Posted on

Why It‘s Time to Ban the SWOT from Your Next Retreat

Does the Strengths, Weaknesses, Opportunities  and Threats (SWOT) technique deserve it‘s accepted place in your next strategic planning retreat? Maybe not. There are more precise ways to understand the current state of the business that take less time and use more facts.

My recommendation: If you are leading your organization‘s next planning exercise, lift things up a notch by omitting the SWOT activity from the agenda. There are three reasons why this list-making activity needs to be transformed.

1. It’s just an opinion survey

When people cough up strengths, weaknesses, opportunities and threats they are merely offering opinions. While there are facts sitting in the background somewhere, the truth is that the exercise is based on opposable points of view, even allowing items to show up in multiple lists. For example, a reality such as “We have five employees” could fit into any of the four categories, construing it as either a “pro” or a “con”.

Given the fact that anyone can have an opinion about anything, merely accumulating these arbitrary points of view is a low-quality exercise. Discussing and debating them at length only reduces your meeting to a talk-shop.

2. It anchors the team in old thinking

The purpose of a well-designed retreat is to establish a clean break from the past. By contrast, the SWOT activity does the very opposite. Why? It merely asks people to rehash old, familiar lines of thinking. This reinforces the emotional link to whatever former strategy happened to be in place, which in turn, makes it harder to create a fresh one.

For example, imagine what happens when the team lists the fact that having five employees is a weakness. Now, it’s difficult to see it as a strength, which it may be in the context of a fast-changing industry. Stating the old concept as the solid truth only stands in the way of realizing a new paradigm.


3. It takes too much time

As the designer of the retreat, you are probably painfully aware that time is a scarce commodity. A SWOT survey gets people talking, but it requires several hours of precious space to collect the group’s point of view, collate and present it. This time could be better spent doing deeper dives into hard data.

Given these three shortcomings (which many executives already quietly realize) why does the exercise continue to be so popular? As a retreat organizer, you may have the answer: because it‘s easy.

Not only is a choice to do the activity never challenged, those who participate are unlikely to challenge each other during the exercise. Unfortunately, this avoidance tactic violates research showing that a group must struggle to produce good, new ideas. Here are some recommendations I make to solve the dilemma of coming to agreement without taking a shortcut.

1. Do the SWOT Survey Online, Before the Retreat

My clients do these surveys before retreats, as part of our data gathering and include all employees. The most salient results are summarized in the meeting within 15 minutes, which saves time and effort.

2. Facilitate a Current Snapshot

Perhaps the original intent of the SWOT was to gain an understanding of the present state of the business. This picture is still needed, but it must be fact-based.

As I have explained in a prior column, your snapshot can be pulled together using different perspectives: financial, customer/competitor, operations and employees. Add in an analysis of the external environment with the PESTER views, (Political, Environmental, Sociological, Technological, Economic and Regulatory), taking special note that technology is emerging as the most critical outside factor.

At first glance, this may seem like a dull recitation of boring data. However, the point is to understand (as a team) the story the facts are telling. Inevitably, this will include a robust discussion of various strengths, weaknesses, opportunities and threats but there‘s no need to group them. Instead, let the information do the talking, rather than hasty opinions, and weave the four SWOT themes into the narrative. Invariably, the tale the data tells is nuanced, filled with ups and downs, polarities, discrepancies and paradoxes. Only a team of insiders with a deep appreciation of the organization and their individual speciality can fully pull it together. Certainly, an outside consultant can’t.

Of course, there are companies which attempt to skip the snapshot altogether and jump right into planning the future. Unfortunately, doing so yields pipe dreams with no foundation in reality. It reduces the trust needed to make a risky move.

In summary, it takes a concerted effort to have everyone on the team see the company’s current position from a joined-up point of view. However, it’s more than a team-building activity: It’s also an evaluation of the status quo which is the first step to carving out a transformative strategy. Don’t block a big change which needs to happen with a costly SWOT mistake.

http://jamaica-gleaner.com/article/business/20190519/francis-wade-ban-swot-your-next-retreat

P.S.

Here is some interesting research found a few years after my article was written: SWOT Analysis: It’s Time for a Product Recall

Posted on

Why Some Leaders Hate Long-Term Planning

Why do some managers hate to make long-term plans for their business? The hidden secret is their deep fear of failure but there‘s a way to be confident about their team’s quality of visionary thinking.

Vague aspirations to “Become World-Class” will always drive some portion of your employees crazy. Even if it happens on a grand scale, the answer isn’t to abandon visionary thinking.

Fortunately, the Jamaican Government’s Vision 2030 avoids these perils by having both clear measurable targets and a specific end-date. Without these two components, it would be just be wishful a bunch of thoughts…fairy tales with no basis in reality.

However, most managers under-estimate the effort to produce such detailed targets. They struggle, but don’t understand why. One reason relates to a lack of harmony between two opposing camps: Dreamers and Realists. Your team is best served when a drive for inspiration (i.e. Dreaming) is balanced by a need to be practical (i.e. being Realistic). Here are three steps to include in your next planning meeting.

Being Inspirational through the Details

If you have noticed that most of your employees have lost the zest for Dreamer-led Rah-Rah / “Being Number One” chest-beating, you may ask: “Why did it become passe?” In short, it doesn‘t do well in today‘s world where authenticity is the main currency.

They see such lofty goals as inauthentic because they lack specific, measurable characteristics. As a result, it ruins their credibility, reducing them to having no more significance than an idle knock in table tennis, or a meaningless game of solitaire played just to kill time.

Today, your employees expect real engagement which must be linked to clear performance feedback which is objectively measured. Such black and white targets tell them whether they have won or lost, not only individually, but on a corporate scale.

In the case of Jamaica 2030 there was, I imagine, a long hard distance to go from becoming “the place of choice to live, work, raise families and do business” to defining multiple, explicit targets for specific sectors. It’s exactly the tough task many executive teams are unwilling to do. Instead, they try to take lazy shortcuts. For example, it‘s popular to get each department to come up with its own goals, then ask a clerk to pull them together in a final document.

At first blush, this approach may seem logical, or efficient. However, the end-product ends up being little more than a grab-bag of bits and pieces. This Frankenstein plan is exactly what Realists fear the most because the lack of practical coherence dooms it to failure.

Allowing Brutal Reality to Trim Dreams

Some Realists feel so strongly that they block or boycott planning retreats altogether. Instead, they argue that today is the best guide to tomorrow and advocate no more than annual budgeting. Implicit in this approach is the assumption that competitive advantage was decided in the past, and won’t change.

This dangerous idea is usually not spoken out aloud…until it’s too late. Like Cable and Wireless of old, they deny the arrival of an impending Digicel, thereby facilitating their competition’s success.

Unfortunately, most executive teams never resolve the difficult tension between Dreamers and Realists, preferring to allow one side to “win”.

The way out of this zero-sum game is to balance the time devoted to each camp during your next strategic planning retreat. When you create your agenda, build this in: ask everyone to Dream, then stop. Pause, and then provoke participants to trim the vision by making it Real. In other words, allow each approach to run its full course before switching from one to the other. The fact is, both are important, but they are impossible to reconcile simultaneously in a workshop setting.

Time and Discipline to Balance Both Activities

Most executives don’t appreciate this delicate balance. Instead, if you belong to one group, you are likely to point fingers at the other, complaining that time spent in their preferred zone is wasted. As a result, I often find myself in the middle, arguing for a balance. This means pointing out the pitfalls of “short” retreats. I explain why we no longer offer them: they favor one camp over the other, producing a weak strategy which is neither rigorous nor durable.

In other words, trying to focus exclusively on Dreamers or Realists defeats the purpose. The point of such sessions is to make the most difficult decisions regarding the future of the company. Bringing both camps together is just one of the critical end-products.

Teams who realize this fact produce miracles: building inspiring long-term plans based on realistic short-term commitments. While it’s a hard result to generate in a mixed group, this balanced approach is the best way to craft sustainable competitive advantage.

http://jamaica-gleaner.com/article/business/20190324/francis-wade-hidden-secret-leaders-who-hate-long-term-planning

Posted on

Why Strategic Planning Offers Team-Building Opportunities

Why is it said that a well-conducted strategic planning retreat can be the best executive team-building session ever? What elements should you include so that the time spent helps participants work better than before?

First, you must start by setting aside any recent, fluffy definition of “team-building”: it’s  become synonymous with “entertaining.” For many it means “changing out of work clothes to engage in an activity completely unrelated to the job”. Here in the Caribbean activities such as paintball, casino nights, church services and Soca parties have all earned the label, even as they deliver a “feel-good” experience.

However, many executives are not amused. They see it as unproductive, a way to bribe employees by giving them some fun (they supposedly want) in exchange for doing work (which they don’t really want.) This perverse logic represents old thinking. It comes from a time when productivity had to be coerced.

By contrast, the highest performers who typically make it to the executive ranks are already motivated. For them, team building shouldn’t be a break from work. Instea, it should enhance it by giving them a focused, intense opportunity to fix communication problems, deal with unresolved issues and learn new soft skills.

However, if you are designing such an outcome, don’t expect it to be easy. The best way to start is by focusing on observable behaviors which are missing. Once they are identified, provide your trainees the chance to practice them in a safe environment. Think of it as the equivalent of sparring with a partner in boxing, practicing in the nets in cricket or doing 100 free throws in basketball practice. Repetition, especially under the watchful eye of a demanding coach, works.

A strategic planning retreat, due to its intense nature, can be engineered to produce such outcomes. Here’s how you do it.

1. Recast the Retreat as a Balance

The worst mental model to have of a strategic planning retreat is to think of it as a round-about way to develop a key document. In fact, it’s easier to get the CEO or consultant to just sit down over a weekend and type away until the task is done.

When convinced by others, some leaders condescend to conducting a full team retreat just to get other people to agree to their ideas. In these settings, the event is simply a rubber stamp. The goal of including colleagues is to sell them on the CEO’s or consultant’s brilliance.

By contrast, an authentic retreat which infuses team-building at every step views the process of developing the details as co-equal with the final product. When they are both respected, you can achieve a fine balance between engaging participants and upholding the quality of the end result.

2. Use the Retreat to Engage and Train

The best process to create a group strategy involves two kinds of thinking activities. The first, “divergence”, means generating new ideas. The second, “convergence”, is the activity of bringing about agreement between different parties.

In a strategic planning retreat, it’s possible for you to emphasize these two opposite phases, teaching participants how to recognize each one. Now, they can learn the relevant skills within each activity and how to switch between them.

In particular, convergence is fraught with danger. In these phases, a good retreat should have moments when the fight for contending ideas becomes fierce. After all, the stakes are high and people from separate disciplines see the same facts with the special lenses they have been trained to use.

Don‘t be like members of weak teams which try to avoid such tussles by putting decisions to a vote. Effective groups work out their differences in an open discussion. Before doing so, take your participants through a self-evaluation of the specific skills needed when diverging or converging. As they make progress towards the end result, get them to reflect on how to improve them in real time.

The truth is that a strategic planning retreat is actually made up of everyday conversations. It’s just that you can seize the opportunity for participants to reflect on the quality of these discussions as well as the final output.

If you also provide an experienced coach to give feedback in the moment, that’s a huge bonus. She should encourage each person to take risks, to try out fresh skills. Expect some new behavior changes to occur in real-time that stick around for years to come.

The bottom line is that a strategic planning retreat is an ideal chance to practice and up-level everyday executive skills. By the end, the benefits the company gains far exceed that of the best party or outside exercise. That’s real team-building.

http://jamaica-gleaner.com/article/business/20190224/francis-wade-strategic-retreats-best-team-building

Posted on

Why Strategic Planning Offers Team-Building Opportunities

Why is it said that a well-conducted strategic planning retreat can be the best executive team-building session ever? What elements should you include so that the time spent helps participants work better than before?

First, you must start by setting aside any recent, fluffy definition of “team-building”: it’s  become synonymous with “entertaining.” For many it means “changing out of work clothes to engage in an activity completely unrelated to the job”. Here in the Caribbean activities such as paintball, casino nights, church services and Soca parties have all earned the label, even as they deliver a “feel-good” experience.

However, many executives are not amused. They see it as unproductive, a way to bribe employees by giving them some fun (they supposedly want) in exchange for doing work (which they don’t really want.) This perverse logic represents old thinking. It comes from a time when productivity had to be coerced.

By contrast, the highest performers who typically make it to the executive ranks are already motivated. For them, team building shouldn’t be a break from work. Instea, it should enhance it by giving them a focused, intense opportunity to fix communication problems, deal with unresolved issues and learn new soft skills.

However, if you are designing such an outcome, don’t expect it to be easy. The best way to start is by focusing on observable behaviors which are missing. Once they are identified, provide your trainees the chance to practice them in a safe environment. Think of it as the equivalent of sparring with a partner in boxing, practicing in the nets in cricket or doing 100 free throws in basketball practice. Repetition, especially under the watchful eye of a demanding coach, works.

A strategic planning retreat, due to its intense nature, can be engineered to produce such outcomes. Here’s how you do it.

1. Recast the Retreat as a Balance

The worst mental model to have of a strategic planning retreat is to think of it as a round-about way to develop a key document. In fact, it’s easier to get the CEO or consultant to just sit down over a weekend and type away until the task is done.

When convinced by others, some leaders condescend to conducting a full team retreat just to get other people to agree to their ideas. In these settings, the event is simply a rubber stamp. The goal of including colleagues is to sell them on the CEO’s or consultant’s brilliance.

By contrast, an authentic retreat which infuses team-building at every step views the process of developing the details as co-equal with the final product. When they are both respected, you can achieve a fine balance between engaging participants and upholding the quality of the end result.

2. Use the Retreat to Engage and Train

The best process to create a group strategy involves two kinds of thinking activities. The first, “divergence”, means generating new ideas. The second, “convergence”, is the activity of bringing about agreement between different parties.

In a strategic planning retreat, it’s possible for you to emphasize these two opposite phases, teaching participants how to recognize each one. Now, they can learn the relevant skills within each activity and how to switch between them.

In particular, convergence is fraught with danger. In these phases, a good retreat should have moments when the fight for contending ideas becomes fierce. After all, the stakes are high and people from separate disciplines see the same facts with the special lenses they have been trained to use.

Don‘t be like members of weak teams which try to avoid such tussles by putting decisions to a vote. Effective groups work out their differences in an open discussion. Before doing so, take your participants through a self-evaluation of the specific skills needed when diverging or converging. As they make progress towards the end result, get them to reflect on how to improve them in real time.

The truth is that a strategic planning retreat is actually made up of everyday conversations. It’s just that you can seize the opportunity for participants to reflect on the quality of these discussions as well as the final output.

If you also provide an experienced coach to give feedback in the moment, that’s a huge bonus. She should encourage each person to take risks, to try out fresh skills. Expect some new behavior changes to occur in real-time that stick around for years to come.

The bottom line is that a strategic planning retreat is an ideal chance to practice and up-level everyday executive skills. By the end, the benefits the company gains far exceed that of the best party or outside exercise. That’s real team-building.

http://jamaica-gleaner.com/article/business/20190224/francis-wade-strategic-retreats-best-team-building

Posted on

Why Your Company’s Business Model Needs to Keep Changing

There’s a certain false comfort which comes from believing that your organization’s profitability will always occur in the same way, year after year. That is, until the magic stops. When a disruption takes place, you must face the facts: your products are stale, your people disengaged and your loyal customers are doing business with someone else altogether.

Now, it’s time to transform your business, except that you are too late. The perfect moment was several years ago while you were enjoying the fruits of your success. Back then, you suspected that you would eventually have to make a shift, but never expected it to come so quickly… so suddenly. You thought you had more time. In retrospect, you should have paid more attention to the disruptions already taking place in other geographies.

If your business is able to survive today’s onslaught, how can you ensure it never happens again?

One way is to plan the kind of strategy that assumes a future combination of new technology, external competition, poor economic performance and government regulations. Put them all together and you imagine a perfect storm in which you are forced to react to monstrous changes.

But is there a way to be proactive?

Start by using the Jobs to Be Done framework introduced by Clay Christiansen. It asks the question “What are my customers trying to do when they purchase my product or service?”

For most industries, a rough answer might be: “To achieve a decent balance between price and value.”

For example, look at the value-price equation for a highly competitive niche like internet access. Over the years, the consumer has been able to enjoy the best of both worlds, as both sides of the equation have improved dramatically. How can you provide such a benefit to your customers that would endear you to them?

1. Change Your Mindset

If your company views customers as scoundrels to be defeated, or as disloyal partners to be scorned, it might be time to shift your mindset. Instead, think Win-Win, in which each transaction is an opportunity to build goodwill on both sides.

Consider that the average transaction delivers a dose of goodwill which “satisfies” both parties. However, that might simply be ordinary.

What if you were to commit to a mindset of providing extraordinary goodwill? What difference would a systematic approach to increasing value and decreasing cost make to your company?

2. How to Increase Value

Imagine if you were to keep your prices constant. Ask yourself, “How can we deliver even more value to customers, while continuing to achieve a Win-Win relationship?”

As tricky as this may sound, it’s a principle embedded in Jamaican history. “Brawta” – the little extra offered by a supplier to sweeten a transaction – has been a part of our island‘s commerce for as long as most remember. The idea is simple: a supplier can improve the buyer’s experience in ways that are asymmetrical.  

For example, imagine visiting the local butcher. She offers some raw dog meat as Brawta – a gift of scraps that were headed to the garbage bin. To her, the cost is nothing. To you, the benefit is substantial.

As a supplier of value, you probably have lots of ways to make your customer’s life easier. You just need to look for them with the right level of creativity. Once found, can they be packaged up and delivered so they add significant value yet cost you relatively little?

3. Cut Prices

Here’s the more difficult part. How could your company deliver the same value, enjoy the same margins while lower prices at the same time?

This is no theoretical exercise. Instead, you are anticipating a time when you won’t have a choice – a future in which you may be forced to cut prices in order to remain competitive. The difference is that if you do so now, you will have higher margins, and retain some powerful flexibility for later.

In effect, you are building a buffer against disruptions.

Plus, you’ll be able to provide customers the kind of price cuts that make them fall (and stay) in love with your business. As foreign as this may sound, look around at companies who consistently offer you the lowest prices. If they are smart, they are being aggressive to find ways to continually cut the amount you must pay.

What you may not know is that there’s a secret benefit to this effort. If your company commits to reducing prices, it will discover the technologies necessary to keep competitive advantage. In other words, you’ll never be surprised by a disruptive technology because you already use them.

Together, these three strategies can launch you into a different world from your competitors: one they’ll find hard to replicate.

http://jamaica-gleaner.com/article/business/20181202/francis-wade-change-your-business-model

Posted on

How Examining Core Assumptions Can Save Your Company

Why do disruptions drive companies out of business? While it’s easy to blame “innovative technology” or “tough competitors”, most firms hurt themselves by not following early warning signs which challenge core assumptions. Jamaican firms are particularly vulnerable.

Why? As mentioned in prior articles, our companies are overly leader-centric. While this is sometimes a benefit, it’s more often a weakness, especially when the big boss is the sole strategic planner. In such firms there are no real, bottom-up planning retreats – just ad-hoc announcements of the leader’s intent.

While the downsides of this approach are easy to imagine, specific blind spots are hard to detect.

For example, when I lived abroad I used to be a customer of Kodak, Blockbuster, and Blackberry. These were all dominant players, but today, it’s hard to find a trace of these firms or their products. When their industries were disrupted, they just disappeared.

While some point fingers at their aggressive competitors, that’s only a part of the story. In retrospect, they could have anticipated the changes that eventually wiped them out. Their blind spots prevented them from noticing what was happening.

This may be taking place in your industry, to your company.

Fortunately, research shows that in each firm there are usually a few mavericks who see such disruptions coming quite clearly. However, their insights often make little difference. They aren’t invited to retreats, sit-downs with the CEO or board meetings. Without their input, companies fail to see their blind-spots, and don’t tackle underlying business assumptions which are slow-moving, but inexorable. If your company is vulnerable to this mistake, here is an approach which will reduce the risk.

  1. Uncover Core Assumptions

Conduct an exercise in your next retreat to make a list of assumptions that are tightly held, but are not being discussed. They should be pre-requisites for your current strategy to succeed.

Unfortunately, there is no static set of assumptions sitting in an MBA textbook waiting to be copied. You will get better results if you allow your team to flounder as it struggles to uncover them.

I often suggest that teams find companies in their industry worldwide which are using the latest disruptive technology or business model. Look for the ones showing some early success.

Then, conduct a quick poll of your middle managers. Ask “Until what year is our company safe from this particular disruption?” Use the responses to see whether or not there is a wide range of opinions.

Now, perform the same survey, but restrict it to attendees at the last strategic planning retreat. If you don’t find consensus, question the validity of all your firm’s current plans. Furthermore, if your company is leader-centric, and has never conducted a real, participatory retreat, you should be even more concerned. You may be facing a battle for the future.

Use the answers to these questions to come up with a timeline, carrying forward either the average or the median year for planning purposes.

  1. Agree Upon the Timing

Conduct an open discussion with the help of a neutral facilitator, asking: “How will the events leading up to this disruption, according to this timeline, play out?” Allow the sparks to fly as different assumptions arise.

It may be a contentious affair, but it’s better to have this conversation now, when the stakes are low. Even if you fail to achieve perfect agreement due to a lack of data, the disparity in viewpoints will point to the need for a further step.

  1. Name Someone to Monitor or Track Assumptions

If your firm faces a complex set of data, don’t rely on “buck up” methods. Appoint someone with the right background to scan the horizon for breaking information. Better yet, give him/her a budget to do proper research. Empower the individual to sound an alarm as soon as a shift is detected in the data they are collecting.

In other words, look for the early indicators that your intended strategy or business model is in danger of failing. And do whatever it takes to bring this data to the planning team so they can do a rethink. After all, they are the ones who developed the original hypotheses and are in the best position to determine the size of the correction that’s needed.

Following these steps should give you the kind of early warning signs that your strategy and/or business model are likely to fail. It’s not necessarily bad news – just an indication that swift action is required.

This is especially true in leader-centric firms which have relied on the instincts of a single, stubborn individual. Help these strong bosses recognize that their original brilliance needs a dramatic, team-based upgrade if the company is to survive a potentially disruptive future.

 

 

 

Posted on

How to Scale Up a New Innovation

Sometimes, good ideas for new products and services include the seeds of their own destruction. How can this problem be discovered and prevented, thereby ensuring the success of your latest, greatest idea?

As a company innovator you are excited. Your original concept has taken off with higher-than-expected sales or conversions. Customers are buying because you uncovered an unmet need before anyone else.

While congratulations are in order, it’s also a dangerous moment because you are entering uncharted waters filled with new obstacles.

They are not coincidental. Your success has bred them. Being ready for them takes real ingenuity, and you must use your imagination to deal with this unique situation. Here is a useful framework.

The Five-Part Model

The Balanced Scorecard is built on the notion that a company’s strategy can be viewed through four distinct perspectives: Financial, Customer, Process and People. While your firm is actually an interconnected
whole, there’s value in viewing it in-depth from these separate angles.

In addition, the PESTER Model offers a fifth “External” perspective. It’s shorthand for Political, Economic, Social, Technological, Environmental and Regulatory/Legal forces which affect every company.

Here’s a way for your planners to use all five dimensions to examine your company’s existing state, and future dangers.

Step 1 – Create a current day snapshot

Together the team develops a joint view of the performance of the business via the five perspectives. This involves far more than looking at a few numbers. It means finding the drivers of today’s successes and failures in a group discussion which includes every stakeholder.

While it’s a challenge to bring all members of your team to common agreement, the effort is necessary for subsequent steps and shouldn’t be rushed. In both technical and emotional dimensions, there must be a meeting
of the minds.

Tip: use layman’s language.

Step 2 – Simulate Future Growth Scenarios

Here, you imagine different kinds of success. For example, contrast hyper and moderate sales increases and their impact. What if the market were to grow in response to your product as it did when Digicel first offered mobile phone service?

As you detail these scenarios find one you are most willing to realize. Then, carefully assign it a future year which takes you just beyond the moment when the current burst of sales is projected to end.

Step 3 – Look for Hurdles in the 5 Dimensions

Now for the creative part. As customers respond where is your system likely to fail first within the five perspectives?

– Financial: Will cash-flow problems develop? Many companies who experience rapid growth wind up with high receivables that run them straight into bankruptcy.

– Customer: Can success bring new competitors into the market offering fresh discounts or features?

– Process: Where would you run into a lack of capacity? Will ad hoc processes begin to break down once volumes increase? The fact is, most new products and services are developed by small, informal teams. They work well in the early days, putting in extra hours at little cost to them and their families. It’s a sacrifice that’s not sustainable.

– People: Where will you see a lack of talent? To develop the initial offering, you probably used well qualified, trusted individuals with a depth of experience. Now, to match new sales volumes, you must hire from the second and third tiers. By definition, they aren’t as productive and need to be trained.

– External: In a highly regulated industry, is it likely that the regulatory rules may change in response to your product? Could the authorities react by limiting the market, reducing your profit-making potential?

While taking these five perspectives are a beginning, my experience tells me that the most difficult topic to discuss is that of leadership. Founders, CEO’s and Chairpersons are often reluctant to craft plans for succession, putting off such uncomfortable issues for others to suffer through. They neither train their replacements, nor make provisions for catastrophes which may render them unable to lead.

There’s also an unwillingness for companies which belong to conglomerates to consider changes driven by their ownership. It’s easy to overlook the fact that in these groups, other people can decide to use a company’s profits (or surpluses in the public sector.) The owners, in the absence of compelling counter-arguments, may simply choose to invest elsewhere, pay dividends or reimburse the group office for the original risk.

Companies which don’t properly consider all these factors expose themselves to rude surprises, thereby jeopardising the enterprise. Fortunately, it’s not expensive to make plans to meet these challenges – they
represent a critical investment that’s well worth the value.

 

 

 

 

Posted on

When Big, Hairy, Audacious Goals Produce Poor Performance

If you lead an organization you may have asked yourself: what is the effect of setting big goals? Most leaders know that such objectives can be empowering in some circumstances but produce the opposite result in others. If so, some recent research might help the next time you sit down with a subordinate to set performance targets.

The management bestseller “Built to Last” by James Collins and Jerry Porras coined a phrase that is now used widely: BHAG, a “Big, Hairy, Audacious Goal.”

Most Jamaican executives have heard the term in the past and try to use stretch goals to awaken their organization from stale, static patterns. Once enlivened, breakthroughs become possible.

As a result, managers who have accepted the idea, encourage employees to commit to difficult goals.

Some push hard, using the force of their personality to get direct reports to acquiesce. Sales managers, for example, try to inspire their people to leave their comfort zones to accomplish big revenue targets, sometimes refusing to take “No” for an answer. Their occasional success leads them to repeat the tactic as often as they can, especially with fresh recruits.

However, new studies show that there are actually two different kinds of goals which should be set. Gary Latham from the University of Toronto has studied the question for the past three decades, concluding that it’s easy to set goals which end up doing more harm than good. Here are the strategies he recommends to avoid this problem.

Strategy 1 – Create targets which are not too hard, but not too easy
Scientists call it the Goldilocks Effect. The most effective goals need to be challenging enough to get someone’s attention, but not so difficult that they believe it’s impossible and therefore give up. Leaders must calibrate targets carefully.
For example, in the 1930’s, Manley and Bustamante didn’t immediately strive for the objective of complete independence. While they probably saw it as the ultimate objective, they took their time. The Jamaican people were shepherded through a long struggle which started with earning the right to form trade unions. It continued through the formation of political parties and the fight for Universal Adult Suffrage which eventually led to self-rule.
In retrospect, their strategy of taking one step at a time was probably best. It’s a lesson for all managers who want employees to produce extraordinary results, and it happens to be supported by empirical research. Don’t ask for “too much, too soon” or its opposite: “too little, too late”.

Strategy 2 – Distinguish outcomes from learning
In Latham’s work, he further distinguishes between “outcome targets” and “learning goals”. The former relate to end-results, such as a salesperson’s total sales per month. They are easy to understand and define because in the end, measurable accomplishment counts the most in any business.
However, managers are not usually aware of his major finding: outcome targets are only suitable for employees who have mastered their jobs.
By contrast, most employees are still developing critical abilities. His research recommends a different approach for this cohort: the use of “learning goals.” These are defined as targets which are linked to the acquisition of new knowledge or skills. They focus employees on “discovering, mastering, or implementing effective strategies, processes, or procedures necessary to perform a task.”
For example, new salespeople barely understand their product, the market, or required sales tactics. They should concentrate on setting learning goals related to mastering the fundamentals of their specific craft.
Latham’s work shows that managers who fail to make the distinction court failure, producing frustration and anxiety. In the worst case, people end up blaming themselves, then quitting, experiencing a drop in self-esteem. They have no idea that their manager should have explored an alternative.

Strategy 3 – Shifting Expectations
The above finding indicates a level of nuance most organizations don’t realize. Instead, those who employ salespeople often kick off the year with over-the-top “Rah Rah” sessions. They are entertaining but do little more than produce hype.
What’s a better choice if you are a manager? Skip the use of such blunt, short-term instruments, and train yourself to understand the two different kinds of targets. With this skill, you can set learning goals, look for the early warning signs of employee maturity, then shift your approach to targeting outcomes at just the right moment.
If you commit yourself to developing these surgical skills, you won’t get stuck on the one-size-fits-all thinking which permeates companies and demotivates employees. Instead, it may be the key to moving each of your direct reports to higher levels of performance.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. Missed a column? To receive a free download with articles from 2010-2017, send email to columns@fwconsulting.com

Posted on

Connecting Strategy, Performance, and Daily Activity

How do you ensure employees are balancing their time between routine activities and long-term, strategic projects? Managers and their HR Partners have been tackling this problem for decades but continue to fail to separate the two different energies essential to sustain high performance. Here’s why.

Robert Pirsig’s “Zen and the Art of Motorcycle Maintenance” was a cult hit, but his follow-up book, “Lila” offered important, practical ideas for every organization. He outlined two kinds of value in everyday life: Dynamic and Static Quality.

Dynamic Quality is the energy needed to make change happen. He defines it as a disruptive force which upsets the status quo, drives improvements and makes a difference. Its opposing “yang” is Static Quality, the energy needed to keep things the same. This is the source of maintenance chores; the continuous reliability which allows daily life to function.

Most people prefer one or the other, but in Pirsig’s brilliance, he brought the two together. Instead of seeing them as enemies, he imagined they exist in a symbiotic, alternating partnership.

He explains that each kind of quality has its season. There are dynamic moments when change must be driven versus its static counterpart where gains have to be consolidated. The key is to ratchet between the two at the right tempo, without getting stuck in either “harem-scarem” chaos or brain-dead stasis.

How does this idea apply to your organization?

Each year, when your firm conducts its annual strategic planning retreat, it’s allowing dynamic quality to run unbridled and free. Representing a dramatic departure from the routine of daily activity, it deserves its vaulted place in the calendar.

However, static quality probably reigns supreme on every other day. Immediately after the event, the status quo re-asserts itself, adding friction. Innovation degrades into wishful thinking. Customers remain upset, processes are never fixed, and profit margins don’t improve. The retreat is ultimately judged as an expensive waste. Some companies stop having them altogether.

In the 1990’s, to answer this problem, Drs. Kaplan and Norton invented the Balanced Scorecard. Along with the Strategy Map, these tools were intended to connect long-term plans with daily activity. After two decades, we now realize much more is needed.

The duo never imagined the mistake most companies make in implementing their ideas. In direct contravention of Pirsig’s call for clear separation, they implement performance management systems which throw dynamic and static quality into a single lump. As a result, staff is unable to answer: “What do I need to do to keep things the same, versus change, and how do I achieve a balance of time and effort between the two?”

The result? Staleness. Boredom. Failed improvement initiatives. Here are three tactics which will begin to break them out of their predicament.

  1. Bravely Separate Dynamic and Static Quality

In my firm’s planning retreats with executives and board members, we find ourselves working hard to keep the two energies apart. “The effort to envision a shiny future must be informed by the status quo but not limited by it,” is our mantra as participants reach for Dynamic Quality.

The very purpose of a retreat is to consider a brand new vision: a courageous act for most teams.

To wit, I have been in retreats where attendees risked their jobs to birth a breakthrough future. In one case, executives were collectively and ultimately successful; but they paid the price before their vision came to fruition when some were summarily fired. Needless to say, this is an extreme example, but Dynamic Quality always requires courage.

  1. Create Organizational Strategy and Business-as-Usual (BAU) Metrics

To strike a balance between the two energies, companies need to measure two kinds of activities after the retreat. The first set applies to the annual strategy and tracks its implementation. The second, BAU metrics, are ones required to maintain company functions and change little from year to year.

At the highest level, the CEO and employees must keep track of both. However, boards should demand to see the former, while saving any interest in the latter for the exceptional circumstance.

  1. Deploy Blended Performance Management

In most companies, the individual employee has no clue which parts of their job are strategic versus BAU in nature. Therefore, they have no idea where to focus. In its place, provide each person the means to define separate targets in both areas. Also, appreciate the fact that while some employees will only be doing BAU activity, everyone must be able to explain the difference between the two.

These practical steps help staff-members step out of muddy waters where Dynamic/Static quality, Strategy/BAU metrics are confused. Their clarity increases the odds that your futuristic plans succeed, while simultaneously ensuring the continuity of previous, hard-earned gains.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. Missed a column? To receive a free download with articles from 2010-2017, send email to columns@fwconsulting.com

http://jamaica-gleaner.com/article/business/20180408/francis-wade-connecting-strategy-and-performance

Posted on

How to ensure a lack of time doesn’t ‘mash up’ your strategic plan

I just had an article published in Trinidad’s Newsday newspaper that highlighted the reasons why poor time management skills routinely mash up the best made strategic plans.

How to Ensure a Lack of Time Doesn’t “Mash Up” Your Strategic Plan

As we enter the post-festival season, many local companies embark on fresh annual and quarterly strategies that just won’t succeed. Most executives will blame “the culture” but they are mistaken: it has more to do with their ineffective use of time.

If you are an executive you may relate to the problem. During the strategic planning retreat, brainstorming sessions generate a lot of new ideas. As the activities add up you feel a subtle but distinct discomfort, especially if you happen to be more experienced. You sense that everything on the list simply cannot get done. Furthermore, you mute your own objections because of the strong pressure to be a “team player.”

The best companies determine the cost of each strategic project plus the overall budget when they do their strategic planning. The rare few, according to McKinsey & Co.’s Bevvins and De Smet, will go further and complete a time budget. Why is it needed?

Most company executives focus on financial budgets first because they believe that cash is their scarcest resource. The new strategic plan must be made practical by selecting activities with the highest ROI – a widely accepted technique.

However, near the end of a retreat, tired executives rarely go the next step, asking themselves how much time needs to be budgeted for each new activity. In the months to come, they treat time as if it’s an infinite resource. This sets their strategy up for failure from the beginning, causing the discomfort I mentioned earlier. The problem isn’t a lack of time, however. It’s a deficit of skill.

Most will turn to “time management” skills for the answer, without understanding that it’s a misnomer: time cannot really be managed. Instead, they need to learn to manage a “time demand,” defined as an individual, internal commitment to complete an action in the future. This distinction is foreign to many executives in Trinidad and beyond, but it lies at the heart of time budgeting.

As a manager you may possess a secret – your methods for managing time demands are self-taught, starting around the time you took the Common Entrance or SEA. You did so early on, giving you an edge that has played an important role in your academic, career and organizational success.

However, being better than the average Caribbean person is no great accomplishment. The data I have gathered from regional workshops shows why individual productivity is low, even as the macro-economy might be growing. With respect to time budgeting, our skills are lacking at all levels of the enterprise, but here are four things that can be done to instill a new level of rigour in the C-Suite while executing your annual strategy.

1. Gain an appreciation of your current individual and collective skills at managing time demands. Do so by completing an informed self-assessment illuminating your methods and their relationship to world-class standards. You’ll probably find some critical behaviours you merely do each day, but have never thought about before. Your profile reveals the salient gaps.

2. Create improvement goals and a plan. These are easy to build based on the prior step. If you were well-trained in order to do a self-assessment then you should be itching to close the gaps. The temptation will be to try to change too many, too quickly. Resist it and go for small steps with lots of support.

3. Collect time data. Most professionals have only a gut knowledge of how long things take. The chances are high that you have never tracked your personal time as the McKinsey authors and also Peter Drucker, the management guru, recommend. For planning purposes, this discipline can be as important as tracking expenditures. Data should be collected on a programme basis also, so that teams in your firm can determine how to make successful project plans.

4. Manage packed calendars. The gradual removal of administrative assistants from C-Suite staff complements has pushed a number of new time demands into your lap. The problem isn’t about fetching coffee, however. Now, you are forced to manage the all-important activity of planning your time-starved calendar using technology that changes from day to day.

The McKinsey research shows that the effective executive makes full use of administrative assistance to coordinate demanding schedules. This helps them to preserve time devoted to “the flow state” – their most productive times spent alone doing their best work.

In the absence of this knowledge and the supporting mechanisms, it’s no surprise that many strategic plans amount to little more than overblown wish-lists. Unless local companies take their executives’ time demand management skills seriously, it’s safe to expect disappointments at this time next year.

Francis Wade is a management consultant and author of Perfect Time-Based Productivity. To receive a free compilation of past columns, send email to columns@fwconsulting.com

Click here to read the article online.