Strategy lessons from septuagenarian mall-walkers.

I used to work at Asics many years ago, where the strategic direction was to focus on the serious athletic enthusiast. We made wonderful, relatively high-priced (and high-margin) shoes that addressed their needs. Unfortunately, we also wanted to chase the sales volume that major retailers like JC Penney and Kohl’s could provide. That required us to make low-priced, low margin shoes.

Our designers and developers were overburdened by the need to produce great shoes for both enthusiasts and for, well, septuagenarian mall-walkers in Miami. That bifurcation of work made it impossible to handle all their responsibilities. It also confused them as to what our business strategy actually was. As a result, we missed deadlines, made product development errors, and didn’t deliver to either market terribly well.

It’s not exactly a Copernican insight to say that your strategy should match (sorry, I should use the all-important buzzword, “align” with) your daily work. If it doesn’t, you run a serious risk of overwhelming yourself and your people with pointless activity that leads nowhere—except to feelings of overwhelm, missed deadlines, and unmet commitments.

As I’ve written about before, what often manifests itself as a time management “problem” is actually a mismatch between your strategic direction and what you’re asking people to work on. Because people are being pulled in two or three different directions, they can’t get any of their important (i.e., strategically aligned) work done. They’re busy serving pretzels when they should be piloting the plane.

Asics wasn’t the only company in this boat, of course. According to data in The Strategy Focused Organization, 80% of businesses fail to accomplish their strategies because of poor execution. 65% percent don’t align budget with strategy. Less than 35% of mid-manager activity contributes directly to the execution of business strategy, and less than 10% of front-line employees can articulate the institution’s strategic imperatives.

The numbers may not have been exactly right, but that sure describes Asics when I was there: a whole bunch of activity not tied to the company’s strategy.

Next time you see overwhelmed staff and unconsummated strategy, consider those “problems” as symptoms. The real problem—the root cause—may very well be strategy that’s neither clearly defined nor clearly articulated.

At Asics, we made the tough decision to adjust our product line to match our espoused strategy. We dropped the bottom end of our product line—saying goodbye to a sizable chunk of revenue and earning the rather considerable wrath of our sales reps. It sure hurt for awhile. But it freed up our designers and developers to do the right work, and in the long run it positioned us to build a truly sustainable business that leveraged our core strengths. Three years later we had regained all the lost sales and built a rock-solid position at the high-end of the market.

Who are your septuagenarian mall-walker customers? Bringing clarity at the top level leads to focused action at the front line. And that’s your job.

When good data go bad.

Bob Lutz, longtime car guy who held senior leadership positions at GM, BMW, Ford, and Chrysler, tells a story about the feedback that David Davis, an auto industry expert, received on a speech he delivered at GM:

Sometime in the early ’80s, he’d accepted a gig as speaker to a large group of GM executives. The speech appeared to go well, and the applause felt genuine. David went home pleased and thought no more about it until he received the following letter:

Dear David:

You asked for feedback on your remarks at our recent conference. The data is just now available.

The rating scale was zero to ten with ten being “best.” The five non-GM speakers had scores ranging from zero to ten. Yours ranged from three to ten. The five “outside speakers’” average scores ranged from 5.25 to 8.25.

Your average was 7.35.

Two speakers had higher scores than yours. Your standard deviation from the mean was 1.719 and ranked second among the variances, showing that most people had a similar opinion about your remarks.

I personally enjoyed your remarks very much. Your refreshing candor, coupled with your broad understanding of people, product, and the market, gave us exactly what we asked you for—”widened competitive awareness.”

Thank you for your participation.

Absurd, right? Hopefully you didn’t snort the milk from your Cheerios out your nose as you read this. It’s a miracle that GM survived as long as it did with this kind of bureaucratic plaque clogging its organizational arteries.

But before you sprain your shoulder patting yourself on your own back for how much smarter you and your company are than big, stupid GM, think about the birth of that colossal dysfunction. At some point, a diligent, well-meaning employee—or her manager—probably wanted to help improve the quality of presentations. And he probably read in business school that what matters gets measured, so he created a simple 10-point rating scale.

[Stop here. Does your organization use one of these scales to evaluate speakers, or training sessions, or the selection of deli meats in the company cafeteria?]

It’s a short—very short—step from a 10-point rating of an individual event, to a comparison of multiple events. And an even shorter step from that comparison to a deeper, more thorough statistical analysis, replete with r2-values and more Greek letters than you’ve seen since your last purchase of foreign yogurt.

Organizations, and individuals within organizations, drive themselves to the land of absurdity all the time because they don’t ask the first question that lean thinkers focus on: What is customer value?

Learning that a speech was well received with a score of 7.35 out of 10 is valuable, important, and worthwhile for the customers (in this case, the speaker and the people who invited the speaker). The other data, not so much. The Outside Speaker Effective Analysis Group could have identified that value by simply (gasp!) asking the customers what information would be helpful for them. Hell, there probably wouldn’t even be a need for an Outside Speaker Effective Analysis Group in the first place had GM focused on this question.

In my mind, this is where traditional approaches to productivity go wrong. These approaches focus on improving the efficiency of producing these reports without considering whether or not they should be produced in the first place. The lean approach—first, identify the value—is, to me, a far better way to operate. And once you’ve identified the value, you can apply the lean tool of 5S to the information: sort the value from the waste, set it in order, systematize the delivery of the information, etc.

Of course, the waste from not focusing on customer value isn’t always as obvious as having an Outside Speaker Effective Analysis Group (The existence of a department like that is pretty much a dead giveaway.) Sometimes it’s subtler, like having the IT department generate dozens, or even hundreds, of reports per week, most of which go unread (as happened at one of my old employers).

Unless you continually evaluate your own generation of data, reports, and statistics, you run the risk of becoming the punch line to a joke and an object lesson in making good data go bad.

Tomorrow’s Middle Management Challenge

Middle management has been gutted like a trout since the recession started in 2008. Unfortunately, the job growth we’re seeing now isn’t rebuilding this class of managers: most of the new positions are at the bottom of the pyramid, primarily minimum wage and temporary jobs. In fact, out of the 260,000 jobs created in April, 60,000 came from McDonald’s.

The evisceration of middle management, combined with a swelling front-line work force, means that span of control is increasing. The burden placed on the remaining managers — already stretched thin by layoffs — will only get heavier.

This situation will challenge their ability to work effectively and execute daily, weekly, and monthly plans. And as I wrote last week, this necessitates developing clear organizational strategy; limiting the number of priorities each person is responsible for; simplifying systems and processes; establishing manageable cultural expectations; and finely honing individual skills.

Is your organization ready for this? Are you setting your middle managers — arguably the backbone of any organization — up for failure or success?

June 2011 Newsletter

No. You don’t have 13 priorities. You only have one. And if you want to have a prayer of completing getting any of your important work, you’ve got to come to grips with that.

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The Iceberg that Sinks Performance

I’m back.

The last few weeks have been hectic for me: I finished the manuscript for my book, A Factory of One, and submitted it to Productivity Press, who will be publishing it in November or December this year. Many thanks to all of you in the lean community who provided feedback, comments, stories, and challenges to my thinking along the way.

I’ve also spent a long week clarifying my thinking about how lean concepts and tools tie into time management and individual performance. In the spirit of visual management, I thought that drawing this relationship would be helpful. This is what I came up with:

Obviously, I’m no Rembrandt. But I think this iceberg does a pretty good job of expressing the actual situation that I’ve seen over the past few years when people complain that they’re overwhelmed, or that their group needs time management training, or that they simply don’t have enough time to do everything. Their complaint — the visible symptom, the part of the iceberg above the water — is not the problem at all. It’s a symptom. The root cause — the real problem — lies below the waterline. And while it’s invisible, it can — and will — sink the ship.

Time management “problems” are really just manifestations of dysfunction in one or more of the following areas: strategy; priorities; internal systems and processes; corporate cultural expectations; or individual skills. And this is why very often time management programs fail to improve the lives of the people who so diligently construct lists, who carefully discriminate between urgent and important, who pursue inbox zero, who never check email in the morning, etc. All those approaches — as valuable as they are — only address the problems in individual skills. They ignore the systemic issues that undermine individual performance. You can try not checking email till 11am, but if your boss reams you out for missing an urgent email she sent at 8:15am, you’re probably not going to stick with that 11am plan for very long.

Carrying the iceberg metaphor a bit further, even if you do lop off the top — even if you address the symptoms by adding staff, or bolstering a person’s individual skills, the problem will just rise to the surface again. At some point you’ll have to get to the root causes, or you’ll end up sinking the ship.

May 2011 Newsletter: Jim Collins Lives Lean

Take a page from Jim Collins: learn to apply lean techniques and improve the quality of your own work.

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Those BHAGs Will Kill You.

Jim Collins and Jerry Porras coined the term BHAG (“big, hairy, audacious goal”) in their article, Building Your Company’s Vision, back in 1996. Since that time it’s become so much a part of the lingua franca of business that you practically can’t call yourself a leader if you haven’t set some BHAGs for your company, your team, or yourself.

It’s fascinating, though, to see just how many BHAGs are entombed in 2” D-ring binders collecting dust on people’s bookshelves, with pretty much zero chance of actually being implemented. There are all kinds of reasons—you don’t have the time or money or people, for example, or first you have to take care of your boss’s stupid pet project, or you’re trapped in too many meetings—but regardless of the excuse, those BHAGs are joining flying pigs in the list of things you won’t see in this life.

Now Shawn Achor, author of The Happiness Advantage: The Seven Principles of Positive Psychology that Fuel Success and Performance at Work, explains why in an article in CIO:

Goals that are too big paralyze you. They literally shut off your brain, says Achor.

Here’s what happens to your brain when faced with a daunting goal or project: The amygdala, the part of the brain that responds to fear and threats, hijacks the “thinker” part of the brain, the prefrontal cortex, says Achor. The amygdala steals resources from the prefrontal cortex, the creative part of the brain that makes decisions and sees possibilities.

“We watch this on a brain scan,” he says. “The more the amygdala lights up, the less the prefrontal cortex does.”

Breaking a big goal into smaller, more achievable goals prevents the fear part of your brain from hijacking your thinking cap and gives you victories.

Don’t get me wrong: I don’t think your lizard brain (in Seth Godin’s term) is the only reason that so many organizations fail to achieve their BHAGs. Corporate inertia has a thousand fathers—reading any Dilbert is proof of that. But the daunting prospect of a BHAG, combined with a lack of clarity of how, precisely, to get from here to there, often plays a role in paralysis at the individual level.

In companies that struggle to realize their BHAGs, it’s frequently because no one has taken the time to map out precisely what small steps are needed to reach them. When I worked at Asics years ago, we set ourselves a goal to dethrone Nike as the number one brand among running enthusiasts. (To put this goal in perspective: Nike was a $4 billion company at the time. Asics was $180 million.) Pretty ambitious stuff for us.

We laid out a careful roadmap to reach this goal: recasting our running product line by eliminating lower-end shoes and building our first legitimate high-end shoe; providing special sales and customer service support to specialty running stores; creating special sales programs; focusing our advertising on the core running enthusiast; and having the product marketing and development teams spend more time visiting specialty running retailers during the product development stage. No step by itself would have done the job, but the steady accretion of these moves eventually toppled Nike among these customers.

We didn’t talk about BHAGs then. (That was before Collins’ article, for one thing.) But we did achieve one, by rigorously implementing a series of small steps. And because we were dealing with small steps, we didn’t have to worry about illuminated amygdalae, or struggle to clarify the vacuous ambiguities that too often paralyze good people.

Why is (business) execution so hard?

Why is business execution so hard? Why are offices littered with the dessicated carcasses of strategic plans? Why can small companies work miracles with a tiny staff, but large organizations can’t even get out of their own way?

I don’t have all the answers to those questions. But I do have some of the questions that you should be asking to get to the bottom of this issue. I just co-authored an article at Fast Company that might help you think about the problem more clearly. Read “Are You Excited About Your Business Execution & Collaboration?” here.

Reducing the communication burden.

Exhibit 1: Computer consulting firm Atos Origin announces that it’s abandoning email within three years. The CEO says that “information pollution” burdens managers with an unsustainable load of 5-20 hours of email per week (and climbing), so the company is shifting to social media in order to lighten the load.

Exhibit 2: Google announces that for part of each day, new CEO Larry Page and other top executives will sit and work together in an area of the company’s headquarters that’s accessible to all employees. As part of the effort to recapture some of the nimbleness and entrepreneurial speed of a smaller company, he’s also encouraged employees to pitch him new product ideas in emails of 60 words or less.

I think we’re seeing a trend here. As organizations grow in size and complexity, the volume of communication (via email or meetings) explodes. But it’s becoming painfully obvious that the use of meetings and email just doesn’t scale very well. Past a certain point, the very tools that expedited communication at a smaller scale begin to throttle it. Organizations sclerose under the weight of their tools – too many emails, too many formal meetings. The attempt to communicate crowds out all other work — even the value-creating work. Nothing gets done, and people bemoan the hulking, slow-moving battleship their company has become.

Certainly, there’s no panacea for this problem. Atos Origin has taken a technological approach, while Google has taken a physical approach. W.L. Gore has, since 1965, taken an entirely different path: no teams bigger than 200 people, so as to ensure that it will be free of stifling bureaucracy. I worked with one client that used to hold an unending string of formal (and time-consuming) status update meetings to ensure that product development teams would cross-pollinate ideas. They eventually gave up those meetings and just bought the teams pizza for lunch every other month. That worked better and eliminated the time suck of needless meetings.  Other firms are adopting visual management systems—often, low-tech whiteboards or corkboards—to communicate important information quickly and efficiently. Still other organizations are now using A3s to not only aid problem solving, but also to improve the efficiency and effectiveness of communication.

If the goal of lean is to provide the greatest value at the lowest possible cost, then there’s plenty of room for improvement in our communication. But the first step is to realize that the status quo just isn’t good enough, that the way we communicate is needlessly costly and inefficient. Atos Origin, Google, and Gore are taking steps to eliminate that waste. What about you?

Chinese acrobats, Italian judges, and traffic jams.

You might want to reconsider saying yes to the latest project that your boss drops on your desk like a side of beef. Saying no might help you do a better — or at least a faster — job.

Turns out that managing so many concurrent projects that you’re the white-collar equivalent of a Chinese acrobat spinning dishes doesn’t work so well.

A study of Italian judges who were randomly assigned cases and who had similar workloads found that those who worked on fewer cases at a time tended to complete more cases per quarter and took less time, on average, to complete a case. The authors concluded that

Individual speed of job completion cannot be explained only in terms of effort, ability and experience: work scheduling is a crucial “input” that cannot be omitted from the production function of individual workers.

The problem is that too much work-in-process causes a system — whether machine or human — to bog down.  In a phrase that will likely make Jim Benson and Tonianne deMaria Barry smile (or call their lawyers), the MIT Sloan Management Review draws the analogy that

excessive multitasking may result in the workflow equivalent of a traffic jam, where projects get backed up behind other projects much the way cars get stuck in traffic when there are too many on a highway at once.

If this phrasing rings a bell, it should: here’s how Jim and Tonianne made this point visually (check out slide #7):

Personal Kanban rationale

A few weeks ago, I wrote about the need to use your calendar as a tool to assess your daily production capacity, but not with the goal of filling up every minute of each day. Overloading the system writ small — stacking up tasks during the day like 747s over LaGuardia — is a bad idea. But overloading the system writ large — scheduling too many legal cases or too many projects at one time — is also a recipe for slow turnaround, frustrated customers, sub-optimal performance, and probably premature hair loss.

Remember, you’re not a circus performer. Neither your boss nor your customers “ooh” and “ahh” because you’re juggling 26 projects at once. They ooh and ahh when you deliver the goods quickly and with perfect quality.