Category Archives: Decisions

Future Jobs

This is a tough topic to tackle without sounding too trite or stale. But I now have children entering the job market and I have been continuing to do some networking with several people who are in a job search mode so it is on my mind. As usual I got to thinking about where to go and how to position for the jobs of the future. With the continual drive for cost reductions and all the talk about bringing certain jobs back on shore (as others continue to go off-shore), is there truly a way to future proof what you do for a living? I don’t know for sure, but as usual I do have a few thoughts on the topic.

It must be acknowledged and accepted that the rules of the game are changing. We must adapt or it probably will not end well. There will be those who will stubbornly hold out the hope for a return to the days when this country could manufacture and build its own products, and people could earn a living doing it. This was an ideal and golden time, but as we have all seen, there may be scattered exceptions, but by and large that economic structure has gone.

I think this was only the start. Almost every role that can be defined within an organization, can be subject to the same risk of off-shoring, out-sourcing, or whatever description you may choose to use for being moved to a cheaper labor oriented area. Production was moved off-shore because the labor was cheaper. The quality may not have been as good initially, but that can be and for the most part has been rectified. We all wanted the cheapest products possible, because they were good for the bottom line.

We have already seen instances where financial and accounting functions are being out-sourced and off-shored in the name of reducing costs. These are largely looked at as internal functions. They are usually associated with the overhead costs and functions, and as we know, everyone wants to reduce overhead. There are many people across the globe who are trained in the financial and accounting disciplines that perform these functions cheaper than they can be performed here.

We have already seen many instances where Research and Development, what was once a cornerstone of our growth engine, have been moved off-shore to lower cost countries. It seems that there are also many places with smart people who can write code and create products, with many of them working for significantly lower costs than here.

We have also seen the relocation and / or reduction of some of the Human Resource functions to other locations. Many of the repetitive steps associated with the simple recruiting and support functions can be and have been moved to lower cost countries. There has also been an explosive growth in the utilization of self-help and web portals as replacements for actual people.

Service and support is also similarly questionable. It is possible that this trend specifically associated with service may be reversing, but it is still highly probable that when you call for help or support on many products, your call is directed to an off-shore, low cost call center somewhere else in the world. People who predominantly talk on the phone as a function of their job, can have a phone to talk on in just about any low-cost country.

So, against this type of cost cutting and low cost country focus, what do we do for a living going forward?

I think for starters focus on one word: Customers.

The majority of business functions and disciplines that are at risk in being moved to low cost countries do not interface with customers.

Yes, I know that call centers and service have moved off shore and they deal with customers. And again, by and large customers don’t like it. It has been surveyed and noted as a major customer dissatisfier when it comes to support from vendors. And if given a choice almost every customer would prefer to deal with someone in their own time zone and their own country when it comes to support.

As I said, companies are recognizing what their customers want and this trend may be slowing, if not reversing as some of these service related positions return on-shore.

One of the inviolate axioms of business to business commerce is that “People buy from People”. It used to be the same for business to consumer commerce, but the internet seems to be changing that for commodity type transactions. I’ll get to that part a little bit later.

Selling will always be a function that requires direct customer interface. It will also invariably require face to face exchanges between the seller and the customer. In short, it cannot be off-shored easily, if at all.

As we continue to evolve to a service oriented economy, and as products continue to become more and more complex as well as more commoditized and interchangeable, having people who have the ability communicate specific value propositions, and more importantly be able to sell those value propositions in the new economy will be at a premium.

On the reverse side of the selling to customers, will be the implementation of the complex products and services that have been sold. It doesn’t matter if it is a good or service that has been sold. This brings us to the operations team. The reality is that most customers will not accept a “Do It Yourself” approach to the implementation of the good or service that they have purchased. They are usually going to want the company that sells it, to also be the one that puts it in.

Again, the direct customer interface from the operations team on the implementation of the customer’s purchase will be a key to that customer’s satisfaction, and potential future purchases. It can’t be off-shored and it can’t be minimized in its importance. The best product in the world can be sold, but if it is not implemented well, the customer will not be satisfied. This will be the case with both product and service implementations. Having good customer interfacing operations teams will also be a non-negotiable requirement for the future.

I have looked at specific individual customer interfacing roles up to this point, but what about broader multiple customer roles, such as Marketing?

For the most part in the past I have considered marketing an overhead function with a two-drink minimum. This is said with just a little tongue in cheek. However, if we note that individual customer interfaces are important then it is not too far a leap to expect that individual markets are important as well. Even though there is much written about the “global” economy, I don’t think that goods and services can be positioned and marketed the same way in Canada as they are in Brazil.

No one in Brazil will know what a Tuque is, and I have met very few in Canada who understand the importance of a good Caipirinha. Expecting one marketing approach to work in both regions will probably not be a good recipe for success. I do not think there will be a good or reasonable substitute for local market knowledge, cultural awareness, presence and positioning.

I suppose that the same could be said about lawyers and the specific legal requirements of each market. However, the less said about lawyers, the happier I find myself to be.

So where does that leave the organizational and business jobs of the future?

I think that it will be those outward facing, and customer interfacing roles that will be the jobs of the future. I don’t believe that customers will stand for the out-sourcing and off-shoring of them. It is the personal relationships and the trust that is built by direct customer interface that is the basis of a successful business relationship. There may come a time where that changes, but that may be in the “next” generation of business.

That means that the internal facing business and organizational roles are at risk as a function the eternal drive for lower costs. Accounting, Finance, HR (some of the functions), Research and Development and Production / Manufacturing, all to one level of success or another can be and have been sent to lower cost countries.

What is also interesting to me is that historically a little more than forty percent of CEOs that are hired come out of the finance discipline. In good times this number percentage goes down as growth is a focus and in tougher times it goes up as the bottom line takes on even greater importance. Many others come from the accounting and engineering functions as well. My point is, as many of these internal accounting, finance and engineering functions get out-sourced, where will the future leaders come from?

If these entry level (and other) types of roles and positions are sent elsewhere, where will the future leaders get their starts. It is in these roles that we learn and gain experience. If the roles aren’t there to provide the experience and jumping off points, are companies also off-shoring the development structures that the future leaders have used to get started?

This could mean that in due time, future leaders would predominantly come from those countries that the jobs were off-shored to.

A Race to the Bottom

I had a phone call drop the other day. It wasn’t a big deal. In this wireless world I think we have all had phone calls drop. We also get static, interference and garbled messages, but hey, we’ve gotten used to it. The difference was that this call wasn’t a wireless call. It was a call using a land line desk phone. Come to think of it, having a land line call drop isn’t such an uncommon event these days either. I have commented in the past that not quite good enough is now good enough. I think this is just a symptom of what I call a race to the bottom.

Benjamin Franklin once said:

“The bitter taste of poor quality remains long after the sweetness of low price is forgotten”

I think for a very long time this was the case. It was accepted that there was a trade-off between quality and price. However it seems that times have changed. What was once true in a handmade, almost artisanal world does not seem to apply quite so steadfastly in the modern, mass production, readily interchangeable, short life span high technology world of today.

It used to be that you could get things cheaper but they invariably didn’t last as long as the more expensive better made items. This was a period when it took a while to make just about anything, and it was a requirement that it last based on what it cost to acquire. Back then when you bought something you expected to have it for a while. You expected quality almost directly in proportion to the price that was paid. You paid less, you expected less. If it wasn’t high quality you were going to have to live with that mistake for a while. As a manufacturer your reputation rested on every product you made.

I think the new approach today is to ask what is the best “relative” quality available at the absolute lowest price. Now it seems that the search is for as much quality as is obtainable at the lowest price. It is a somewhat subtle change in the relationship between price and quality, but I think it is an important one. I think in today’s world Ben Franklin would be asking what the minimum quality level is that can be endured at the target price point.

We are no longer buying quality. We are buying price and hoping for quality.

I guess that there still is a relationship of sorts between quality and price, it’s just that now it seems almost impossible to up-sell a customer (raise the price) based on quality. If you are not the cheapest, your chances of gaining the sale are probably going to be severely hindered by the other product that is the lowest price. Customers for the most part seem to view products as readily substitutable with each being able to perform essentially the same functions as the next, hence the “why pay more” approach.

I think it can also be traced somewhat to the public perception in the change of relative life expectancy the products. The shorter the life expectancy of a product, the quicker the next generation or replacement product hits the market, the more it seems that there is a tolerance for lower quality. It came out quick so a few bugs are always expected initially. As we have moved into the disposable high technology world, it seems the more tolerant the market is of lower quality, as long as the product is available for cheap.

Just over fifty years ago Gordon Moore noticed that technological capabilities doubled roughly every eighteen months. It seemed everything got either twice as fast or half as small on a very regular basis. This observation strangely enough became known as Moore’s Law. It basically ushered in the era of short product life cycles and rapid product replacement.

I have mentioned several times that I am probably a dinosaur. I remember (vaguely) my parents color television. All twenty three inches of that then massive cathode rate tube screen. Wow, what a monster. I also remember the repairman actually coming out to the house once or twice to repair it. Of course this was across the approximately fourteen years of its operational life in their living room.

Now televisions are huge with many larger than sixty or seventy inches. Unfortunately they are only expected to last a few years. Then they either break and must be replaced since the cost of repair is now so prohibitively high as compared to a new one, or are just replaced by the newer level of product technological advancement.

My point here is that while the absolute cost of the product may have come down in both real and time adjusted costs, I don’t think the total costs across the sample period have actually been reduced. In other words, the total cost of ownership across fourteen years and two repair visits is probably far less than the three to four televisions that might be expected to be purchased across the same time period today. However, it is only fair to note that who can say what the capabilities of a television will be in fourteen years at its current rate of evolution.

It seems again if you have a short technology cycle, short life expectancy, readily substitutable, mass production product, such as televisions, or smart phones, or personal computers, or just about every other electronic platform in the market today, quality is not the concern. Price is. And when that happens it looks like the race to the bottom is on.

The reason that I have gone into such belabored detail on what is obviously a consumer goods example is that it has been the bellwether for the business world as well. Let’s get back to my dropped call scenario.

For the longest time the communications infrastructure was a source of pride. I seem to recall when “five nines” of reliability, no down time, and always being able to place a call were proudly pointed to aspects of both the public and private communications systems. You could not get a higher quality infrastructure.

So you didn’t. You got a cheaper infrastructure. It now experiences issues and outages that in the past were unthinkable. And over time people have accepted it. Quality was sacrificed for price. You don’t hear anybody asking “Can you hear me now?” We all seem to be okay with it. We seem to have lost the drive and desire for “better” and have just settled for “cheaper”.

I don’t know if it is the consumerist behavior driving the business world in this direction or the business world drive for newer and cheaper technology that is stoking the consumerist behavior. As the apparent acceptance by customers for low quality continues, even though there seems to be an inordinate amount of business focus on creating the “relative” quality levels in technology products, price becomes an ever greater decision criterion. This trend can only benefit the low cost producers and providers in the market.

When quality is addressed as a cost as in the “cost of low quality” as it is measured today in business, instead of a generated value to the customer, then I think the bottom may be in sight. Feature, form, fit, function and quality no longer seem to be viable differentiators in the eyes of customers. Price and its financial partner, cost, now seem to be all that matters.

Maybe Ben Franklin was right in his time. I think Kurt Vonnegut may be right in this time. He was the one that said:

“In this world, you get what you pay for.”

The only issue now, is that we don’t seem to be willing to pay for it.

Growth Industry

I think it is safe to say that most everyone is looking for their next career opportunity. What do they do next? Where do they go next? What is the next step in their career progression? When I have been asked in the past what someone’s next career step might ought to be I have invariably said that everyone should spend some time in sales, and that everyone should do whatever they can to be able to understand the business numbers.

I am not going to back away from that comment. Good leadership needs to understand what it takes (and just how difficult it is) to generate a top line. No matter what everyone who has not been in sales may think, I have found that it is just not that easy to get someone to give you their money, regardless of how good the product or service is that you are selling. (Apple products don’t count here. I truly believe that customer set has been brain washed.) Even so, I think we have all been in situations where management has predicated all of their well scripted strategies for sales growth, regardless of product, business or market conditions, only to miss those growth targets and then try to deal with the business consequences.

I also stand by the assertion that numbers, and derivation of such numbers (or in some cases the divination of said numbers) is required for business and organizational operation. I have cited several quotes on numbers in the past. Robert Heinlein said “If it can’t be expressed in numbers it is opinion not science.” Mark Twain said “There are lies, damn lies, and then there are statistics.” A leader’s long term (and short term) success will be based on their ability to understand and communicate what the business’ numbers are, and why they are what they are.

What I think I am now going to add to these two suggested experiential requirement sets is that leadership needs to spend some time in what my experience has proven to be the only consistent growth industry that I have seen across all industries, markets and businesses: Cost Reduction.

In business there are many things that can (hopefully) be influenced in business performance, but very few things that can truly be controlled. Businesses can try and influence the market to perceive them differently. They can employ various media and advertizing to try and create a progressive image in the market for their goods and services. They are in essence trying to convince the market of their particular product or service advantages and benefits.

Whether or not the market accepts, agrees or is influenced by this positioning is outside the direct control of the business. The business will always try and craft its market message in the most beneficial light possible, but it is the market which gets to decide which parts if any in the message and value proposition are accepted. Entire industries of analysts and consultants have grown up around this market value proposition analysis in efforts to try and actually decipher the facts associated with these messages.

Whether individual customers accept or agree with the proposed business value proposition is also somewhat outside the control of the business. The business can employ dedicated sales staffs and teams to tailor the message specifically to each customer as well as work to identify the value of the solution to that customer. This provides greater input and positioning for the business, but yet again it is the customer that ultimately controls the relative success of the business proposition. They get to say “yes” or “no” to the proposition.

The point here is that a business can do absolutely everything right in the dissemination of its message to the market and its pursuit of the ever elusive customer order, and still fail, sometimes for reasons that are entirely outside the control of the business. They can work and influence and sell in every way imaginable and still not get the order, or enjoy the top line growth they have planned for and need.

Herein lays the rub.

Senior management doesn’t really care about that. A plan has been made and the numbers have been committed. Those numbers have been combined with the overall organization’s other business’s numbers and an total organizational plan has been committed to the corporate leadership. You don’t get to easily miss your financial commitments to the organization.

Where do you think all those ideas for those colorful punishments on your favorite Game of Thrones or Walking Dead television shows came from? Exactly, people who missed their planned or forecasted targets.

While it may be generally frowned upon by senior management to miss the top line plans and forecasts for growth, it is wholly unacceptable and more than likely to be a punishable offense to miss the business profitability and earnings commitments. Herein lies the squeeze: While the top line may not be achieving the required heights, the profitability and earnings commitments to the organization cannot be reduced proportionately, if at all.

The only solution is to cost reduce.

I don’t want to make it sound as if cost reduction is only something to be taken on in times of business stress or top line under performance. It may have once been that way, although I cannot remember it. Suffice it to say in today’s day and age that for a healthy business cost reduction is both a growth business and a never ending process. If you are not doing it now, you had better get started because it will probably be necessary sooner rather than later.

It is well known that the sooner you can make adjustments of any kind in a business year, the less drastic the adjustments need to be. If you can recognize in month two that there is an issue, you have ten months to correct. If the issue is not recognized until month seven, you only have five months to correct, and now the correction must be twice as large.

What I mean here is that if there is a one million dollar short fall in the earnings commitment / forecast and it is recognized in February, you can correct spending (costs) to the tune of one hundred thousand dollars a month. If the same one million dollar issue is recognized in July, you will need to reduce costs by two hundred thousand dollars a month to recoup the same million dollar correction.

Remember that. The later you wait, the more drastic the cost reduction action will have to be. Plan early, act early. Hoping things that are not fully within your control (sales) will improve usually results in much more painful activities associated with those things that you can in fact control – costs.

There are all kinds of costs associated with a business, not just people costs. Here is where knowing the numbers thing comes into play. What are these costs? How do you control or reduce them? And, almost more importantly, how long will it take to implement the changes associated with reducing them?

We have probably all seen these knee-jerk cost reduction actions:

Travel bans – which basically just limited the people who should be traveling and not so much reducing the number of people who shouldn’t have been traveling in the first place. Travel is not a light switch with only the “On” and “Off” positions.

Hiring Freezes – that really aren’t freezes because there will always be the need for the flow of the life blood of new talent that every organization requires.

I have even seen the removal of coffee and other amenities from the corporate break rooms. I don’t know how much was saved, but it did succeed in generating a significant number of grumpy people.

There are any number of other “cost reductions” of these types, but they are for the most part superficial. They do not address the specific issue that the business’s basic cost structure does not match its revenue and hence earnings positions. True cost reduction comes from addressing the long term and fixed costs associated with a business. Can fixed assets be reduced? If so, how and how long till they are affected? Is there outsourcing or off shoring that may be needed? Not everyone can be the best at everything, so looking for external help may be a potential solution. Are there allocations or other programs that need to be reviewed? The list goes on, but the costs must be dug out, isolated and analyzed before action can or should be taken.

This activity will serve to teach the leader, or would be leader what the costs are, in human terms or otherwise, associated with cost reduction. Changing the course or the costs associated with a business is much more fundamental than just freezing travel or hiring. It is also much more invasive. It’s not easy. You have to challenge yourself, your team and your business to change, and that is never easy. No preconceptions regarding business costs should be exempt. All costs should be questioned. When addressing cost reduction, remember what Sun Tzu said about war (as in this case they will be somewhat similar):

“The art of war is of vital importance to the State. It is a matter of life and death, a road either to safety or to ruin. Hence it is a subject of inquiry which can on no account be neglected.”

So is the art of cost reduction.

Darwin and China

I think it is safe to say that we are all experiencing some sort climate change. I am not just saying that because it is one hundred and four degrees here in Texas. It is mid-August in Texas. It is always one hundred and four degrees in Texas in mid-August. Remember Climate is what you expect. Weather is what you get.

What is interesting about this year in Texas is that we had almost four feet of rain in the first five months of the year, and now it hasn’t rained since then. That is a little odd. We have had something of a drought for the last few years where all of the water resources were way below normal. Most municipalities had instituted water conservation rules because of it. Needless to say, there were a lot of dirty cars because we could not wash them and a lot of brown lawns because we could not water them.

We then had a short period of a few months where it rained a lot and filled all the reservoirs to literally over flowing. Everything got green and lush. Most importantly, the golf course fairways were lush and the greens were soft. Life was good. And now we are back to no rain, a drought, but with full lakes. And on top of that it’s August and really hot, again. Go figure.

There are many that would like to point to man as the cause of this perceived global climate change (global warming). I am not entirely convinced of this causality since the geologic record across hundreds of thousands and millions of years indicates that we have had multiple periods of global glaciations (ice ages) followed by significant periods global warming in the past. I’m pretty sure that man didn’t cause these as he (we) weren’t around for most of them. It is possible that man is potentially affecting or exacerbating this cycle with carbon emissions and the like but with a data sample of only a few hundred years (against a historical record of millions of years), as I have said, I am not sure I am entirely convinced.

Be that as it may, this entire introduction regarding environmental change brings up the topics of how do you recognize environmental change, and how do you cope with that type of change. As always there seems to be some significant parallels between what is going on (and has gone on) in the environment and what businesses are facing on almost a daily basis.

Darwin in his “Origin of Species” postulated that organisms either adapt to their environments, or they go extinct. This is pretty interesting stuff when you remember that he figured this out by looking at some little birds in what are now Galapagos Islands. This is now a basic tenet that we all seem to agree on.

It is those that adapt to their changing surroundings that survive.

About ten to eleven thousand years ago North America experienced a period of rapid warming associated with the end of the last glacial period. During this time lions, cheetahs, mastodons, and various types of bears that were present in North America went extinct. It is interesting to think that there were lions, cheetahs and mastodons as little as a few thousand years ago in North America, and that they are now extinct. That is a veritable “blink” of an eye in climate or geologic time.

It is believed that several of these species were unable to adapt quickly enough to the changing environment associated with the post glacial period warming and began to die off. It is then thought that other species in that particular food chain (predators and such) also began do die off as they could not quickly enough adapt to utilizing other prey. The net result is that they are gone, and we only know about them here because of the bone and fossil record.

When we look at what is going on in the various markets, not only in the Americas, but globally, we see similar adaptation and extinction events occurring. Businesses and organizations must be quick to recognize shifts and changes in their environments and be agile and flexible enough to be able to adapt to them.

This adaption – extinction pressure requires businesses and organizations to continually perform a balancing act between their desire to codify and stabilize the activities and functions that allowed them to succeed yesterday into a repeatable format, and the ability to be flexible and change these activities and functions in order to meet the new demands of the environment (and the competition) of tomorrow.

There is an old joke that if you are a member of the group that is being chased by a bear, that you don’t have to be faster than the bear. You just have to be faster than the slowest member of the group.

This idea works for a while, until the bear has caught all the other members of the group that are slower than you. Now you had better be faster than the bear, or able to figure something else out. Just running, like you always do is no longer good enough. If you don’t change, you are probably in line for the next personal extinction event.

All this leads to the rather simple position: Changing environments require businesses and organizations to change.

We have all heard the platitudes that organizations have with respect to change and their ability to change. They have to plan on change. They have to react to change. The only constant is change (a particular favorite of mine). This is all well and good. They may or may not do these things. It appears certain that if businesses cannot accept and come to grips with the idea that the way they are doing things today will not be good enough “to outrun the bear” tomorrow they may not get to see the next “tomorrow”.

Climate change may involve the possible change of tenths of a degree across tens or hundreds of years. It is not constant or consistent, as demonstrated by the fact that average temperatures have actually declined slightly in the last few years. It seems the past changes were small and slow, but it was enough to send multiple species into extinction, rather rapidly when looking at things from a climate and evolution time frame point of view.

Such is not the case in business.

Over the last few days the Chinese government has “officially” devalued its currency, twice. In global warming terms this is the equivalent of announcing tomorrow the world will officially be five degrees warmer and good luck to all you seals, walruses and polar bears. This move in China fundamentally alters a business’s ability to move products from other countries into the world’s second largest market by making them significantly more expensive, and at the same time makes products manufactured in China far more competitive in other global markets by making them significantly less expensive.

A business that finds itself on the wrong side of this type of import-export governmental cost equation manipulation has a very short time to change its model for doing business. Maintaining that a company is flexible and that it prides itself on its ability to change isn’t any good here. When there is a recognition that the environment has changed, there needs to be the accompanying recognition that in reality the bear is now running faster.

The only thing that counts in a situation like this, or just about any other situation where a business is confronted by a reality that is in conflict with its current operating model is, does the leadership recognize the new environmental reality, and do they have what it takes to get to the new required business reality? Discussions, meetings and attention to process improvement do not “change” the need for a new approach to doing business when you find yourself in a change or extinction situation.

Sometimes the changes in the business environment occur like they just did in China. They are blatant, easily recognized and either drives a business response, or extinction. However sometimes they are more similar to the changes associated with global warming in that they have occurred slowly, and somewhat erratically and inconsistently over time. There will be those (like me for instance) that recognize and agree that an environmental change is occurring but differ on the attribution of its cause, and there will be those who deny that any change has actually occurred.

It is very clear though that in either case there comes a business morning where you wake up to an unseasonably hot day, and smell bear breath over your shoulder. What you change and how you change will then decide which side of the adaptation – extinction equation you are on.

I think Darwin would be agree.

Cartoons and Strategy

My son was being abnormally quiet the other day. Actually he was being quiet with periodic outbursts of laughter. This is not the normal state of affairs. For those of you with teenage boys you also probably know this to be the case. There is normally an ongoing chatter followed by screams of either anguish or happiness depending on who was most recently vanquished in the current on-line military game being played. I won’t mention which one. They all seem the same to me. We have all seen the commercials on television.

It was so odd to hear him in this mode that I did the unthinkable. I went upstairs to the game room to check on him. He wasn’t wearing his gaming headset. He wasn’t even on the internet. He was watching the Roadrunner and Coyote (more specifically Wile E. Coyote for those fellow purists like me) cartoons. I remembered watching these cartoons when I was young. It was amazing to me that they were still on. He had stumbled across them on a network that only played old cartoons; surprisingly enough called the “Classic Cartoon Network”.

Being of sound mind and body, a guy, and having cartoons on the television, I did the only logical thing. I went in, sat down and watched old cartoons with my son. Some of them I remembered and some I didn’t. It was fun to hang out with my son, but as usual, it got me to thinking. The humorous aspect of the Roadrunner and Coyote cartoons was based on the simplicity of the task at hand; catching the Roadrunner, and the ever more complex slate of strategies employed by the Coyote in his attempts to complete the task.

Leave it to me to compare perfectly good classic cartoons to business. It’s an insult to the cartoons.

Sometimes his failures came from obvious, predictable and expected issues. Sometimes they came from unexpected directions. They were all entertaining. The Coyote’s single mindedness regarding catching the Roadrunner always made me smile.

I always wondered, if he could actually buy, build and fly his own ACME rocket, why didn’t he just use that same intelligence to order take-out from his favorite restaurant, or switch to chicken, which might have been an admirable substitute for Roadrunner and bought some at the grocery store? It probably would have saved him a great deal of wear and tear from all the falling off of cliffs and having large rocks fall on him.

Undaunted by each successive failure, the Coyote would generate a new strategy to capture the Roadrunner. Each new strategy would invariably contain maps and charts and plans on what to do and where to do it. Each new strategy was usually also more complex and more intricate than the last, but was guaranteed to work this time. They never did.

What Wile E. Coyote Inc. teaches us about strategy is something we all probably recognize but occasionally need to be reminded of: Simpler is better. This obviously applies to other business strategy as well.

A good strategy has only a few major attributes. I’ll try and go through at least my opinion of them, just as a refresher course.

First: The goal must be achievable.

On the surface one would think that catching a Roadrunner should be an attainable goal. It probably was, but it was how the Coyote went about it that was entertaining.

As a corollary it’s also okay to want to double or triple in size as a business. It may also on the surface appear to be an attainable goal but the question that should always be asked is: What is going to fundamentally change in the business that is going to enable, or even drive this kind of growth? Everybody else in the market wants to grow too, and they also have strategies. You need to have a very solid and strong precept that makes you different.

Second: The strategy must be simple.

Rube Goldberg is a name that is synonymous with creating very complex machines to achieve very simple goals. He also appears to have been the chief strategist for Coyote Inc. in its desire to overtake Roadrunner Inc. There is even an annual competition in his name where a simple task must be accomplished in no less than twenty different steps. The 2015 objective was to “shine a shoe”, and due to the complexity of some of the past entries (with over two hundred steps) the contest has been limited to a maximum of seventy five steps.

In business the goal should be to shine the shoe. Find the shoe, apply the polish and buff till the desired luster is achieved. That’s it. As the Coyote taught us, the more complex the strategy, the greater the chance there was for something to go wrong.

Third: No strategy survives contact with the real world intact.

This is a paraphrasing of the original quote:
“…no plan of operations extends with any certainty beyond the first contact with the main hostile force.”
Field Marshall Helmuth Karl Bernhard Graf von Moltke (The Elder)

Now for those of you who are not up on your nineteenth century Prussian military history, Moltke was the Prussian military commander during the middle part of the century, and he wrote this in his book “On Strategy” in 1871.

Again we look to Coyote Inc. for examples of what not to do here. He would usually achieve one of the attributes he was striving for in his quest to get the Roadrunner. With the help of his trusty ACME rocket he could achieve the speed of the Roadrunner. He would close in only to see the Roadrunner demonstrate his ability to stop before running off a cliff, or turn sharply before running into a cliff. The Coyote with his ACME rocket usually would not be able to match this agility and maneuverability, with the (now) expected results.

The very act of implementing his strategy caused a change in the behavior of his target. Coyote Inc. was able to go as fast as Roadrunner Inc., so Roadrunner Inc. learned to stop or turn quickly in order to elude its pursuer. The same goes in business. Things change. The competition will react to competitive behavioral changes. Customers will do the same. You had better be able to learn how to change direction quickly.

The idea is to be ready for it. The simpler the strategy means there are fewer moving parts in it. The fewer the moving parts means the fewer number of things that can go wrong, which in turn means the fewer the number of things that will need to be modified as conditions in the market change. This is especially useful when it comes time to change direction because a cliff suddenly appears in front of you.

Keeping goals attainable, strategies and the number of contributing components simple, and preparing change direction as the conditions warrant seems to be enough for any business. It is the complexity that is introduced into the plan that is usually the cause of issues. When it comes to strategy and its components, I am a firm believer in the adage that “Less is more”.

It was an enjoyable time with my son watching old cartoons. It didn’t last nearly long enough. It seemed in no time he had his headset back on and was busy wiping out whichever opponent was on line at the time. I on the other hand was ready to impart all of these strategy and strategic insights that I had drawn from the Coyote’s obviously poor performance to him. He didn’t seem very interested.

I really didn’t expect him too, but still it was mildly disappointing after sharing a solid thirty minutes of quality time as we did. Still the cartoons stuck in my mind and the basic tenets about strategy were there. I suppose if Wile E. Coyote Inc. had actually employed the simple and straightforward strategies it should have in its quest to overtake Roadrunner Inc. the cartoons would have been much shorter, and probably not nearly as funny.

And I probably wouldn’t have gotten to spend some extra time with my son.

The Perfect Metrics

I think we as a species inherently love to measure things. I take that back. We love to measure everything. I am not a baseball fan, but I find it humorously entertaining the number of statistics that are available for seemingly any situation in baseball. I think it is possible to find the batting average for any player in late innings, with runners in scoring position, for away games with left hander pitchers on the mound. Really? I guess there must be someone interested in all that, but I can’t think of who it might be.

I am a hockey fan and there are a whole new generation of metrics created which I am not sure I entirely understand yet, but are supposed to give a much better measurement of the quality of the hockey players on the ice today. It seems that you can now get statistics for third line shots generated or allowed, for defensive players on offensive zone draws in the third period. Okay. I understand what all that means, but I am not sure if I care. Just drop the puck and skate.

I am not quite sure but it seems that some people are trying to make hockey appear to be more like baseball through the use of more and more arcane and detailed metrics. Unless they allow baseball players to carry their bats with them out into the field when they play, (stealing bases would get a whole lot more interesting) instead of just when that are at bat, or figure out a way to make hockey a whole lot slower and more boring, this would not seem to be a plausible goal.

The roundabout introduction here is that to generate all of these baseball statistics, someone had to measure and record all of these actions and variables. They had to create the metrics. And once they created these metrics it became a challenge to create the perfect metrics to more perfectly measure and reflect the game. After over one hundred years they are still trying. This should convince everyone from the onset that there are no perfect metrics. There are only good metrics, and other measurements.

I have had the opportunity in the past to be involved with many metrics projects, programs and functions during my time in business. It has been both an enlightening and useful process to me. It has helped me on several levels when it comes to the successful leadership of a business. In business as in sports, metrics are in part how we keep score.

Metrics are interesting in that they are indicators of performance. Hockey players with good performance metrics tend to be on good teams. Good teams tend to win more games. Winning is usually thought of as being a good thing. The new, complex metrics associated with Hockey seem to go a long way toward providing supporting evidence for how good and accurate the older simpler metrics associated with Hockey actually are. Interesting how that works.

It also seems to go that if a few metrics provide a reasonable indication of individual or business performance, then as we have noted in baseball, a very large number of metrics should provide a significantly more specific and detailed indication of individual or business performance. This thought process is along the lines of the old adage “If a little is good, a lot must be better.”

To extend the baseball analogy that is like saying if a beer or two is good while watching a game then two cases of beer should be excellent. You can find yourself at the game in a state of unconsciousness, immobility or alcoholism.

Similarly you can find yourself in business with so many metrics and indicators that they will begin to provide too much, or even conflicting indicators to the point that you end up in an immobile situation. Hence the phrase “Paralysis by Analysis”. I think I may prefer to refer to this situation as “metricoholism”, or the over dependence on and addiction to metrics to the point of being dysfunctional.

Metricoholism is the inability to have just one, or even a few meaningful metrics. It’s more along the lines of once you get started measuring things, you can’t stop. Eventually you will have measured everything, but will then have no idea what to do about all that you have measured.

I have found that the value of metrics lies in the talent of the people that are interpreting them. Metrics in and of themselves need to be the indicators of where additional human interaction with the business processes may be required in order to understand the possible underlying issues associated with the numeric measurement anomaly (metric). Good metrics identify the leverage points where analysis and performance modification can have the greatest effect on the business. Good metrics simply point to where the leader must look to understand what is affecting their business’ performance indicator.

There was a recent movie about the use of metrics in sports. It was called “Moneyball”. It was nominally a baseball movie, which meant for me that I would wait for it to be on television before I would watch it. I usually don’t pay money to watch a live baseball game because it is as I said a rather boring game to me. Why would I pay money to watch a movie about a rather boring game?

Just as an aside not all baseball based movies fall into this category. I thought “Field of Dreams” and “Bull Durham” were very entertaining movies, in spite of their baseball based premises. However “The Natural”, not so much.

In any event, Moneyball was the story of how a specific baseball team changed the way the business of the sport was conducted. By changing the way that the humongous amount of data associated with baseball and the baseball players was interpreted, they changed the way players and teams were viewed, built and paid for.

That bears repeating. By changing the way that the standard data (that was available to everyone) about the game and each of players was interpreted, one team changed the way an entire century old sports institution looked at how teams were built and how they should best perform.

The value was not in the data. Everyone had the same data. The value was in how the data was interpreted.

While interpretation of the data is going to be the key to success when it comes to metrics, it is also best to remember what Robert McNamara (one of the original automotive industry “whiz kids” of the 1960’s) said. He said:

“First thing: Get the data.”

The point is that there is a lot of data available. Which data do you go get. If you were a Metricoholic you would end up trying to get all of the data, since partial data would not be satisfactory. Also as previously noted, this would be a mistake. It takes far too much time, money and effort to do this and what are you going to do different with one hundred percent of the data that you wouldn’t do with eighty percent of the data.

That was an oblique reference to the old eighty – twenty rule where you can get eighty percent of the data in twenty percent of the time. If you can get eighty percent of the data reasonably quickly, you can make excellent business decisions from that data, and move on.

Good metrics for a business need to be relatively simple and straight forward. They need to deal with the basic functions and core values of the business, not the ancillary capabilities. Revenue, costs and profitability are good examples of simple metrics that all businesses use. I think there is probably a good reason for that. Performance levels and adherence to service levels are good metrics for service related industries. There are certainly others and they can be customized by business type and industry.

The key and the value to good metrics lie in their simplicity and their interpretation. Complex metrics just provide you complex data that is difficult to interpret. Exhaustive numbers of metrics generate exhaustive amounts of data that requires exhaustive interpretation. No amount of metrics, or process for that matter, can replace the need for talented people who can interpret the data, then decide where and what to act on.

The idea of good metrics should be to create a few indicators that measure the specific core leverage points of a business or organization. They should provide both a historical trend (are they getting better or worse) and a specific snap shot of performance. They should indicate where the interpreter of the information should go look for issues, if they are indicating issues. They should not be expected to indicate what the cause of the problem is, and certainly not what the solution to any particular issue will be.

Almost every business in existence already has some sort of metrics. Some are probably good metrics and some are probably just measuring something. There will also probably be those in the organization that are clamoring for more metrics as a way to improve performance.

However, I have found that good metrics are usually like bitter medicine. They are best and most effective when delivered in small doses, and usually best prescribed by someone outside the organization that does not have a stake hold to protect.

Just like healing oneself, measuring oneself is sometimes a difficult thing to accurately and honestly do as well.

When Friends Resign

A friend of mine resigned a while ago, and I don’t know if I have consciously or unconsciously avoided thinking about it as a topic. Enough time has passed where I think I can look at it at least reasonably objectively.

I have often talked about the conflicted feelings that occur as a result of corporate layoffs. On the one hand there is compassion for those that seemingly through no fault of their own are tapped on the shoulder and told that they don’t have a job anymore. On the other hand there is the necessity for the company to adapt, resize and redefine itself for the new market and financial realities that it is facing. The resulting guilt, fear and uncertainty of the accompanying survivor’s syndrome for the employee’s that remain after watching their friends leave, are detrimental to both the employees and the company. Hence the evolution of the preferred corporate approach of making and implementing the changes quickly so that the focus can return to the business at hand also as quickly as possible.

But what happens when your friends leave of their own accord?

There are also many conflicted feelings that occur when a friend leaves, but I think they are slightly different. In a layoff, there was no choice. Friends are told they no longer have a job. When friends resign we all know that they made a cognitive decision. It was their choice. In the former situation there is a little “there but for the grace go I…” and a little of the afore mentioned survivors guilt. In the latter we all ask: What do they know that I don’t?

Successful business has a lot to do with good leadership and the accepted team approach to achieving the goals. Not everybody can be the leader, but everybody needs to demonstrate leadership. Not everybody will be in full agreement with the leaders, but everybody needs to align with the designated objectives. There is always a mixture of satisfaction and gratification along with frustration and dissatisfaction in all that we do in business. It is how well we are able to balance these conflicting feelings and emotions that will usually have a lot to do with our individual and team success.

The usual process is to create the team, assign the roles, define the objectives and begin their pursuit. The team members begin to mesh and friendships inevitably arise. New teams, roles and objectives will come, but the friendships that are established usually remain. These relationships evolve into our “networks” and support systems.

These are the people that we go to lunch with and who will listen to us when we have not yet fully internalized the directions and objectives that we now have.

When they decide to leave it makes us all take a moment to pause and reflect. The inevitable question that comes to mind is: Why did they decide to go when I have not? Have I missed something?

It has been my experience that career change decisions are invariably made in isolation of any friendships. Most of my friends who have made these types of changes did not tell me or consult with me before they made them. The contemplation of any career change is a personal thing and not to be taken lightly. The support or opposition of a friend to a possible change can modify both individual’s behaviors today and in the future.

Plus, once it is spoken of, even as a remote possibility, the potential career change secret is out. The sharing of a potential career change opportunity or decision could also cause issues with peers and management in any current assignment. If the potential change is not realized, the issues caused by the consideration of it would continue to remain.

In speaking after the fact to friends who have left in the past, I have found that they normally leave for basically one of two general reasons: to increase their satisfaction and gratification related to what they do, or to decrease their level of frustration or dissatisfaction related to their current roles and situations. The first reason is looking forward to something better. The second is looking back at something worse.

The increase in satisfaction can come in the form of more money, promotions, more responsibility, titles, etc. This can be seen as part of the normal progress in a career. As one matriculates up the management line, the number of available “next step” positions becomes increasingly small. Sometimes it may be viewed as necessary to step outside of the current structure to keep a career moving.

The decrease in dissatisfaction can come in the form of the desire for a more stable work environment (no prospect of layoffs) better alignment and utilization of individual talents or better alignment between work and management styles. Misalignments in strategies, cultures and management styles can contribute to and accumulate dissatisfaction to the point where an exit may be required just maintain some semblance of sanity.

In many instances it seems to have ended up being a combination of all of the above.

There is normally also some sort of minimum differential barrier that must be overcome in order to get someone to decide to leave their current role. This could be considered the “barrier to exit” (as opposed to an economist’s barrier to entry). Most everyone will put up with some amount dissatisfaction in their current role. Most everyone will also put up with some lack of satisfaction in their current role. This can be due to the time, effort, pay level, etc. that has them vested to one level or another in their current role. Please notice that lack of satisfaction and dissatisfaction are in fact different. The lack of happiness doesn’t mean that you are unhappy. It just means that you are not happy. I think you can go a lot longer not being happy than you can go being unhappy.

But how much does it take to cause someone to go past the barrier to exit tipping point? Again it seems that there are many factors. Careers and career trajectories, corporate positions, directions and performance, and time, as well as the status of the greater employment and opportunity markets will all come into play in either lowering or raising the barrier to exit.

I think that this is probably a long winded way of saying that as individuals we will all react differently to the stimuli, both the positive and the negative associated with our positions. We all create our own barriers to exit. Sometimes there is a desire to leave, but no opportunity elsewhere. Sometimes there are opportunities elsewhere but no desire to leave. Either case could be considered a high barrier to exit situation.

I think we all either consciously or unconsciously keep track of our own barriers. It is only when someone we know has consciously overcome their barriers and resigned that causes us to pause and question. We wonder if our barriers are too high and are we missing something. We also wonder if theirs were too low and were they too rash.

I believe the answer is that anyone that makes a career decision either to stay or to go, has probably made the right decision for them. It is not good to judge your own happiness based on the happiness of someone else. It is probably equally inappropriate to judge your satisfaction with your position or career based on the position or career satisfaction of someone else. They have made a choice and are probably happy with it, just as you may or may not have made a different choice and should be happy (or at least not unhappy) with it.

Still, you can’t help but wonder.

I wish you fair winds and following seas, my friend.

Drivers Wanted

An opportunity is recognized in the market place. An issue has occurred in supporting a customer. An idea has generated a new product or solution. What do we do now?

 

It seems more often than not we call a meeting. Then we call another meeting to make sure that we understood what we heard. Then we call a meeting to plan our next steps. Then we start the process of looking for “Buy In” from everyone else. Pretty soon the focus on what could have been a “game changer” has been swallowed up by the safety and security of the process.

 

There is a difference between “Driving” the process and “Working” the process. Driving is when as a leader you have the conviction that what you are doing is right. You have looked at the issue, worked with the team and have made the commitment to move. There is a process in place for situations like this but it generates its own resistance and impedance. When you are driving you will take input but you will not accept delay.

 

Businesses today seem to be more content to work the process. This is a situation where we seem to be more content to accept delay and modification to the decision or solution. While the conviction may still be strong, the risk of being wrong seems to outweigh the benefits of being right. We allow the delays and changes in order to get a “Consensus” as to what should be done. This consensus enables the risk associated with the action to be mitigated across all those that participate. The idea seems to be that if it succeeds everyone can take a bow, but if it does not, no one individual will take a fall.

 

There is value to getting buy-in. It helps the team internalize an external goal. The problems with consensus are that it can take a while to achieve, can water down the solution, and requires everyone to say “yes” and can be stopped when anyone says “no”.

 

Great leaders know how to drive the process, while they work it. They set the goal, provide the resources and do not allow any reasons or excuses. A key here is making sure that the resources are made available. President John F. Kennedy set the goal of sending a man to the moon and back, and drove NASA to do it. He also made sure that NASA had the people and money to accomplish the task.

 

He drove the process (he made sure the goal, objective and measurement were known – get a man to the moon and back before 1970) and he worked the process (he made sure that the funding was provided and the responsibilities were clear), and it worked. If it had failed NASA may have taken some of the blame, but by and large it would have been Kennedy’s failure.

 

I don’t know if it is a reflection of the times, be they economic, political, or other, but we seem to have lost this “Driver” type attitude in doing business. I think we need to get back to it if we want to see the types of growth and performance that are wanted and needed to move forward. Its at times like this that I think of that car commercial – the one with the catch phase “Drivers Wanted”.

Sometimes You Check Your Ego at the Door


Ego is a powerful force in business. It drives us to work harder, to succeed, and to do our best. It is a key element in the makeup of a successful sales and business leader. Without it, losing the sale or missing the numbers would be much more tolerable. Good enough would in fact be good enough.

 

However no one is infallible and no one has the market for good ideas and decisions cornered. It is a good manager that will make a decision and move forward, but it is a good leader that will recognize when a better solution than their own has been provided, and adopt it.

 

Our egos will make it hard for us to accept that we are either wrong, or that someone else may have thought of a better way of doing things. Always be prepared to defend your decisions and directions. However it is equally possible that those that are questioning you are not correct, but do not dismiss them out of hand.

 

A review and discussion of different points of view will serve several functions. People want to feel that their input is valued and heard. Different points of view make the overall business stronger by removing blind spots associated with too many similar points of view. If they are not correct, they have had their say and will be stronger supporters of the current directions.

 

If they are right, you have to check your ego at the door and acknowledge it, and then make the changes that are for the betterment of the business.

Decisions, Decisions, Decisions

One of the key aspects of being a business leader is that it falls to you to make the final decision. It doesn’t matter what the topic is; Sales, Investment, Expenses, etc. It is your call, and you have to make it. Don’t shirk, equivocate or delay. Make the decision.


 


That doesn’t mean that you must shoot from the hip. On the contrary, you need to consult your team, as they are closest to the activity that will be affected and will have some of the best insights and suggestions. You will need to do your research and take into account the objectives that you (and your team) must meet as well. I have found that the 80 / 20 rule can be applied here as well. You will get 80% of the information you need in 20% of the allotted time. Once you have your information you must make your choice and go. Be decisive.


 


Not everyone is right all the time. However, a wrong decision can be corrected. A team that is active and performing can change its direction and continue performing. A team that is waiting on a decision is not active and performing. It will always take more time to get a stationary team moving that it will to get a moving team headed in a new direction.


 

We have all heard the phrase “paralysis by analysis”. This is the case where in the drive to make no wrong decisions, you end up making no decisions at all. You achieve your personal objective of making no wrong decisions by making no decisions. You also miss the opportunity and business need for making as many right decisions as possible.