in the middle of organizations.  The savvy manager recognizes the import of identifying and developing emerging leaders, competent role players and potentially brilliant individual contributors. While top management might want the organization to become good at this talent scouting and development, like strategy execution, the majority of the heavy lifting takes place in the middle.

Five Ideas to Strengthen Your Support and Success In the Middle:

1. Change your perspective on the midlevel management layer.  Instead of looking
at the organization chart and seeing cost to be minimized or taken out, look at this group as resources to enable strategy execution, fuel innovation and scout and develop talent.  Quit broadening spans of control to the point of ridiculousness, and begin setting goals around strategy, innovation and development, and suddenly the cost perspective starts melting away.

2. Involve midlevel managers in strategy formulation...not just in rubber-stamping the strategy formulated by executives.  Remember, the people in the middle likely understand your customers and your organization's capabilities at a much more detailed level than those of you with V's or C's in your title.

3. Create systems to help midlevel managers experiment with and implement new ideas.  Provide key managers and manager groups with executive sponsors charged with cutting through corporate clutter to help get things done.

4. Reward successes, provide visibility and learn from misfires.  Easy words to write and speak, but realizing this environment takes discipline. 

5. Recognize the fact that new classes of virtual leaders...Project Managers and Product Managers have emerged over the past two decades to replace the former middle level.  These critical positions often carry tremendous responsibility burdens with little real authority across functional boundaries.  If these positions exist in your organizations, strive to create the sponsors, systems and infrastructure to allow them to perform.

6. As an executive, get over yourself.  No one said that you are required to have all of the answers.  It's a sign of strength, not weakness if you are emotionally secure and intelligent enough to recognize that your strength comes from your ability to get the best from willing contributors. Take the time to invest in reinventing your leadership style.

The Bottom-Line for Now:

The article referenced above is must reading for every executive looking to solve the challenges of how to fuel organic growth.  Innovation doesn't occur on command, and while good accidents happen (e.g. think 3M and Post-Its), hope as we all know is a lousy strategy. 

I teach, train and support midlevel managers in all forms of organizations and by and large, I find them generally miserable about their tasks and their ability to positively impact their organization.  The majority of their frustration stems from working for leaders that succeed in stifling the conditions required for innovation and execution to flourish.  The opportunity is in the middle...not the problem.  For the source of the problem, take a long, hard look in the mirror. 

Can You Create A Mission-Driven Focus in a For-Profit Business?

Leaders from the top on down in Not-For-Profits hold an unfair advantage over their erstwhile counterparts in the For-Profit world.  Managers in Not-for-Profit are driven by a powerful sense of purpose that delivers meaning and context for even the most mundane of activities.  As one young Not-For-Profit manager in my recent Leadership Mastery workshop indicated, "I can't imagine not having the mission to inspire and energize me everyday." 

My question: Can For-Profit organizations replicate the motivational and contextual power of "The Mission" through other proxies like goals, strategies, bonuses and targets all focused around competitors, financials and metrics like market-share and compound annual growth rate?  

My short-answer: It's hard to simulate a mission and develop a sense of purpose in an environment focused on issues that are significantly more mundane than human welfare.  Difficult, but not impossible.  I'll explore some ideas for this below. 

First, a sidebar on my observations about leading in Not-For –Profit:

Having spent my entire career in the For-Profit world, I learn something every time I have the good fortune to work with the dedicated professionals that staff and lead the organizations that do so much good in our communities.  It's refreshing to work with people laser-focused on serving their customers and motivated by the belief that they are making a tangible difference everyday. 

I have also been impressed by the level of leadership maturity and sophistication that I see in the younger leaders in these organizations.  Many Not-For-Profits run on volunteer workforces, and honing great leadership skills at a young age is a survival skill for a manager in this environment.  The sophistication and good practices that I have seen displayed by managers with less than five years experience are impressive.  Important habits and concepts including professional development, goal-setting, providing feedback and establishing genuine connections are well understood and readily applied by many of these young leaders. 

Last and not least, it's hard to look at the good work being done in many Not-For-Profits and not acknowledge that these dedicated and capable leaders might earn considerably more money if they were plying their profession in a profit-driven organization.  The skills that they are developing and honing are the very skills critically needed by almost every organization attempting to grow and win in the market.  And yet in many cases, the lure of money is not a driving force for those serving in Not-For-Profit.

What For-Profit Leaders Can Learn from Their Mission-Driven Counterparts:

• People thrive and commit when they feel a greater sense of purpose in their activities.  Leaders in For-Profits must strive to connect the firm's activities and offerings to the benefits that they provide to customers.  Even seemingly mundane offerings contribute to improving someone's life, making hard tasks easier or solving other problems.  Leaders must connect the dots between these benefits and an employee's reason-for-being.

• Mission statements should not be a gobbledygook of pie-in-the-sky motivations, but rather, brief, meaningful descriptions of the reason-for-being of an organization.  Additionally, instead of the poster on the wall proclaiming the lame mission, the content and context of this mission should be taught, reinforced and referenced liberally.  Just like corporate values, statements of mission are useless unless practiced and ultimately embedded in the organization's DNA.

• Leaders should ply their trade as if they are operating with a volunteer workforce. Imagine having to walk in the door everyday and reach out to your employees, support their professional development, provide them with timely feedback, encourage them to strive for new levels and help them find the lessons-learned from mistakes.  Armed with the context of "my workers are volunteers and it is my job to keep them happy, motivated, learning and here," I suspect that many leaders will suddenly discover their true priorities.

• Just as people require context and purpose to do their best work, they tend to thrive in environments where success breeds more success and big, new challenges are viewed as great new opportunities.  In my informal polling of several hundred managers over the past few months, I have only found a handful that feel as if they've been a part of a high-performance team at some point in their careers.  What a shame.  I suspect that most leaders don't preoccupy on the notion that their goal is to create an environment that results in a high-performance team....one that is highly innovative or one that is operationally excellent (or both).  Not-For-Profit leaders understand that the mission will only be successful if the team gets it right, and they naturally focus on the tasks needed to support team development. 

• Many (not all) Not-For-Profit leaders stay close to their mission by working with and serving their clients in the community.  Sometimes out of necessity and other times out of the sheer joy of serving, this is an outstanding way of staying Tuned- In to customers.  For-Profit leaders would be well served to push away from the desk and spend some time helping and learning from their customers. 

The Bottom-Line for Now:

Working in Not-For-Profit may not be for everyone, and in fact, while I've painted a picture with the positives that I have observed, there are many familiar challenges as well.  Large organizations struggle with politics and bureaucracy, "lifers" suffer from chronic "We've always done it this way," and turnover and burnout are common maladies plaguing many organizations. 

However, in spite of overwhelming challenges and never-ending pursuit of funding, many of these organizations persevere, in large part due to the incredible dedication of the people working and leading at all levels.  Most For-Profit environments lack the sense of purpose and mission that I've observed in Not-For-Profits, yet managers everywhere have the same set of tools at their disposal.  For-Profit leaders are well served to take a few tips from their lower-paid and in many cases, more effective counterparts. 

The Project Management Discipline of Strategy Execution

A number of months ago, I wrote about the benefit of applying professional project management practices to help improve strategy execution (Struggling with Strategy? Think Project Management).  While many view strategy as something that is transformational (and it often is), the fact is that an organization moves from where it is today to where it has decided to go one project at a time...like a football team marching down the field on a long-drive.

In the June, 2008 Harvard Business Review, in an article entitled The Secrets to Successful Strategy Execution, Gary Neilson, Karla Martin and Elizabeth Powers add considerably to the body of knowledge on strategy execution, with this excellent article, backed by a considerable amount of research gained in surveys of over 1,000 organizations.  Their findings seem to support their thesis that: "enterprises fail at execution because they go straight to structural reorganization and neglect the most powerful drivers of effectiveness—decision rights and information flows."

A few key findings covered in the article:

• Employees at three out of five companies rated their organization weak at execution.  (Asked: Are Important strategic and operational decisions quickly translated into action?)

• The number one rated trait (by a landslide) that makes organizations effective at implementing strategy: Everyone has a good idea of the decisions and actions for which one is responsible.

• Of the top eight traits (17 were identified), five were tied to having effective and timely information flows and three were related to decision rights.

• Structure as an effective trait for driving strategy execution did not hit the  list until number 13, with a relatively low strength index rating. 

Fascinating. It's important to see a large body of research dedicated to the execution issue and it is a great learning experience to see how valuable information flows and decision rights are to successful strategy execution.

Additional Thoughts on Strategy Execution:

Structural changes, properly implemented at the right time and for the right reasons can go a long way towards addressing and improving the information flow, decision rights and collaboration issues that are so critical to strategy execution.  Don't write off structure as a powerful tool in strategy execution,  however as the authors highlight, don't jump to structure as the solution.  It's one part of many pieces to the solution.

Back to my strategy execution as project management thesis, the best performing project teams are characterized by clear structure, unambiguous roles, detailed communication plans and clear accountability for decisions and results.  Top notch Project Managers ride herd on these issues, seeking out points of confusion or gaps in information flows and fixing them in process.  

The fact that the authors are able to cite as a research finding that 3 out of 5 surveyed managers believe that their organizations do not quickly translate strategic priorities into action tells me that most of those organizations have not adopted a robust project management discipline for strategy execution. And while strategy is arguably more complicated than creating a new product or constructing a building, it is very possible to structure and manage your execution program using the same approaches. 

The bottom-line (for now):

Strategy execution is where value is created.  The best plans are worthless unless they are backed by a group of people that understand their roles and accountabilities and that have the information they need when they need for rapid decision-making.  Execution never takes place in a straight line and without setbacks.  In fact, the setbacks are powerful learning experiences that a good team will leverage as it adapts and responds to internal and external factors.

A large part of the solution in my opinion is treating execution like a high-order program comprised of a series of projects to be managed.  Ask a good Project Manager how to successfully pull of an execution program and I suspect they won't need to interview 1,000 companies. 

Yeah, "Why Don't Managers Think Deeply?"

There's an interesting post today in the Harvard Business Review Working Knowledge newsletter entitled "Why Don't Managers Think Deeply?"

Professor James Heskett highlights GE CEO Geoffrey Immelt's recent pronouncements that he is: looking for managers to think deeply about innovations that will ensure GE's longer-term success. He has vowed that he will protect those working on the breakthroughs from the "budget slashers" focused on short-term success.  (Professor Heskett also reviews the book Marketing Metaphoria and the perspectives of the authors: Gerald and Lindsay Zaltman on why managers don't think deeply.)

As I leader, I've wrestled with this topic for years, and have worked around and with many individuals perfectly content to let their days unfold in a transactional nature, with no time to think deeply or even strategically.  Days pass into months and months to years, and still these individuals prefer conquering the issue of the moment versus wondering whether they are even working on the right issues.

I look forward to learning more about what the Zaltmans have to say about this issue above and beyond what Professor Heskett highlights in his post when I read their book. For now, here are a few of my perspectives on why managers don't think deeply:

• Personal characteristics: some people are not great strategists but excellent operators and they focus on where they are most comfortable making a contribution. 

• Poor leaders above them that don't create the forums and opportunities to think big.  This fits with my strategy-fueled theme where in my opinion; the best leaders involve everyone in sharing insights and developing ideas for strategy.  This provides ample opportunity for individuals to contribute and teaches otherwise task-oriented people that it is OK to get out of the moment once in awhile.

• Bad personal time management habits.  Some managers like crossing off a bunch of lower-level, "C" priorities than focusing on one "A" priority.  This can be corrected.

• Fear of being accountable for something.  I worked with a sales manager that absolutely hated to work on anything beyond the deals of the month.  While his focus on results created some good outcomes for us, as the business changed and evolved, his ability to contribute dropped dramatically.  When it was said and done, he admitted that he was uncomfortable considering big changes when it was so hard to drive short-term results.

• Frustration with impediments to change.  If Immelt is imploring his people to innovate, the GE culture better darned well be willing to turn ideas into actions or the creative flow will shut down quickly.  I've observed cultures where the leader preaches change as the rest of the team nods and then proceeds to do nothing.

The bottom-line for now:

It's hard for most of us to think creatively on command.  Moving from a transactional model to a state of lateral or divergent thinking requires making and taking time.  As leaders, we can help improve and support Mr. Immelt's suggestion (hard to argue with the intent) by creating opportunities for the right types of discussions and by supporting the movement of ideas into actions, products and services.  Try holding your leaders accountable for creating a culture of innovation and then let them loose.  The results may surprise you.

The Leader's Challenge: Recognizing the Need for Change

Jack Welch, in his 2005 book, Winning, offers the following thoughts on change:

“For more than a decade, there has been a whole industry devoted to the topic (change), all of it selling pretty much the same line: change or die.  Well…it’s true.”

Mr. Welch also offers up the following advice in his usual, blunt style:  "You have to change, preferably before you have to."

I bring these quotes up because the other day I was asked to put together my thoughts for a talk at a gathering of community leaders in business, education and government on "How organizations can improve at recognizing the need to change."  The talk itself encompasses the full continuum of change issues, but my part is specifically focused around recognition.

I like this topic and think I it is brutally important to leaders and organizations regardless of whether they operate in the public or private sector.  I believe that it is important for organizations to develop competence at translating marketplace and macro-environmental changes into appropriate changes to better serve stakeholders.  No easy task, especially considering the "noise" that we all face in this era of accelerating change, time compression and growing complexity. 

I also think that improving an organization's ability to recognize the need for change, requires  an organization to improve in a number of areas that are essential for survival and success, namely leadership, strategy and execution.

First, A Few Thoughts On The Topic of Change:

• Change is a profound issue for most organizations, and a profoundly personal issue for people inside of organizations. 

• Most people are not wired to seek out change.  When talking about improving our ability to recognize the need for change, we are engaging in a tug-of-war with our nature.

• Leaders have the toughest job when it comes to change.  First, they have to ask and answer: "How should we change?" and then they have to succeed by gaining commitment from their organization on: "We should change."

• It's easy to overload on change.  There are ample opportunities for organizations to flail at the changing forces in our environments, never certain which ones are material or immaterial.

Organizations and People Have a Change IQ (Change Quotient)

It's hard to consider helping an organization improve their ability to recognize the need to change without taking into account that everyone and every organization has some predisposition towards the issue.  While there are a variety of perspectives on the topic of Change Quotient, a search will show common agreement on at least 3 components:

1. The ability to recognize the need for change: high change quotient leaders recognize the need to change before it is too late.

2. Understanding and mastering the change process: high change quotient leaders develop organizational competence at translating the need to change into actions that create value.

3. Emotional comfort with change: high change quotient leaders develop an inherent comfort with change based on their relative intelligence in components 1 and 2 above.

A number of practitioners offers assessments or audits to rate individuals and organizations on the three broad areas of Change IQ, I'll attempt a simple and practical audit for just #1, the ability to recognize the need for change.

Rating Your Organizations Change Recognition Quotient:

1. We have a current, clearly defined strategy.

2. Our employees would describe themselves as extremely comfortable in offering new ideas to our executives.

3. Our leaders (at all levels) are accountable for providing feedback on what they are learning about our
business and our customers.

4. Strategy meetings include individuals from all levels of the organization.

5. Someone or some group is responsible for external monitoring and report-back (market forces, trends, new advancements).

6. During the past year we have acted on something we learned externally by taking action to create a new
(program, product, service etc.).

7. We have an excellent understanding of how our customer's expectations for our offerings are changing.

8. Our offerings resonate with our customers so well that they practically sell themselves.

9. Strategy review and planning occurs multiple times per year.

10. We regularly engage in scenario discussions, where we imagine the impact of trends and forces on our business and on our customers.

11. Our employees would describe our approach to change as proactive.

12. We frequently have animated discussions on future directions.

13. New ideas come from people at all levels of the organization.

While I have yet to thrift these questions down and attach a scale, I would submit that a "strongly agree" answer to most of them would indicate a high Change Recognition Quotient score and a "strongly disagree" the opposite.   (I would love any input from readers on fine tuning the questions to create a viable Change Recognition Quotient survey.)

How Do We Improve Our Ability to Recognize the Need to Change?

I offer a number of "Best Practice" ideas for raising the effectiveness of an organization at recognizing the need for change.  These include:

Change your strategy habits.  Strategy is not an event, but a process and an effective strategy program incorporates ideas and insights from the broader organization (not just leaders).  Additionally, traditional tools (SWOT, Porters Forces etc.) often fall short in providing the level of depth you might need on change issues.  Consider scenario planning, even at a basic level (best case, worst case, continuation of current state) as a tool to inspire lateral thinking about your business and how forces might impact you.

Change your strategy communication habits.  Everyone in an organization must pass the "Walk In the Door" test, which simply means that as a person shows up to work, they understand very clearly how their priorities tie into the organization's strategic priorities.

Get your organization talking candidly.  Whether you call it robust dialogue or candid conversations, everyone at every level of an organization must be comfortable in providing ideas and insights on tough issues without fear of reprisal.  Many cultures are not like this, and moving from a less than candid or a collegial environment to one where the tough issues are fair game for everyone, is a significant leadership challenge.

Create forums for ideas and insights to be exchanged.  Make certain that the dialogue of the organization is about the marketplace, about customers and that it includes a lot of "What if?" and "Why don't we?" types of discussions.

Get leadership on the same page regarding their role in facilitating dialogue.  If you are at the top of the leadership chain, this is your job.  Your leaders must understand the importance of identifying the right change opportunities, and they need to carry this message and requisite behaviors to their reports and teams.

Establish accountability for turning insights into actions.  Ultimately, you need to do something that creates value for your customers through change, so teams have to learn when to stop talking and start acting.  As a leader, you must encourage your organization to develop the protocols for implementing ideas and then reinforce both the victories and the losses as part of the learning process.

The Bottom-Line for Now:

If you are intent on maintaining and developing an organization that contributes to society, grows and runs profitably, the need for or possibility of change is omnipresent.  The good news is that as a leader there are many ways for institutionalizing the recognition for the need to change.  The better news is that improving in this area requires you to improve in the ways that your organization fundamentally creates value.  I prefer to turn "Change or Die" into "Change and Prosper." 

Did Anyone Get the Memo on How to Act During a Slowdown?

You don't have to look hard to learn about the impact of rising fuel costs, including layoffs, plant closings, cutbacks, service reductions, fare hikes and new user fees.  These headlines and many more just like them blare from the tv and radio or jump out at us from the front pages of our morning newspapers.  However, what really amazes me is how hard you have to work to find examples of companies and leaders that received and read the memo on surviving, improving and even prospering during periods of economic difficulty.

I wrote about this topic a number of months ago (How Good Leaders Approach a Recession) suggesting that the best leaders take advantage of business cycle slowdowns to improve their organizations and set the stage for growth as conditions improve.  While I don't recall for certain, I suspect that I might have even suggested that it is possible for truly enlightened organizations to take advantage of the situation by flogging their competitors who are acting as if a slowdown means going out of business.  If I didn't mention it previously, consider it said: You can grow and advance during a recession.

The Airline Industry: How Not to Act:

The airline industry is generating a fair amount (bad pun intended) of the air time (another bad pun, sorry!) on bad news.  Rapidly rising fuel costs are further devastating the already not-for-profit U.S. airline industry, driving the companies to cut flights, cut employees, cut planes, reduce services, hike fares, add all sorts of new user fees in an attempt to survive.  While I never begrudge anyone the right steps to deal with costs, it seems that the net impact of most of the actions is to take one of the most miserable experiences that a human can go through (next to prison) and make it worse.  In the words of one of my favorite people on the planet..."We have a plan, it's not going to work, but we're going to do it anyway."

Hey airline industry, what about taking some steps to try and do something radical like offer something that encourages people to fly.  You've proven that punishing us with horrible service, uncomfortable equipment and extra fees for luxuries like checked baggage or rescheduling our flights don't work.  Why not Tune In to your buyers and offer us opportunities and experiences that surprise and delight?  Imagine,  trying to lure customers with something positive.  Radical.

Rumor has it one of the major carriers is working on rolling out a host of incentives that focus on providing consumers with good reasons to happily fill their planes.  Southwest figured this formula out a long time ago, and in my opinion, their current commercials mocking the fees of the other airlines by showing passengers inserting quarters for things like reclining a seat, accessing the restroom or opening the overhead luggage compartment, are brilliant.   Just like Apple has single-handedly rebranded Microsoft as a clumsy, lumbering, out-of-touch company with the "I'm a Mac" commercials, Southwest is showcasing how asinine the rest of the industry is acting.

Bottom Line: Other Thoughts on Prospering During a Slowdown in Any Industry

I didn't mean to make this a rant on the airline industry, but with 1 million air miles, most on United, I've earned the right to vent just a little.  Some other thoughts for leaders, managers and concerned corporate citizens everywhere:

• Thump your competitors if they'll let you. If your competitors are responding to a slowdown by acting like they are preparing to shrink, launch a frontal assault and seek to grab customers while the grabbing is good.

• Give us reasons to buy, not avoid your product or service. Offer positive encouragement. If you own airplanes you want butts in seats and if you make cars, you want the same.  Help us solve our problems and offer us some good reasons to take that vacation or consider you when we need a new car.

• Be positive.  Manage the flow of noise from your organization to ensure that it is weighted in the right direction.

• Create experiences for your customers that "surprise and delight." 

• Monitor what's happening in places where your customers come to buy.  (Home Depot, you lost my lawn tractor purchase last week, because no one in your store would take the time to talk to someone clearly ready to buy.)

• Topgrade your team.  The right people make you great.  The wrong people have you punishing your customers and sewing the seeds of your own demise. 

• Plan and act to prepare for improving conditions.  Prune your project portfolio to those that are most strategic and support them to the hilt!

My next assignment is to seek out examples of companies actually doing some of these things.  If you've got some examples, let us know.  I have to stop typing  now, I've finally reached the ticket counter and I need to pull out my credit card to pay for: the baggage fee, my flight change and my fuel surcharge.  Uh oh, the ticket agent looks angry. And oh yeah, I need a few singles for the bag of peanuts on the flight. 

 

Tuning In to Leadership (and much more) With A Great New Book

One of the highlights of the past few months has been the opportunity to gain some early insight into the forthcoming new book, Tuned In, by Phil Myers, Craig Stull and David Meerman Scott. 

I'm excited about this book on a number of levels.  In a pre-release article about the book, Phil, Craig and David make a promise to readers that they will show us an approach to finding "overlooked marketplace problems that, if solved, bring in customers who willingly buy your products and services without being coerced." 

From my discussions with Phil and from reading the article and advance materials, I am confident that this promise will be more than kept, offering some much needed guidance for executives and marketers looking to create offerings that resonate with buyers.  After 22 years leading high tech marketing teams, I couldn't help but ask myself, "Where was this book was all those years when I needed it?"  Well, it's here now, or at least almost here, and marketers everywhere will be well served to read and apply the well-researched and well-developed ideas and approaches in this fascinating and practical new book.

Tuned In presents a six-step process for creating a resonator: "a product or service that so perfectly solves problems for buyers that it sells itself."  The examples, approaches and ideas for realizing resonators and for supporting the creation of an organizational culture that institutionalizes the requisite thinking and processes are the heart of the work. The steps: find unresolved problems, understand buyer personas, quantify the impact, create breakthrough experiences, articulate powerful ideas and establish authentic connections offer powerful and practical guidance for marketers and executives everywhere. 

Valuable Guidance for Leaders in Tuned In:

We all read and relate to ideas through the filters of our own experiences, and as I've immersed myself in writing, speaking, training and teaching on all things leadership during the past few years, I've started to view the world through the eyes of how great leaders at all levels transform organizations. The Tuned In tagline reads: "Uncover the extraordinary opportunities that lead to business breakthroughs," The breakthrough for me personally from this book is the perhaps unintended but powerful framework that emerges for creating and sustaining the leadership culture necessary to realize a Tuned In organization.

During the research for my book, Practical Lessons in Leadership, my co-author, Rich Petro, and I came away from hundreds of hours of interviews with the perspective that most leaders do not operate with a holistic view of what leadership is supposed to deliver to an organization.  Tuned In helps solve that problem by offering clear context for the role and priorities of leaders at all levels as they pursue creating breakthrough experiences for their customers.

The Top Priorities of a Tuned In Leader:

• Creating the environment (atmosphere) necessary for individuals and teams to be comfortable and confident to take the risks and pursue the actions needed to identify and realize offerings that resonate.

• Bringing together individuals and teams with the talents, skills attitudes and sense of adventure needed to succeed as a business that is constantly searching for unresolved problems and applying the discipline needed to turn those into resonators.

• Ensuring that expectations and performance are defined, communicated and measured against customer and market standards, not just internal or competitor standards.   Inherent in this activity is establishing a new way of measuring performance that aligns with the Tuned In Process. 

• Developing his or her leadership credibility by ensuring that words and actions match and ensuring that associates receive the mentoring, feedback and developmental opportunities needed to grow and to pursue new and greater tasks.

• Constantly searching for, identifying and supporting the development of formal and informal leaders.

• Fostering an environment that encourages action-focused debate at all levels, across all functions up and down the leadership chain.

Armed with these priorities, Tuned In leaders, from the CEO to the front-line managers have a clear view of how they should invest their time and focus their energy.  These items define the job descriptions of leaders at all levels and help guide the development of To-Do lists across the organization. There is no wiggle room for misalignment on these activities as an organization seeks to create offerings that resonate and surprise and delight buyers with great experiences. 

The Bottom Line for Now:

Phil, Craig and David in Tuned In offer a pragmatic and effective approach for creating and sustaining success, regardless of the size or style of organization. Building on their framework, a Tuned In approach to leadership will help institutionalize the approaches and practices that they advocate.

You can and should read the book for the practical and actionable framework on creating value, but the richest veins of gold here for me are the ideas that the authors prompt for reshaping and invigorating our leadership habits.

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Join me for a webinar on Tuned In Leadership this Friday, June 13th at 10:00 a.m. to 11:00 a.m. PDT

Seven Suggestions to Consider When Creating A New Market

If you've ever worked in an organization or on a team that got caught up in the quest to create a new market you know that the experience is all consuming and exhilarating.

While the all-new pure white-space scenario is elusive, a fair number of organizations leverage their deep knowledge of a specific segment, a group of customers or a set of customer challenges to create new offerings that don't fit traditional market definitions or boundaries.  The combination of blazing a new trail and believing that what you have created and what you are espousing will help reshape and transform for the better how something gets done is intoxicating. 

I met the other day with a CEO living through this very situation right now, and from listening to her very real challenges and reflecting on my own experiences on one of these market-creating odysseys, I offer a number of leadership and management suggestions that might prove helpful on your own journey of market creation. 

7 Issues that Should Keep You Awake at Night on Your Way to Creating a Market:


1.  You have to surround yourself with flexible, free-thinking and adaptable people.  Hiring the former BIG CO executive who hasn't lived through what it means to swim without a life raft may not be the best plan in the early phases.  You don't have time to wean people off of big company practices...bring in the professionals that have already been through this process somewhere else.

2.  Listen to yourself and your people talk and read your own propaganda.  If everything that comes out of your mouth is about how great your new product is at the feature/function/capability level, you've got a problem.  If the answer to every business question is something about the unique capabilities and elegant architecture of your revolutionary product, you've got a problem.  If your web site is nothing but more of the above, the problem is real.  The prospective clients that you are seeking as early adopters are motivated by a bigger vision, not by the elegance of your technology.

3.  Markets don't emerge on anyone's schedule.   If you are banking on going from nowhere to critical mass on a short-horizon, you and your investors are likely to be disappointed.  While everyone in awhile markets emerge at remarkable speed, most of them take years and often never emerge.  If your market's emergence is dependent upon people and institutions changing long-standing practices and overcoming deeply embedded approaches, you better be planning for a marathon, not a sprint.    

4.  Back to the message coming from you and your web site.  Like it or not, you are evangelist and educator all at the same time.  If all you do is shout product, you will not appeal to either the hearts or brains of your prospective customers.  Make sure that your people, your web content and the preponderance of your conversation is educational and informative and not pure product propaganda. 

5.  Traditional marketing tactics don't work when you are creating a market.  Give it up and shoot your marketing head if he/she is suggesting advertising, trade shows and direct mail as primary vehicles.  (OK, this one will generate some controversy.  Sorry, I believe that the world has changed and people gather their information and assign trust in very different ways than they used to.  Before flaming me on this topic, read David Meerman Scott's: The New Rules of Marketing and P.R.  and then let's start the debate.)

6.  Traditional selling tactics don't work when you are creating a market.  See also the marketing comment above.  Transactional salespeople and sales approaches need not apply.  Your early focus is on market visionaries willing to take a risk to realize something profound for their business.  Match the value creation resource with the task to fuel the vision.

7.  Map the Influencers and figure out how to appeal to their fundamental need.  Don't know what that is.  It's simple.  Market influencers gain influence by having radical opinions on what's right, what's wrong and what organizations need to do about what's right and what's wrong.  Paint your vision for them, encourage them to develop their own vision and provide them with a soapbox to tell the world.  A good influencer will never back you or your product overtly, but if they see the opportunity to enhance their position by grabbing on to the issues that you are dealing with, they help educate the market.  This type of influence is not purchased with a subscription to an analyst firm or via press releases, it is gained through personal relationships and involving the right individuals in your strategic market and client discussions. 

The bottom-line for now:

The above 7-suggestions barely scratch the surface of what it takes to succeed in helping an organization create, define and profit from a new market.  However, they are important issues that I often do not hear the leaders of these exciting firms thinking and talking about.  Creating a market is a non-routine project, and as a result, non-routine thinking is required every step of the way.  Leave the traditional tactics at home, spend some time thinking beyond the moment and trust your gut that this is really challenging.  Remember, if you are right, you want to harvest what you spent so much time, money and gray matter pioneering.  If not you, the companies right behind you will be happy to benefit from your efforts.