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Would you be disappointed if 2020 looked exactly like 2019?

September 13, 2019 Tags: , , , , , , , Mike Chirveno

I’ve been asking myself that question. And now is the right time to ask it. The time between now and mid-December has been called the “100 day sprint” or “the most important 100 days of the year”. Why? Because everyone is back in the office after summer, back in the routine and hunkered down for a busy three and a half months. For some companies, it’s the run-up to a busy holiday season. For others, it’s time to prepare 2020 strategic plans and operating budgets.

In a very real way, the foundation for your organization’s 2020 is going to be laid in the next 100 days. Do it well and 2020 could be your best year yet. Do it poorly or don’t do it at all and 2020 might be just a carbon copy of 2019.

So, what should you be looking at right now? I have a longer list, but if you can’t swing a full-blown strategic planning exercise (which, in my opinion, you should commit to), I’d turn my attention to these four items first –

  • Ask hard talent questions – Do you have the right people in the organization who can take you where you want to go in the next 2-3 years? If not, can you develop existing staff or do you need additional talent? Do you have chronic personnel problems you’ve been reluctant to deal with – people who are poisoning the culture or who are consistently under-performing? If so, what are you going to do about it? Are there one, two or three people, who, if they left, would put your organization at risk? If so, what have you done to mitigate that risk?
  • Gauge organizational health – Is the company culture healthy? For example, is there clear and complete communication up and down the org chart? Is there transparency so that people have the information they need to make good decisions? Are you and are the other leaders in the organization setting a good example in your approach to work and in your interactions with every stakeholder group?
  • Reexamine value creation activities – Do you know the key drivers of the value surplus for your customers? When was the last time you examined your entire value creation chain looking for opportunities to improve vendor performance, inventory management, cross-department collaboration, processes, quality and logistics?
  • Measure what matters – When was the last time you revisited the metrics on your balanced scorecard? Are they really indicative of organizational health? Are your systems providing data quickly enough and to the right people so your field decision-making is data-driven and your longer-term decision-making is data-supported?

Inertia is strong. The pull of ordinary daily days will drag you right into the holiday season before you’ve taken any time to plan for 2020.

I’ve rewritten this last paragraph several times. Originally it said that you’re busy and looking at just these four things is better than doing nothing at all – that’s true. But, I want to encourage you to do the hard thing and take a much deeper dive into your organization. Don’t make 2020 slightly better than 2019. Make it much better by critically and accurately evaluating the current state of your organization, thoughtfully envisioning what you want 2020 to look like and deliberately crafting a plan to get you from the former to the latter.

Balancing Ownership and Operations Responsibilities

July 15, 2019 Tags: , , , , , , Mike Chirveno

It’s been my privilege to work with several family businesses over the last 13 years. In some, the owners have no day-to-day responsibilities, but have turned over operational responsibilities to a CEO or GM. In others, they are both owners and operators. These clients have spanned several industries. However, in one business discipline, for both types of organizations, one challenge is identical, “When owners exercise their ownership responsibilities, on what should they focus?” The problem is more pronounced when, in their day jobs, they have real operational responsibilities. Those demands consistently tug and pull at them, even when they are attempting to wear their ownership hats. But even those owners who have relinquished day-to-day operations to someone else seem to gravitate towards operational problems. I think there are a few reasons –

  • Operational problems are easier – they are more concrete and the solutions are sometimes very clear (or at least the options for solutions are clear)
  • Everyone has an opinion – we all know what we like
  • There is likely some familiarity with the problem, even if that familiarity comes from another life or work experience

However, to effectively position the organization for health and growth, owners need to focus on a few specific items. I created the list below for a family business CEO to guide her family members/staff (who have operational responsibilities) through an exercise during which they could discuss their performance on ownership responsibilities and operational responsibilities. The list below was on the left slide of a table. On the right side of the table was a list of each employee’s specific operational tasks. Below the table were specific questions and performance metrics for each of the bullet points.

  • Culture – Define, model, build and perpetuate it – Culture is the unwritten code of conduct for the organization. It controls the way we treat everyone else in the organization – employees, suppliers and customers.
  • Learning Orientation – Understand that the industry, employees and customers change and so must we. Embrace lifelong learning realizing that we never will “arrive”.
  • Vision – Define the desired future state of the organization – Business composition, value creation, customer experience, investor returns, corporate image.
  • Investment-Grade Decisions – Focus the bulk of ownership decision-making on investment-grade decisions – those that will impact the organization 2, 5, 10 and 20 years from now. Leave operational decisions to those directly responsible.
  • Leadership Succession – What knowledge and experience will those who run the organization in the future need? How will they get it? What is the sequence of events for a family member who wants to join the business?
  • Stewardship – While every owner benefits from the “golden eggs”, their responsibility is to care for the “goose that lays the golden eggs”. How can we best manage the property, equipment, personnel and finances to ensure that the organization continues to generate maximum returns for years to come?

I want to dig a little deeper into each of the ownership responsibilities.

Culture – Peter Drucker reminded us, “Culture eats strategy for breakfast.” Without a doubt, the most important job of an owner is to live the way they want their managers and employees to live. Do you want employees to put the good of organization above their own personal enrichment? Then take a smaller dividend at the end of the year so you can reinvest more in the business. Do you want employees to be good stewards of the organization’s resources? Then don’t use any of the organization’s assets for your own personal use. Do you want employees to treat every customer like they’re the most important one – even if they generate very little revenue? Then show extraordinary kindness to every employee regardless of their place on the org chart. You get the idea. Your example has far greater impact than the mission statement posted on the lobby wall or the employee commitment that the employee has signed.

Learning Orientation – Ego is the enemy – always has been, always will be. As soon as we believe we’ve figured it out, we’ve started the countdown timer for the end of our business. The founding generation and successive generations may have done everything right in steering the organization to its current state, but their brilliant work may no longer be applicable in the future. Every business that wants to survive must engage in creative destruction (Joseph Schumpeter)– regularly replacing outdated production units (products or services) with new production units that are birthed by innovations in both in product and process. Embrace the core principles that make your organization what it is fundamentally, but “kill all the sacred cows” that keep your organization from effectively creating greater value for current and future customers. Keep growing. Keep asking good questions. Keep hiring people who have your core values but approach the world differently.

Vision – No one has a bigger stake in the game than those who have invested their resources in acquiring and operating the business. And no one should have a clearer picture of what that business could or should be. Sadly, I’ve run into several circumstances where that is not the case. Managers or staff members see much more potential and promise in the organization than those who own it. They have a greater awareness of the organization’s challenges and greater clarity of the incredible upside if new markets, products or services were added. Many times, the vision of the founder, which might be several generations old, is still the mold for the business. There’s nothing wrong with that if the vision is big and embraces the change that inevitably happens over the course of time, but frequently that’s not the case. Owners must ask hard questions about the continued viability of the business model (how do we create value and is that value sustainable), the need for ongoing revenue and asset growth and the perception of the organization with customers and in the industry. Then they must craft a vision that clearly depicts a desirable future state for the organization.

Investment Grade Decisions – The challenge of building something that will outlive you is pretty daunting, but that’s the purview of owners. Whether your exit plan is to sell the business, get a payout from the business, pass it on to the next generation or something else, today’s investment decisions make those future plans possible. With the vision firmly in hand, the challenge is to make decisions that truly merit board attention – markets to enter, product categories to launch and facilities to build. It’s tempting to spend time talking about buying delivery trucks, replacing computers and painting bathrooms, but the management staff is more than capable of making those decisions. Give careful attention to the capital and operating budgets at the beginning of the year and, within those constraints, leave those decisions in capable hands. If there’s a seismic shift in the world during the budget year, it’s certainly appropriate to revisit the budget. As the organization grows in size and complexity, there will be increasingly more operational things that clamor for your attention. That makes your commitment to entertain only investment-grade decisions even more important.

Leadership Succession – I didn’t list these in order, but if I did, this probably should have been pushed further up the list. Very few things are more important than the people who are leading the organization. Owners, especially those who have chosen to turn over day-to-day operational responsibilities to a CEO or GM, must be diligent to find, support and invest in the person who will act in their stead every day. For those owners who have operational responsibility, DNA doesn’t automatically equip those in your family tree to successfully lead in the organization. So, whether it’s in the family or someone else, what readies someone to take the reins in the organization? Organizations that successfully pass the torch from one leader to the next are very deliberate about defining the hard skills, soft skills, knowledge and experience that must be present for those in key positions. Then, they make sure they put potential leaders in positions to build those skills. Let me hasten to add this, once the leader is in place let them lead. I hate to pull out an overused quote, but this one from Steve Jobs is pretty good, “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”

Stewardship – These stats from the Family Business Alliance should give us pause – More than 30% of all family-owned businesses make the transition into the second generation. 12% will still be viable into the third generation. 3% of all family businesses will make it to the fourth generation and beyond. Every time I read these stats, I think about Aesop’s fable, The Goose and the Golden Egg. If you don’t remember it, a man possessed a goose who laid a golden egg every day. Over time, the man became dissatisfied with just one golden egg every day. He decided to kill the goose and get all the eggs at once. He killed the goose and cut it open. He found no golden eggs inside and the goose was dead. While every owner should enjoy the financial rewards from their business, the ability to change the financial trajectory of an entire family is a wonderful gift. Those who are inclined to take advantage of the opportunity must skillfully manage the resources of the organization so that it continues to create value for customers and generates adequate returns for future generations of owners. To borrow from the fable, enjoy the eggs, but your primary responsibility is to nurture and care for the goose.

Ownership is not for the faint of heart – whether you’re involved in day-to-day operations or not. The challenges are many and the stakes are high – many times effecting the lives of family members and employees who depend on us. That being the case, I want to remind you of something we learned from Gary Keller in his book The One Thing. We don’t want to run the organization the “best we can do it”. That implies that the ceiling is our current level of skill and knowledge. Instead, we want to run the organization the “best it can be done.” The distinction is subtle, but it carries with it a commitment to stay hungry, stay curious, learn, grow and be the best owners we can be.

Flywheel and V-REEL

June 9, 2019 Tags: , , , , , Mike Chirveno

I recently read Jim Collins newest book, Turning the Flywheel, in which he drills down on the Flywheel concept introduced in Good to Great. For a quick refresher, the flywheel for an organization is a virtuous cycle of actions, each building on the previous, that, when executed consistently and with excellence, build self-sustaining momentum for the organization. To illustrate, I’ve included the flywheel for my company below.

ClearVision Consulting Flywheel

You can see how each action propels the organization into the next. As intensity and depth of effort increase on every rotation, velocity also increases, accelerating the growth of the organization and making it healthier with each turn. As the flywheel turns faster and faster, the weight of the flywheel, which early on seemed to work against you as you struggled to execute each action, now begins to work for you and the flywheel becomes almost unstoppable.

I was introduced to the flywheel several years ago when I first read Good to Great. Like a lot of Jim Collins’ material, it’s an enduring bit of business genius. But when I revisited the topic this time through the new book, I couldn’t help but think of how well it paired with the V-REEL framework from David Flint’s excellent 2018 Book Think Beyond Value.

In Think Beyond Value, Flint introduces the V-REEL framework – a tool that helps business owners and managers think through their organization’s value creation activities using fives lenses –

  • How do you create value?
  • How rare is that value?
  • What factors erode that value?
  • What factors enable that value?
  • How long can the value be sustained?

It didn’t take long to make the connection between the two tools. The flywheel is a virtuous cycle of value creation activities (Flint’s first question). Those activities only remain valuable as they differentiate the organization and make their product or service unique or desirable in the marketplace (Flint’s second question). Stewards of the organization must constantly be vigilant for those factors, both internal and external, that impede or diminish the effectiveness of the flywheel activities (Flint’s third question). At the very same time, they need to infuse those flywheel activities with resources that make them more effective and efficient (Flint’s fourth question). And finally, stewards of the organization must ensure that the flywheel activities continue to build sustained competitive advantage for the organization – that is, they still have meaning in the current competitive environment (Flint’s fifth question).

There are only a handful of business activities that approach “holy grail” status and value creation is one of them. I hope introducing these two tools helps you step back and take a fresh look at your value creation chain. A 500-word post doesn’t come close to doing justice to either of these two books, so I hope I’ve sufficiently whetted your appetite to hit your favorite bookstore (brick and mortar or online) and pick them up. Here they are on Amazon:

Turning the Flywheel

Think Beyond Value

I Want to do for Strategy what Chip and Joanna Gaines did for Shiplap

May 31, 2019 Tags: , , , , , , Mike Chirveno

I’m going to go out on a limb here and guess that six years ago, you had no idea what shiplap was. Neither did I. But thanks to Chip and Joanna Gaines and their hit HGTV show FixerUpper, shiplap is now part of the national consciousness. Everyone wants at least an accent wall’s worth of six-inch, horizontal wood goodness in their home.

Even though shiplap has been around for decades, it took someone to champion it – to sing its praises to a new generation of homeowners. I want to do for strategy what Chip and Joanna Gaines did for shiplap.

I love strategy –

Truthful evaluation, thoughtful options and deliberate actions to move an organization from the current state to the desired state.

Leaders in every organization feel the tension of the gap between where they are and where they want to be. That tension is supposed to be there. It’s one of the things that gets us to the office, shop, kitchen or factory every morning. But tragically, many leaders feel the pressure to close the gap but lack the tools to make it happen. Leaders randomly marshal the resources of traditional functional areas like marketing, production, finance and HR to transform the organization and close the gap, but in the absence of an overarching discipline that coordinates the objectives and work of these functional areas, the transformation is uneven and short-lived and the organization reverts back to business as usual. Businesses of 6, 8 or 10 people need the same overarching discipline, just like businesses of 6, 8 or 10 thousand.

That’s why I love strategy. It’s the neglected discipline – the one that, when employed, spurs conversation, creates collaboration and generates a singular focus for the organization. It’s the discipline that deliberately and methodically moves the organization to where it wants to be and, in the process, engages and builds up everyone involved.

Just like every homeowner who says, “I’ve got to have some shiplap in my house”, if I can get a business owner or manager, no matter the size of their enterprise, to say, “I have to incorporate strategic planning into my organization”, I’ve done my job. And if I have the privilege of helping them in that process, that’s a bonus.

It’s Not Personal. It’s Strictly Business.

May 21, 2019 Tags: , , , , Mike Chirveno
Paramount Pictues

I received a referral for a new client a few months ago. The person who sent it was certain this business owner could benefit from working with me. Given the strength of the referral, I worked especially hard to make contact with the prospective client/business owner. I just did a quick count of the text messages we exchanged – 55, plus phone calls and two in-person meetings. For the last meeting, at his request, I spent the morning in two of his team meetings. Over lunch, as I reviewed what I heard and saw that morning, I made a couple of initial observations that I thought were pretty insightful. Apparently he agreed since he stopped me in mid-sentence and used his iPhone to email my recommendations to his staff. This happened twice during our meal.

I prepared a proposal and sent it within a day or two. Needless to say, I was feeling pretty good about landing this one. I had already provided a ton of value and completing the items in the proposal would have added additional top line revenue and improved customer retention.

A couple of days later, my proposal was rejected. I’m not sure why, but this one was particularly gut wrenching. I had worked really hard to prove my worth to the organization by providing value from the beginning of the relationship (This was typical of the way I work with a prospective client. I don’t sell. I just start consulting.) But since my initial recommendations were so enthusiastically embraced, I figured this was a done deal. FYI, in the time since this happened, I’ve seen one of my initial recommendations implemented via content in a customer email blast that I’m now subscribed to.

In the midst of all this, I thought about a well-worn quote from the Godfather. As the Corleone family discussed killing the person who attempted to murder their father, son Michael assured the rest of family the motive behind the planned kill was “not personal, but strictly business.” I’m not attempting to draw any equivalency between a rejected business proposal and planning a murder, but hear me out. Even though my rejected proposal was just business, it felt personal. There was an extra sting to this one because of the effort I had poured into it.

In reality, in the daily press of work, it’s business AND it’s personal. When we pour our passion, care and best effort into our work and it’s unappreciated, ignored or rejected, it feels like a punch to the gut. When our best proposal, painting, computer program or chicken parmesan isn’t good enough, it stings. It makes you want to gather up your stuff and go home. But would you want it any other way? I can’t imagine many things more miserable than work without passion. We long to leave a large piece of ourselves in every work product. We couldn’t live with just “mailing it in.” I’ve found the sting to be especially acute for business owners. Since everything about the organization is “them” – the product or service, the marketing, the sales, the delivery – when rejection comes, it feels especially personal.

So how do you navigate through when business feels personal?

I’ve told clients more times than I can count that your worth is NOT what you do at work. That is solid advice. If our worth is tied up in what we do or who we make happy on any given day, life will be a roller coaster – riding high today and in the depths of despair tomorrow. Work is fleeting. Find your worth in something that cannot be taken away. I find mine in my Christian faith. Find yours.

Divorcing our worth from our work is the foundation, but here are three practical things to do when business feels very personal.

  • Remember why you do your work the way you do it – You do it, because that’s the right way. Your training and experience inform the methodology and the result. Your work is your autograph. You’d do it that way again even if there were no audience, because that’s the way it ought to be executed. Take satisfaction in a job well done. If you knew a better way, you would have done it that way. If, by chance, you produced a sub-standard product this time, own it and fix it next time.
  • Commit to deeper learning and improvement – On the heels of doing the job the best you can do it, realize that all of us can improve our craft. We can all learn and grow. Use being rebuffed to motivate you to dig deeper and get smarter.
  • Use the rejection to narrow your focus – Simon Sinek would tell you to find people who share your “why”. Seth Godin would tell you to find your “tribe” – your smallest viable audience. When your work is rejected, understand that it wasn’t for them and use the feedback or in the absence of feedback, use the experience to close the circle a little more and produce work for people who are aligned with your values, share your taste and appreciate your approach to work.

The next time business feels personal – and it surely will – own it. Be glad you have a job you care that deeply about. And instead of buckling under the disappointment, harness it for your benefit.

Can Long-Term Strategic Initiatives and Day-to-Day Activities Co-Exist?

November 28, 2018 Tags: , , , , , Mike Chirveno

When a new initiative is rolled out in an organization, it’s often with a great deal of hype and enthusiasm. Everyone buys in and adoption is good, but then work life starts to happen. And that’s the problem with work life – there’s so much of it. The initial enthusiasm for the new initiative gets swallowed up with mundane everyday activities. Pile on top of that urgent matters that require immediate attention. Sometimes the urgent matters are problems – remedying a customer issue, dealing with an under-performing vendor or working with a wayward employee – but they could just as easily be a new opportunity that must be capitalized on now. These all conspire to drain needed resources from the new initiative. Many strategic plans, new sales campaigns and quality programs have died at the hands of work life.

What if there was a framework that you could employ during work life that let you navigate mundane activity, address urgent matters AND push everyone involved forward towards the overarching initiative?

In the end, the success of every new initiative is about execution. Execution that pushes the initiative effectively through the organization and into the work-a-day world of every executive, manager, supervisor and front-line employee. The Everyday Framework is a series of steps that reframes the mundane and the urgent and aligns them with the overarching initiative (if possible) and strengthens the organization. The exciting thing about the framework is that it’s easy to use for managers and supervisors and it’s easily “caught” so that everyone in the organization can apply it.

Reframe the Task – Stephen Covey reminded us to “Begin with the end in mind”. When navigating the mundane, fixing the urgent problem or capitalizing on the immediate opportunity, work to identify and verbalize how that task pushes the organization towards the overarching initiative (strategic plan, new sales campaign, etc). To illustrate, let’s say one of our new long-term strategic objectives is to decrease product delivery time from four days to two days for 90% of all orders. Today’s issue has to do with billing for an order from a brand-new customer. The customer wants to set up an account and be billed since they plan on doing more business with us in the future. However, upon submission of their billing information, we find some problems with their credit information and even find some unfavorable credit reporting in an industry reference publication. We could work with the employee who reported the problem to get this new customer set up and billed (and we should), but it would be best to reframe this problem and examine it in the light of our strategic initiative. In order to get this new customer his or her order in two days (in fulfillment of our long-term initiative), do we need to make changes to our order process to identify problems like this earlier? Do we need to look for a way to programmatically check credit reporting when the order is submitted online? Do we need to change the sales process so prospective clients with credit problems are excluded from the sales pipeline? Reframing problems – and slightly expanding their scope if necessary – attaches larger meaning to the problem and makes solving the problem tactical instead of operational, moving the organization closer to reaching its long-term initiatives.

Say No – Tied closely to the previous step is this one. If addressing today’s “new, great opportunity that must be acted on now” doesn’t push the organization closer to meeting its long-term initiatives, maybe you should just say no. Sometimes it’s difficult if the shiny new thing comes from someone at the top of the organization, but that’s the beauty of the framework. If everyone uses it, then every team member knows that every activity – mundane task, urgent problem or emerging opportunity – is subject to the same scrutiny. And if it doesn’t push the organization towards reaching the long-term initiative, the answer has to be “no”, at least for right now.

Put Employees First – This isn’t the right time for the “are employees the most important stakeholders?” discussion, but there’s no doubt they are an essential part of the organization. When urgent problems surface, they are, most of the time, screaming to be solved right now. Our natural reaction is to solve them ourselves or get them quickly to the person who can solve them best and fastest. What about using urgent problems as a training opportunity. Take an employee who has the requisite knowledge to solve the problem but has never had the opportunity and walk them through it as you solve it. Or pair them with the staff expert in solving the problem and let them walk through it together. It might take slightly longer, but afterwards you’ll have a deeper bench. If today’s urgent matter is an emerging opportunity, show the employee how you step through an evaluation to make the determination whether to pursue it further. This helps the employee to see how you evaluate opportunities in the light of the organization’s mission, vision, values and current long-term initiatives. If you give employees a raise every year, but never invest in their growth via training, your ROI on that employee diminishes – i.e. more money for an employee with the same skills.

Go from the Outside In – In the press to make to make problems go away or make the internal processes behind our mundane tasks easier for us, we occasionally make decisions that generate unintended consequences. Many times, the recipient of those consequences is not us, but our customers. By making life easier for us, we make it harder for them. Amazon famously sits an empty chair in every meeting. That chair represents the customer. It’s a physical reminder to make decisions that get the customer better products and services, make transactions more frictionless and deliver more value for their money. When problems surface, start with the customer perspective and work inward, navigating through the company’s internal processes. Solve the problem so the customer wins.

Start Small – Researching a new problem or sometimes navigating the most routine task occasionally exposes a much larger problem – one that is going to be expensive and time-consuming to solve. Since many times the problem is urgent, we’re tempted to throw resources (money, talent) at it so we can get back to business as usual. In the heat of the urgent moment is not the time to authorize a large expenditure. Jim Collins, in Great by Choice, taught us to “fire bullets, then cannonballs” – that is start small, spend the least amount of resources possible on a potential solution or opportunity, work out the kinks, prove our market or methodology then, after careful evaluation of the “bullets”, invest more heavily in a permanent solution (cannonballs). Don’t be pressured into long-term fiscal irresponsibility to solve a problem that’s causing temporary discomfort.

Be Accountable – The framework ceases to function if this piece isn’t in place. Every person at every level of the organization must exercise ownership for the success of the overarching initiative, the urgent problems that surface and the routine tasks of everyday work. Those who lead the organization must set the example, prioritizing their work so that urgent matters never overshadow important ones. Leaders must model the steps –

  • Reframe Daily Tasks in the light of long-term initiatives (a strategic plan, a new sales campaign, a new quality program, etc)
  • Say No to the daily tasks that don’t push the organization towards fulfillment of the long-term initiatives
  • Put Employees First by using immediate tasks as training opportunities, teaching new skills and how the immediate task aligns with long-term initiatives
  • Go from the Outside In by keeping daily problem solving customer-centric
  • Start Small by spending the least amount of resources on immediate problems and routine tasks thereby preserving resources to achieve long-term initiatives

 

Being accountable means owning a task until it is completed. It means taking responsibility for research, communication, execution, documentation and follow-up until every “t” is crossed and “i” is dotted. It means giving up the right to blame another employee, department, vendor or customer or counting on them to fix it. It means wringing all the learning out of problem or opportunity, so you can put the knowledge in your bag of tricks for the next time.

The Everyday Framework embraces Jim Collins’ “genius of the AND” operationally. Complete mundane daily tasks AND stay focused on long-term initiatives. Solve immediate problems AND develop employees. Evaluate emerging opportunities AND preserve resources to execute long-term initiatives.

Maybe I should have led with this, but here’s why the Everyday Framework is so important. Organizational growth, both financially and operationally, must be deliberate. Leaders often craft plans to make that growth happen. But, more times than not, those plans remain unexecuted because they’re simply overshadowed by the press of daily activities. Leaders can’t “will” their teams into execution, because team members lack the tools to balance or prioritize the conflicting demands of long-term initiatives and immediate tasks. The Everyday Framework is that tool.

The Best Methodology for Aligning your Team Probably Surfaced in 1982.

October 23, 2018 Tags: , , , , , Mike Chirveno

Commander’s Intent first appeared in the US Army Field Manual 100-5, Operations in 1982. However, it wasn’t original with them. It was borrowed from the Germans who developed it as they fought Napoleon during the French Revolution. The Germans called it Aftragstaktik.

So, what does this 225 year-old methodology have to do with your organization in 2019? Traditionally, military operations were centrally controlled. High ranking officers would diligently plan troop movements and equipment deployments, carefully orchestrating every skirmish. But, when the first bullet was fired, the plan immediately became outdated. Enemies didn’t respond as anticipated, equipment malfunctioned, soldiers were wounded or killed and couldn’t execute the carefully conceived plans. At that point, troops up and down the chain of command were paralyzed or limited in their ability to respond because they only had the original plan and when it became impractical or impossible to execute, they had to improvise which may or may not have been in the best interest of the mission or in the best interest of their fellow soldiers.

Enter Commander’s Intent. Commander’s Intent succinctly describes what constitutes success for the operation – the final desired end state. At the outset of a mission, the ranking officer would describe to a small group of subordinates the desired end game of a mission. The officer would also define guardrails for these subordinates and give them authority to make decisions within the bounds of these guardrails all pointing towards the successful completion of the mission. These subordinates would then pass the strategic intent of the mission to their small group of subordinates and define for them a more narrow set of guardrails between which they could make independent decisions all while pushing towards the successful completion of the mission. This repeated until the lowest ranking soldier in the fight understood the Commander’s Intent. With the Commander’s Intent well in hand and the span of control understood, officers and soldiers up and down the chain of command could more easily respond to rapidly changing conditions on the battlefield and, with their understanding of the end game, make adjustments that took into account new realities and pushed towards the successful completion of the mission. Paralysis and indecision were replaced by real-time intelligence gathering and mission-appropriate “counter-punching”.

These are probably obvious, but there are a few key ingredients in this process and everyone involved must buy in –

  • Everybody must be crystal-clear on the end game (i.e. the Commander’s Intent). It is the responsibility of superiors to explain it simply and fully and to spell out the “why” behind it. It is the responsibility of subordinates to keep asking questions until they get it and the rationale behind it. Nothing less than full understanding up and down the chain of command will do.
  • Everybody must understand their span of responsibility. The guardrails must be clear so that everyone knows what they control for themselves and their subordinates.
  • This crystal-clear delineation of responsibility must be accompanied by trust. Because subordinates have clear visibility into the thinking of superiors they can see the strategic value of the mission. Because superiors have clearly defined the outcomes and span of control, they can trust the field-level decision making of subordinates knowing they will be aligned with fulfilling the Commander’s Intent.

Your challenge as the boss is to relinquish autocratic control. To make this work, you must embrace your responsibilities as leader, coach and teacher. #CommandersIntent

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The application in your office, factory or farm is apparent now, but let me make one more important point. To make this work, ego must be put in check. Will every downstream decision be perfect? Doubtful. Will there be an expensive mistake from time to time? Probably. But the growth in your team and the improvement in dynamic decision-making skills in your organization will more than make up for it. This is the methodology for building agility in your organization. Your challenge as the boss is to relinquish autocratic control. To make this work, you must embrace your responsibilities as leader, coach and teacher.

What Is It Exactly That You Do?

September 13, 2018 Tags: , , , , , Mike Chirveno

I have one of those jobs – Strategy Consultant. Even after following the advice of branding and messaging experts, what I do doesn’t seem to be crystal clear to the people I want to reach the most. Thankfully, I got some help recently from one of those very people. This potential client and I have talked several times – in person, on the phone and via email – but this interaction was like somebody flipped on the light in a dark room.

I sent this potential client a service offering I had just designed. I was proud of it and thought it was just the ticket for him and his organization. His response caught me off guard because, in our previous meetings, I thought I had done such a good job of explaining my value proposition. But his response made it obvious I had not.

In his response to my email, he told me that before he signed on the bottom line, he’d be interested in knowing what strategy I had in mind for his organization. Seems logical, right? I’m a strategy consultant so I should bring one with me into a consulting engagement. At that point, I knew I’d failed miserably in delivering the message.

The most rudimentary skill in strategy consulting is starting an engagement with an unbridled amount of curiosity. Add to that a pile of probing questions and a proven framework with which to conduct the strategic planning exercise.

The most rudimentary skill in strategy consulting is starting an engagement with an unbridled amount of curiosity. Add to that a pile of probing questions and a proven framework with which to conduct the strategic planning exercise.

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A strategy consulting engagement at the outset is a discovery process – discovering the values, priorities, goals and dreams of the owners and managers, discovering the true, current state of the organization, discovering the current state of industry and unearthing every other piece of useful information you can find.

It’s only at that point we create what most business owners and manager consider “strategy”. With a clear picture of the organization’s current state and a clear vision of the desired future state, we can craft the roadmap to move the organization from current state to the future state – the strategy.

The component parts of the strategy, depending on what is learned during the process, could touch any number of disciplines in the organization. For example –

  • People – Are the right people in the organization? Are they equipped to do the work the company needs today and in the future? If not, what is the best way to make that happen? Are they being managed well? Are they being compensated correctly?
  • Operations – Does the organization operate efficiently – producing the maximum number of outputs with the minimum number of inputs? Does the quality of the products or services satisfy the customer, maximizing sales and minimizing or eliminating complaints? Does the supply chain obtain the appropriate materials from the highest performing vendors with the best pricing?
  • Marketing – Does the organization tell its story in a compelling way? Does the organization effectively target the best prospects and speak to them in ways are that are meaningful to them? Is the organization effective at identifying the jobs current and potential customers need to be done?
  • Technology – Does the organization employ technology that speeds delivery of products and services? Is the organization effectively managing the relationships with technology providers?

In a well-executed strategic planning exercise, we will –

  • Organize and quantify what the principals know intuitively. We’ll nail down those things that they know exist. They’ll know how many, how often, which ones and more importantly, how they impact the long-term health of your organization.
  • Discover what they don’t know or reverse errant perceptions – Sometimes, the things they think they know intuitively aren’t true at all. A good strategic planning methodology accurately assesses the real truth about what’s going on with employees, vendors, customers and shareholders.
  • Focus the attention of the owners and executive team on a relatively small set of levers that need to be pulled to make larger, investment-grade moves that propel the organization forward – outpacing competitors and protecting against new entrants.
  • Marshall the resources of everyone in the company towards one or two specific strategic objectives – The end game of the exercise is to identify one or two things that transform the organization. The exercise might uncover four or five or ten things that need attention, but organizations can’t change ten things at a time – just one or two. A good strategic planning exercise will identify the one or two highest impact items and create a roadmap for executing those items – pushing down the implementation through the entire organization. When those are done, the organization can move on to the next item or two.

 

There’s more to the “what is it exactly that you do” question, but that’s a good start. It’s a joy to me to work with owners and managers to help them dig deep into their organizations, gain new insights into their business and watch them set a course that means success for them and meaningful work for those on their team.

If I’ve still not answered the question, let me know. If you’re overflowing with kudos for this extremely clear explanation, I look forward to that feedback too.

We’ve Got Data, Yes We Do. We’ve Got Data, How About You?

February 28, 2018 Tags: , , , , Mike Chirveno

For those of you who had a quick flashback to high school sports complete with cheerleaders, sorry about that. But, in the age of POS systems, big data, analytics and visualizations, it’s hard to believe we’re still asking this question.

Most of our businesses, even small businesses, are awash in data – transactional data from our ERP systems, customer sentiment from our marketing management systems and financial data from our accounting systems. Long gone are the days when we polled subsets of customers to predict the behavior and preferences of the population at large. We can easy pull together and analyze the actions of every one of our customers and the financial impacts of those actions in our organization. We know what they bought, when they bought it, what they paid for it and how they liked it after the fact.

So why do we still struggle to make data-driven decisions? The short answer is cognitive biases – a mistake in reasoning, evaluating, remembering or other cognitive process, often occurring as a result of holding onto one’s preferences and beliefs regardless of contrary information (Chegg). As Anais Nin said, “We do not see things as they are, we see them as we are.” In my work, I’ve observed 4 specific obstacles to data-driven decision making. I want to offer some suggestions on how we can deconstruct them and replace them with something better. As futurist and philosopher Alvin Toffler said, “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”

We believe all smart people think the way we think. It’s not surprising that we interact with people who think differently than we do. The variety in our nature, nurture, experience and education guarantees that no two of us are exactly alike. However, the remarkable thing is, we think those people who do think differently from us are not nearly as smart as we are. We believe, that presented with the same set of facts, all smart people will draw the same conclusion, make the same selection or opt for the same methodology. That’s not the case. Different isn’t dumber. Different is just different. When we examine data and discover findings that don’t square with us intellectually, I see a couple of choices – make a decision that aligns with the data and entertain the option that the data’s disagreement with your own opinion might not be an indictment of your intellect or, if you just can’t get over it, dig deeper and find the why behind the findings. Sometimes the data presents customer choices that have a root that you’ve yet to discover. Whichever option you choose, you’d probably best judge your intellectual horsepower with this quote from F. Scott Fitzgerald, “The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.”

We believe that the way things worked in the past will be the way they will continue to work in the future. We all seem to have an affinity for systems and processes that we know and have experienced. The line at the grocery store is more comfortable than the Blue Apron box delivered to our home. However, when we see data moving towards a new sales channel or towards an emerging product and away from an existing product, we must muster the courage to follow the data. If we, personally, are an early adopter, it might seem easy. But, if we’re part of the late majority in adopting a new product or service, it borders on the painful. Battling this bias requires more academic rigor than the others. I’d encourage you to examine the histories of formerly successful companies who assumed that the business model they had ridden for, in many cases, decades would continue to return stellar revenues for them going forward. Think about Digital Equipment Corporation (DEC), Kodak, Blockbuster and Toys-R-Us. When well-vetted data says it’s time to make a change, it’s time to follow the data.

We tie our own personal worth and identity to our tastes or work product. Maybe I should leave this point to Dr. Phil, but I’ll take a shot at it. Over the course of a long career, we will all come up with some great ideas. We’ll also come up with others that could use some work. Unfortunately, we’ll probably love both types just the same. When the data shows that the widget we designed isn’t gaining traction in the widget-buying community, we take it personally. Sometimes even more painful is watching customers lose interest in a product or service in which we have an intense personal investment. Maybe it’s been the staple of the organization for a very long time. The customer’s decision to purchase something else feels like personal attack on us. Make no mistake – you are not what you do. Your worth is not the number of times your product is rung up at the register, sold online or positively reviewed on Google or Facebook. Living that way will drive you crazy. Data is just data. It reflects the collective sentiment of the population who provided it regarding a single item or interaction. It is not a measurement of the worth of the person who created it. Get your worth from something that cannot be taken away. I personally find it in my Christian faith.

Make no mistake – you are not what you do. Your worth is not the number of times your product is rung up at the register, sold online or positively reviewed on Google or Facebook. #datadriven

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When the data creates this situation – and it inevitably will – separate your personal tastes and most-prized creations from your personal worth. To paraphrase Rudyard Kipling, “treat the two impostors of customer love and customer rejection just the same.” Make decisions consistent with the data and move on.

We believe that experimenting with something new is expensive and risky. As we examine the data and the tide seems to be turning to new products or delivery methods, we assemble, in our heads, an entirely new manufacturing facility, a complicated new delivery infrastructure and sophisticated, new customer service capabilities. Each of these carries an excessively high price tag. Before we know it, in our heads, we’ve retreated to the comfort of the status quo before we even start. If the data indicates movement towards a new product or service, it’s a good time to employ a methodology from Jim Collins’ book, Great by Choice – Fire bullets, then cannonballs. Before creating an expensive, new infrastructure for a new product or service, construct a low-risk, low-cost, low-distraction experiment to prove the new direction indicated by the data. The ability to calibrate the offering by taking small, measured shots (bullets) and evaluating their appeal and effectiveness can be followed by crafting full-blown products (cannonballs) with the benefit of the empirical evidence you’ve gathered during the test. Some concrete ways to implement bullets then cannonballs – create a 3-D printed version of a new product instead of a full-featured version from an assembly line, roll out a service to a small test segment of your customer base, outsource the support of a test item to a third-party who could rapidly ramp up the support function and quick shutter it when the test is over.

Making the move to data-driven decision making isn’t easy. It often flies in the face of our “gut” and it often has a higher emotional price tag. But, when it’s all said and done, it’s the right thing to do for the organization. The findings from data analysis force us to have discussions we need to have. Implementing data-driven decisions reduces unnecessary risk and position us for success. The new decisions will create more data that we can examine and use to further refine our work.

Five Strategic Things I Wish I Could Force You to Do in 2018

December 21, 2017 Tags: , , , , , Mike Chirveno

There’s not a better job in the world than being a consultant. I have the opportunity to see the inner workings of multiple industries and competitive companies inside those industries. And, I get to work with great, smart people all the time. The one thing I can’t do, however, is make decisions for clients. I supply informed opinions, actionable recommendations, a framework for execution and accountability to get it done, but I can’t pull the trigger.

But, if just for a moment, I had free reign in every client organization in 2018, here are five things I would do.

Ratchet Up the Employee Engagement – According to a Gallup survey, unengaged employees comprise 70% of the workforce. These unengaged employees collectively cost business owners $550 billion annually in lost productivity. The mechanics of creating, increasing and retaining engagement are not mystical, but they do require a specific set of attitudes and behaviors from employers. To get started, download Employees As, a primer for Employee Engagement.

Innovate Using Jobs Theory – Of all the big thoughts devoted to innovation over they past 20 years, I find those of Clayton Christensen in his excellent book Competing Against Luck to be the most practical, most easily grasped by an organization and most likely to yield a viable new product or service. Jobs Theory positions innovation as supplying the best alternative for the progress a potential customer wants to make in resolving a problem.

Implement a Plan for Focused Execution – Most organizations either throw up their collective hands and run from crisis to crisis OR undertake strategic initiatives that have too many moving parts. To effect real change in an organization, only work on one or two initiatives at a time. When those are done, move to the next one or two. Successful execution requires a laser-like focus, shared vision, education, identifying the correct leading indicators, overcoming the obstacles that surface in the course of the project, great teamwork and accountability.

Clarify Your Messaging – Great marketing and subsequent sales all hinge on an easily understood message. Make sure potential customers know exactly what you do. The message from salespeople, your company website, your social media channels and your sales collateral should be simple and unified. The value proposition should be communicated in language that correctly identifies the client’s problem, positions your organization as a capable resource that can guide them to resolution and describes a desirable future state.

Set Aside Time for Deep Work – I can’t say enough good things about Cal Newport’s book Deep Work. I was challenged by the empirical and anecdotal evidence he presented to regularly and methodically step away from our distraction-fueled world to do work that requires complex, contemplative and deep thought. It’s changed the way I approach my preparation for consulting engagements and the engagements themselves. It’s the best defense I’ve ever seen again distraction and the always present “tyranny of the urgent”. Make time to do this no matter what else is going on in your organization.

There are very few guarantees in this world, but if you take these five things into your organization, I can almost promise that 2018 will look markedly different from 2017.

Again, I encourage you to download the Employees As guide to Employee Engagement. I also have resources available for the other strategic initiatives discussed in this post.