Category Archives: Strategy

Esoteric Value

“Don’t sell the steak. Sell the sizzle.” is a sales canon that dates back to The New Yorker Magazine in 1938. Elmer Wheeler is the man credited with coining it. It seems Mr. Wheeler was one of the first pioneers in persuasive selling. He was one of the first to recognize the value in presenting a customer the choice in buying one thing or another thing (something and something) instead of the choice of buying or not buying (something and nothing). He was successful. Sales teams have been trying to emulate him, and his success since.

His approach works well when dealing with an end-user customer. The person buying the steak, or getting their oil checked, or buying a malted milk (these were actual examples in the 1938 article) can readily be replaced by those purchasing Mobile Phone packages, automobiles or Television / Internet packages for their homes. It is still about buying one thing or another, not about buying or not buying. These are consumers making discretionary purchase decisions.

For the most part these are all examples of Business-to-Consumer selling opportunities. The person buying is the person using the capability being sold. It is when you start looking at the idea of Business-to-Business selling that the concept of “sizzle” can become a little more esoteric. In business, there are very few discretionary purchase decisions that get made. It is usually decided that you can use it to make money or save money, or you don’t buy it.

Businesses for the most part are financially or profit driven. I say for the most part as there are several that purport to serve the greater good, and by their designation as a “Non-Profit” organization enjoy a different tax treatment. There are also those that are regulated as to how much they are actually allowed to charge and or make as a profit. Even so, these regulated firms are also somewhat profit driven.

What they are not is “sizzle” driven.

Yes, it is true that organizations are made up of people that can be influenced by something other than profitability, but the organization as a whole, through is management structure, its purchasing process and more importantly in many instances, its stock price will not be “sizzle” driven. Being fashionable or exciting or being a market or technology leader is interesting. It may have some ephemeral effect on the organization, or how the market perceives it, but in the end, it will be the financial performance of the company that dictates how it ultimately is perceived.

If you want to stay in business, profitability will be key. It is about making money, and about how those things that the organization purchases can be used to make more of it, this quarter, this month, today.

Steve Jobs is famous for many quotes. Part of one of his more famous quotes contains the following line:

“Our job is to figure out what they’re going to want before they do”

This is spoken like a true technology genius, especially when he is referring to a set of consumers and end-user customers that are not technology geniuses. Jobs was brilliant at anticipating consumer “wants” (as opposed to needs – no one “needs” an iPhone, or an iPod, etc.) and then putting together a product package that would then create a new market.

He identified what you would want and then created the package that you wanted it in. Like I said, he was a genius.

However, when you are working with businesses, it is somewhat different. The businesses normally require something called a “business case” (see what I did there? Business – business case? It’s important.) before they are going to spend money on anything, whether it is a new hire, an internal development, or an externally supplied product or service. It has to make business sense, or more simply put, it needs to generate more value for the business than it costs the business to do.

There is a myriad of ways to describe the generation value for a business, but I have found that they can usually be simplified down into one of two categories: Value can be created by enabling the customer to generate more revenue, or value can be generated by enabling the customer to reduce their costs. Both of which usually result in greater earnings and profits, which ultimately increases the value of the company (usually in the eyes of the shareholders or owners).

Many times, companies like to tout their future capabilities when selling to other companies. It is important to have a direction and strategy for the future when talking to customers. They too want to know where their suppliers are going and what they expect the market to need or want in the future. But there is a significant gap between the value of a business case for today, and the value of a business case for the future.

The business case of today involves products and services designed to meet defined requirements, solve existing issues and deliver present value in the form of increased sales or reduced costs. The needs exist. The products exist. And the relationship between them can be well defined. The amount spent, and the value received, either immediately or over the defined period of the business case can be calculated. It is truly the decision between buying one vendor’s solution and buying another vendor’s solution (again, the decision between buying something and buying something else).

It is when new products or capabilities are introduced ahead of or in anticipation of the business customer’s need, that the business case relationship can become somewhat esoteric.

When trying to anticipate the business customer’s future needs, the impetus is on convincing them that your specific view of the future is to correct one. They must then balance that out against their customers needs, wants and desires to see if that anticipation makes sense in the form of a business case.

Many times, there can be a general consensus among the supplier organizations about what the future state of an industry may look like, but unless that vision can be quickly converted into increased customer revenues, or reduced operating expenses, the future solution will have to wait. Most organizations can no longer afford to spend money in anticipation of what they think their customers will need or want. They would rather wait and make sure it is what they need or want.

Remember present value is always better than future value.

Part of the issue with “future” products is that they don’t necessarily translate to definable value. They are usually described as “platforms” for the future, or that they will enable “future applications”. In short, they don’t clearly define and quantify how the business customer is going to generate new revenues and how much those revenues might be, or how they are going to reduce their costs and how much those cost reductions might be. They have only half of a defined business case. The purchase or the cost half.

They do not have the benefit half of the business case defined.

Without the definition of those future applications or services or values or cost reductions it is difficult to make a case where an organization will feel comfortable spending today’s money on an undefined future value. In short, very few businesses will gamble today’s money on an undefined future value. It makes much more sense for them to actually wait on the future than to bet on the future.

As I said earlier, companies are in business primarily to bring value to their shareholders and their owners. The do this by generating earnings and profits. They do that generating greater value on products and projects that the money they spend executing them. They make more money than they spend on these ventures.

When a business is trying to sell a good or service that cannot clearly define the value that it will generate for the customer, either in the present or the future, it always makes more sense for the customer to wait on that particular buying decisions. This is the definition of deciding between buying something and not buying (buying nothing).

Regardless of the sizzle that a company may claim that accompanies their product or service, in the case of buying today based on predicted future needs and capabilities, the steak, and its relatively definable value will usually be of much more interest to the business customer. Especially when it comes time to review the value generated for the customer. And even more so when that sizzle is still just a future sizzle.

Question Everything

One of my favorite shows just started its eleventh season. It is the X-Files. Watching agents Moulder and Scully deal with various supposed conspiracies, monsters and other abnormal behavior associated with aliens (the science fiction ones, not the terrestrial, international border crossing ones), the various hidden agendas and conspiracy leaders obviously got me to thinking about all the parallels that can be drawn between the television show and what actually goes on in business. In the X-Files it is said that “the truth is out there”. That may not truly be the case in business, although one would hope so. With that being said, when searching for answers out there in business, it may be best to remember this little gem: Question Everything.

Since we are crossing the science fiction with the business schools of management here, we probably ought to start with a quote from one of the greatest science fiction writers of all time, Robert Heinlein. He said:

“If “everybody knows” such-and-such, then it ain’t so, by at least ten thousand to one.”

There have been many instances in my career where I have taken on a new role where the phrase “Challenge and opportunity” was involved. At first, I thought this was a management code phrase for a bad thing because that was what those around told me it was. They all knew that the issues and challenges plaguing the operation were deep rooted, endemic and impossible to fix. Many had gone before me and none had been successful.

What I learned was that these challenges and opportunities really are opportunities. They should be sought out, not avoided. They are not easily solved or corrected, but few issues in business ever are. The truth that was out there, was that the solution was not to be found in fixing the issues that others had supposedly identified and already (unsuccessfully) dealt with. Everybody knew that those were the only real issues, and everybody knew that none of the solutions that had been applied worked.

And as Heinlein noted everybody was usually wrong.

When I first take on a new opportunity and challenge, I probably ask a bunch of dumb questions. There are many who think that is the only type of question I am capable of asking. I could see the exasperation on the faces of those that I asked. I was new to the role. I wasn’t fully experienced in it. My questions were probably dumb. It is not a bad thing to own the truth.

That was okay. As I got smarter about the situation, so did my questions.

Invariably I ended up coming back to the original dumb questions. These were the ones that were usually answered with lines such as “That’s the way we do it” or “That process evolved over time” or “It was the result of an event that occurred several years ago”. These were in effect the “everybody knows” we do it that way response.

The eventual solutions invariably came from questioning these “everybody knows” basic tenets of the unit’s operation. Just because that was the way it has been done, doesn’t mean it is the correct, or proper way to do it.

I found that most issues associated with the “challenge and opportunity” performance of a business stemmed from the basics of how the business was set up to run. Too many times it is the symptoms associated with the improper basic assumptions or alignments of an organization that are focused on. These are the easiest things to see, and hence the most visible to treat.

Notice that I said treat, not cure.

If a business performance issue is large enough to be visible to management to the extent that it is felt that a change is needed, it is usually not a superficial, easily recognizable symptom, that is the cause. It usually relates to a basic way that the business is done. Treating a symptom does not cure the problem.

When it comes to this level of business examination, everybody becomes a stakeholder. Everybody has agreed to do it “that way”. And as a result, there will be resistance from everybody when it comes to questioning, and even changing what has been viewed by so many as basic to the way the business has been run.

This means that when questioning everything, be sure to do it on an individual level. When digging in to any organizational or operational can of worms it is best to do it on an individual basis. Jumping back to our science fiction, alien based school of business management thought, Tommy Lee Jones summed up this phenomenon best when he was discussing whether or not to let everyone on earth know that the earth was in danger of being destroyed by aliens in the first Men in Black (MiB) movie. He said:

“A person is smart. People are dumb, panicky, dangerous animals, and you know it!”

He was pointing out that people in a group will do, say and act differently than they do as an individual. There is much that has been written about the psychology of groups (and mobs). Most of what has been written is succinctly summed up in what the quote from MiB.

This is no different in business. Almost every individual, will separately acknowledge that a change must be implemented, However, when the individuals are placed in a group, the group will almost always unanimously state that no change is possible, or if change is in fact needed, it is the other groups, and not theirs that must change. This is the group fear of change and the unknown.

We have to remember that science fiction and change in business actually have a lot in common. I think Arthur C. Clarke, another great science fiction writer put it best. He said:

“…science fiction is something that could happen – but usually you wouldn’t want it to.”

When it comes to change in business, it can also be described as something that could happen, but usually most people don’t really want it to. Change means incrementing in risk on both an individual and group level. It is doing something that hasn’t been done before. It requires leaving the current comfort zone. It is as Captain Kirk intoned in the prolog to Star Trek (both the original series and the movies):

“To boldly go where no one has gone before….”

Not everybody is built to be that adventurous. Either in space exploration, or business. That is why process has been created, introduced, and flourished in business. Process is designed to reduce the need for judgment, and add predictability and hence comfort. It in effect, tries to remove the adventure from business.

As such, it also adds impedance and resistance to the need, introduction and acceptance of change. If everyone in the process knows and accepts their role in the process, then any change introduced to the fundamental functions associated with the business will probably affect all of their roles. No one likes to have their role affected by an external entity, regardless of who or what that entity is. Hence, they will either directly or indirectly resist or impede the proposed change.

This effect is usually the genesis of the everyone knows it can’t be done phenomenon.

This brings us to the final intersection between business and science fiction (at least in this article). Terry Pratchett, author of the satirical and humorous “Discworld” series of books put it best:

“It is well known that a vital ingredient of success is not knowing that what you’re attempting can’t be done.”

Not knowing that an issue “can’t be fixed” is probably the key to fixing it. If everyone knows that is the way that things are done, then it is probably a very good place to start looking for solutions. If everyone is resistant to change, then it is probably a good bet that change is what is needed most in that organization.

When changing, you have to question everything. Especially those topics which everyone believes don’t need to be questioned. This is precisely because all the topics that everyone does believe need to be questioned, have probably already been questioned, and didn’t provide the solution. The truth is probably out there, but if you don’t question everything, there is a very good chance that you will miss it in favor of the more easily digested and implemented symptomatic solution, which is probably the one that everybody knows is the right one.

And remember what Heinlein said about what everybody knows…..

Why They Aren’t Buying

There are all sorts of allegories for sales. Hunting, farming, fishing, and a large list of others. They all seem somewhat out-doorsy and active (as opposed to passive – waiting for something to happen), but I think you get the point I’m making. Sales also seems to run in streaks. Some days it seems you can’t miss and all you need to say is “sign here, press hard for three copies”. And other days it doesn’t seem to matter what you do. You don’t seem to be able to close a door, let alone a deal.

We all like to think that it is superior salesmanship, or possibly a break-through product or technology advantage, when sales are good. We also like to point to inferior marketing and support, or a weak product offering when sales are not up to expectations.

When sales are not up to desired levels, it is usually left to management to blame poor salesmanship for the results, since both product technology and support are not readily changeable items in any short-term drive to improve sales.

I think the reality of sales booms and sales busts are more associated with those factors that either occur or evolve on a market wide basis. The deregulation of the mortgage industry led to an explosive growth in housing sales as people could then buy more house than they could normally afford, via balloon payment type and other exotic mortgages. This worked well until payments came due and real money was not available. The well documented housing bust and broader economic recession ensued.

Going a little further back into the end of the last century, was the telecom boom associated with deregulation. Companies suddenly found themselves with the opportunity to enter communications markets that they had previously been restricted from. This market attractiveness was further exacerbated by all equipment supplier’s willingness to lend these new companies the funds that they would need to by their equipment to enable access into these new markets.

This too worked well until the then new market was flooded with new competitors. The result was that there was not enough business to go around and no one had the real money needed to make their loan payments on their equipment. The well documented telecom bust then ensued as well.

In both of these examples, as well as many others across many other industries (banking, oil, etc), there were some very good times to be in sales, which were then followed by some very trying times to be in sales. It didn’t really matter what your individual effect on the sales process was.

I bring up these kind of market wide events not because I want to examine them, but because I want to exclude them from any discussion regarding why customers may, or more importantly may not be buying now. When various markets are thrown out of equilibrium by any number of market affecting legislative changes or other events, it seems that standard sales logic just doesn’t apply – usually to the eventual detriment of all involved.

I want to briefly look at why in a stable market, sales may not be achieving your desired goals.

I think that when you look at sales there are basically three aspects that need to be in place to be successful. Some may point to a multiplicity of other factors, but I think when you net them all out, you get back to these three basic ones.

The first is relationship. I know. This is trite. Relationship blah, blah, relationship. There is a reason everyone says it is important. That’s because it is. Do you trust the guy that sells you a car? No? That’s partly because you know that once he sells you a car, you are no longer his problem. You are the service department’s problem. He is probably not going to talk to you or try to sell you anything else for a while, unless you decide you need another car.

In the business to business sales world, most sales people cannot achieve their targets by simply selling something to a customer every three or four years. They have to face their customer continually. What they do after the sale is probably more important than what they do before the contract is signed. That is if they hope to get another sale.

That is how a relationship is built.

The second is the ability to solve a customer’s problem. It might be a problem they didn’t know they had. Faster, better, cheaper are always items that come to mind. Understanding what a customer wants to do as well as why they want to do it are keys here. It is in essence providing an answer to their question.

The third is providing the customer with the proper reason to buy your solution. This is usually known as a business case. If you are ten percent faster, but twice as expensive, is this acceptable? It’s hard to say at this point without more information. However, it’s a much easier decision if you are ten percent faster and the same price as a competitor.

Having a great relationship with your customer, and a great product are no longer enough. There must be a strong enough financial reason for a customer to buy. The customer must expect a sufficient return on the monies that they invest in a product in order to get them to spend those monies.

This customer return can take several forms. Does it reduce their costs of operations? Does it allow them to gain more customers? Does it allow them to get more revenue from their existing customers? And just as importantly, when does it allow them to recognize these returns. These are all very definable and quantifiable numbers.

If they are not, then in today’s business climate and environment, you may have an issue closing a sale. Quantification of customer value is rapidly becoming the key to sales success.

It should be noted that saving a dollar this year is far more preferable than potentially saving ten dollars, five years from now.

It seems that suppliers can get seduced by the elegance of their own technical solutions to their customer’s problems. They have a tendency to forget that just because what they are offering may be technically better than what the customers may currently have, that no longer means that a sale is assured. If the customer cannot identify the quantifiable benefit and returns associated with the proposed purchase, and when these returns can be expected, then the expectation should be of a difficult or delayed sales process.

Just because they trust you and what you are offering is better doesn’t mean they will buy it.

It appears that it is more and more about money, and more specifically today’s money when it comes to sales. Preparing for future opportunities, or addressing potential opportunities, or enabling future applications may no longer be a good enough reason for a customer to part with their limited amount of funds set aside for such expenditures. Customers are recognizing that if the sales discussion involves future benefits to them, then it also means that the actual purchase decision can probably be delayed to that future time when it coincides with those future benefits.

In today’s business environment, if companies are going to spend their money, they need to know what they are going to get in return. Not just the product or service that they are purchasing, but the quantification regarding what the purchased items will mean to their bottom line. How much of a reduction in costs. How many more customers. How much more will they be able to charge.

If today’s product will enable an as yet undefined application or future capability, then it is probably wise to assume that today’s customer may in fact wait to purchase that product until that future application or capability is defined and the market for and value of it can be quantified. Being bigger, better and faster for the sake of being prepared for the next big thing and the potential associated end user demands that go along with it, is probably no longer going to be a good enough reason to purchase.

If your customers aren’t buying, and there is no discernible, market wide issue causing a broader customer industry slowdown, then it is probably a good guess that the appropriate customer spend business case has not been made or met. As markets evolve to this technical solution – appropriate business case model, the solution price will remain a key aspect of every opportunity, but not so much from the aspect of how much a customer has to spend, but more from the point of view of how much the proposed solution must recoup in value for the customer, and as previously noted and just as importantly, how long it takes the customer to recoup it.

It is also possible that this lack of an appropriate specific return customer business case can turn out to be the broader customer industry slowdown, since all customers seem to be heading this direction. It can also depend on the relative competitive starting point for each customer in their respective markets.

It doesn’t seem that being bigger, better, faster or prepared for the next new thing will remain as good enough reasons for customers to buy. It appears that it will not be what the proposed customer solution operationally or technically does, but more what it financially does for the immediate benefit of the customer’s bottom line that will be the purchase decision criteria.


I’m having a little trouble getting started on this topic. With the number of articles already written about clouds in the various business publications, it seemed that it would be only a matter of time before I got around to talking about it. I am now paraphrasing a speech by Winston Churchill in that it appears: “Never has so much been written by so many and understood by so few”.

Churchill was of course referring to the RAF and the Battle of Briton early in World War Two, but this variation also seems somewhat apropos for the market battles looming for the hearts, minds and most importantly pocketbooks of corporate customers now as well as in the future.

I went out and tried to find the simplest definitions for clouds that I could. I did this for two reasons. The first is that there is already an incredible amount already written on these topics (as I noted above) and the second is that I am just the tiniest bit lazy and don’t want to have to rewrite all of it. You will notice this trend throughout this article. Here is what I came up with for “Clouds”:

1. The second studio album by Canadian singer-songwriter Joni Mitchell, released on May 1, 1969.
2. A visible mass of liquid droplets or frozen crystals made of water or various chemicals suspended in the atmosphere above the surface of a planetary body.
3. A service with any resource that is provided over the Internet. The most common cloud service resources are Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS).

I’ll skip the first two definitions for now, and focus in on the third one.

I think the evolution of the name “Cloud Services” actually came from the fact that it was difficult for technology companies to draw a “network” when using the early iterations of the Microsoft PowerPoint application for presentations. The simplest ClipArt icon that conveyed the idea of a network without having to draw in all the complexity was a “cloud”. That was what was used in all network related presentations. We all became familiar with it. Hence the cloud became synonymous with describing a network and cloud services have become synonymous with services delivered over the network.

The power of PowerPoint. If early iterations of the presentation application had contained interesting representations of multi-sided geometric shapes instead of clouds, it is possible that we might all be discussing “Polygonal Services” instead of “Cloud Services”.

Getting back to Cloud Services. Software as a Service (SaaS) is a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet. Platform as a Service (PaaS) refers to the delivery of operating systems and associated services over the Internet without downloads or installation. Infrastructure as a Service (IaaS) involves outsourcing the equipment used to support operations, including storage, hardware, servers and networking components, all of which are made accessible over a network.

The question that initially came to my mind when looking at all of these items “as a Service” was why would anyone want to do all of this over the network instead of buying the stuff and doing it the way that it had been done?

The answer seems to lie in the potential efficiencies that may be gained. Moving to “the cloud” focuses on maximizing the effectiveness of the shared resources. In the past each company and its associated users, had to purchase its own dedicated resources, whether it was software, computing or network infrastructure. Cloud resources are usually not only shared by multiple users but are also dynamically reallocated per demand. This can work for allocating resources to users across a single company, or multiple companies.

The claim is that moving to the cloud allows companies to avoid upfront infrastructure costs, and focus on projects that differentiate their businesses instead of on infrastructure. It is also claimed that the cloud allows enterprises to get their applications up and running faster, with improved manageability and less maintenance and enables Information Technology (IT) organizations to more rapidly adjust resources to meet fluctuating and unpredictable business demand.

Cloud computing is viewed as having become the vanguard offer for cloud services in that it can provide a highly demanded service or utility with the advantages of high computing power, cheap cost of services, high performance, scalability, accessibility as well as availability. Cloud vendors are claiming to be experiencing growth rates of up to 50% per year in this area. Cloud services are provided to an organization by moving away from a traditional CAPEX model (buy the dedicated hardware and depreciate it over a period of time) to the OPEX model (use a shared cloud infrastructure and pay as one uses it).

So, if the computing piece of corporate infrastructure seems to work in a “cloud” environment, then every piece of corporate infrastructure ought to work in a cloud environment, right?

I suppose this could be the case, but when I look at it a little more closely it seems that cloud based services are best applied to those capabilities that could almost be considered a commodity. In the case of cloud computing it is the basic amount of computing power and memory that are commoditized. In buying a cloud based computing service you purchase an amount of memory and a number of processing units, both of which could be considered commodities at this point.

By extension, there seems to be groups that are trying to commoditize other customer infrastructure aspects in an attempt, or in preparation for them becoming a cloud based service. If we think of routing as a commodity we end up with a number of bits (megabits, gigabits, etc.) routed per second. The same sort of approach would be applicable to switching. Pretty soon you may be able to take everything down to a function, instead of a platform or piece of equipment, and provide it as a service.

The question is when will companies and businesses be ready to look at their infrastructures, platforms and software in this way?

The most recent market analysis that I could find (from 2014 I think) shows that the total data processing market is approximately $115 Billion in annual revenue, while the Hosted / Cloud services portion of it is about $13 Billion (or a little over 11%) annually. While the portion of the computing market being served by cloud based solutions is a significant amount of money, it is still a relatively small but growing amount of the available market.

It is widely thought that computing services are the lead capability driving cloud services. That would indicate that other platforms, applications and pieces of infrastructure have not taken root in the cloud based structure and grown to the extent that cloud based computing has. That doesn’t mean that they won’t. It just means that they haven’t yet.

The market growth rate forecasts and estimates for Infrastructure as a Service (IaaS – computing, and other infrastructure capabilities) are reasonable, or at least it seems so to me. But when IaaS represents only 11% of the market, even a 50% growth as claimed by some suppliers only takes it to 15% of the market. Such is the next layer down analysis that must be done when such large percentage growth claims are made. Even at these growth rates and assuming there will be no slow down in its adoption, it appears that full Cloud Services market acceptance and utilization may still be a little ways off.

In other words, it seems that it is very wise to be aware of and prepared for cloud based services, but in the mean time it also appears that for at least the next few years the current capital based equipment solutions and services market systems will still be the majority market approach for business infrastructure, platforms and software. Cloud based services for these capabilities, for at least the shorter term will probably be a smaller, but potentially growing part of the market.

As Joni Mitchell said in the song “Both Sides, Now” on her 1969 Clouds album:

“I’ve looked at clouds from both sides now
From up and down, and still somehow
It’s cloud illusions I recall
I really don’t know clouds at all”

Wow. She wrote that forty six years ago. I’d say that’s pretty good but then I always liked Joni Mitchell.

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.

Disposable Business

A long, long time ago, in a galaxy far, far away, a family sat despondently in their family room. They didn’t know what to do. Their color television had for some reason stopped working. Since they had never felt the need to communicate with each other while the TV had worked, they were now horribly out of practice. What to do? Things looked bleak. It was time for action.

Now here is where things get really weird. The eldest male of the family, the nominal head of the family unit (I say nominal head as this was only a fictional title. He actually reported to his mate, the most powerful woman in the universe) stood up, put the non-functioning television in the family’s means of conveyance (re: minivan) and took it to a place that was known as the repair shop.

Yes, he actually took the TV in to be repaired.

I can actually remember back to a time when this would not have been a fictional story. The reporting structure of the family is non-fiction. Every male, nominal head of a family does in fact report to their respective specific most powerful woman in the universe. The rest of this story is border line science fiction. Today when something breaks we don’t seem to fix it. We don’t even seem to be inclined to try and fix it. We just throw it away and go get another, newer one.

What used to seem to be a society based on the utilization of durable goods seems to have evolved to society based on the purchase of disposable goods. We don’t seem to want to fix anything anymore. When something breaks our first inclination is to get a new one. If that is not eminently feasible, the next step is to call someone to have them fix it. It has become the societal norm these days.

Now let’s go to go to different galaxy that is not so far away. We still have a disposable versus a repairable product mindset, but now we will be talking about businesses, not products. In this galaxy there is a business that has been performing well for many years, making products that have been well received and are well thought of by their customers. I was going to say that they made high quality, repairable televisions, but that would have been just a little excessive in my opinion.

Let’s say something now happens to this business. For whatever reason it is now no longer performing as well as it did. Its products are no longer well received nor are they well thought of by their customers. For lack of a better description, this business can now be considered broken.

Are broken businesses as disposable as broken products? How does a business actually break anyway? In a broken product, it is usually a component that fails and brings down the entire product. What happens when the components of the business are all still operating as they did when the business was not broken?

We were a culture that used to fix our own cars, change our own oil, fix our own flat tires, do our own home maintenance and improvement work. Now we just get a new replacement or call someone to come fix it. How does this culture translate to our new business models? What do we do when the current business model doesn’t work anymore?

I am fond of quoting Albert Einstein. I think he is universally recognized as a pretty bright guy, with the theory of relativity and all that. One of my favorite quotes of his, and I have used it before is:

“We cannot solve our problems with the same thinking that created them.”

I have met a few leaders that could actually change the way they think. There have not been many, but there have been a few. Most of the time a manager learns a way to do something successfully gets rewarded for that approach and spends the rest of their career replicating that solution set. They continue to think the same way. They just try to apply the same methodology in different situations.

Think of the old phrase:

“When you are a hammer, everything looks like a nail.”

In effect, they were once successful as a managerial hammer, and seem to have dedicated the rest of their managerial life to finding another perfect business problem nail.

Businesses are not disposable, and can invariably be repaired. Repairing a business changes it. It takes a different mindset. You can’t just call someone to come fix it. You can’t call a plumber or electrician to come fix it for you. You have to understand the plumbing and wiring of the business yourself. You have to get back to the mindset of changing your own oil and fixing your own flat tires.

Sorry for the poor metaphors, but I think you get my point.

Part of the solution may be to get a good plumber or electrician on your team, and to listen to them when they give you their recommendations and opinions.

I think this is the essence of learning to change the way you think. Sometimes you are the proper hammer for the current nail. Sometimes someone else is the proper hammer. The key is not being locked into a specific method or process of solving problems, and being able to recognize when things have changed and some different thinking is required.

A broken business is made up of many “working” people. I think that despite the trends to the contrary, they are not disposable. If they are performing poorly it is usually not because they want to perform poorly but rather they have been given poor leadership and are focusing on the wrong issues (re: nails). Disposing of them and getting new people will not fix that problem.

Remember, the thinking of those that got the business into its current state will usually not be sufficient to get it out of that state. The way the business is being managed, or those that are managing have to change. It is difficult for a leader to recognize that they must change. I think it is almost impossible for a manager to recognize that they must change.

I think our disposable product culture has taken its toll on our ability to repair broken businesses. At the risk of sounding too trite we seem to be predisposed toward disposable businesses. We seem to have evolved a mindset that if the current compliment of people cannot achieve the desired goals that we should dispose of them and replace them (like our products) with newer models.

The problem with that thinking is that it seems to be some of the thinking that may have been responsible for getting the business into its current state, and as Einstein noted, that probably won’t be sufficient for getting it out of that state.

Big Deals

I try to avoid starting off by asking a question, but sometimes I just can’t help myself. Is it just me or does it truly seem that in many instances it is possible for business egos to get in the way of business IQs as the size of the business opportunity increases? This big deal blindness is a phenomenon that I have encountered several times in the past. As the magnitude of the numbers being considered for whatever purpose (sales, costs, scope, merger, etc.) increase, there seems to have been some instances in the business past where the momentum of the deal takes over and the basic principles of business analysis and management appear to be forgotten.

This type of behavior does not seem to be confined to any one company or industry, but rather emerges unexpectedly for a while in one place and then just as quickly goes dormant again. But not until after some sort of a business millstone has been placed around the corporate neck. It then takes all of the business’s senior leadership to formulate the path back to recovery. Meanwhile the general process is that those responsible for “the deal” have already declared victory, taken their bows and then very quickly exited stage left.

I am not specifically talking about Mergers and Acquisitions here (M&A) when I talk about things such as the magnitude of the deal, but rather more along the line of basic internal business conduct. However, I think some of the lessons that have been learned by some of these humongous M&A failures of the past can equally be applied to business situations that are more related directly to the operation of the business.

Here are a few lessons for business deals that leaders ought to take into account, at least in my opinion, before they start looking at the next big opportunity, at least in my opinion:

• Unlike the Bob Dylan song (Times They are a Changing), the times are not changing. The same basic rules apply to big epic opportunities as they do to the smaller ones. Profitability still matters. Core competencies still matter. The magnitude of the deal disproportionately increases the risk of the deal if the probability of success is based on a significant change or transformation away from what has been the business’ norm is associated with the deal.

The success of the deal is usually associated with doing something that you already know how to do, to a great extent. Growth and expansion by necessity mean that you need to take on some new aspects and scope with each deal, but unless you are relying at least in large part on your known core competencies, the big deal that is supposed to be a game changer or entry into a new market is usually an even bigger risk.

• In too many instances it seems that management may have felt the need to make a big, bold, landscape shifting, game changing sort of deal. This may be as a result of a desire to get into a new market or in response to some sort of internal or external business pressure. The idea appears to be to make a dramatic market statement or splash in order to signal some sort of new direction.

Few businesses do the new, big and splashy right the first time. Unfortunately if the deal is big enough and as a result generates a situation that is bad enough, there may not be the second opportunity to do it right. Change associated with business core competencies or structure takes time. It can’t be forced as a result of a big deal. A certain amount of ego is essential for leadership. Too much ego results in deals where the mouth has written a check that the brain can’t cash.

Deal success usually comes about as the result of doing the basics well. This capability evolves from doing similar types of deals on a regular basis, understanding what your deal or market sweet spot is, and maintaining a stable business approach. If you have been successful doing smaller deals in one area, the chances of having issues with a larger magnitude deal outside of your knowledge area are significantly increased.

• Sometimes deal momentum takes over and supplants common sense. When a large opportunity or deal is first noted, it begins to appear in the various business forecasts. It doesn’t matter that it may be exploratory or of initially low probability. The longer it stays visible, the more it becomes part of the expected fabric of the business. Eventually it becomes expected and sometimes even counted on as part of the business results.

It is very seldom that any amount of caution, qualification or warning can stop this progression. It eventually evolves that big deals that have been around for a while become deals that “cannot be lost”. Once this mentality has set in it leads to a set of seemingly logical steps that culminate in an illogical deal. Costs can be shaved, schedules can be condensed and onerous terms accepted all in the name of getting the game changing big deal done.

This type of deal behavior would normally result in a difficult environment for success if the opportunity was associated with a core competency of the business. When it is associated with a new market or an unproven capability the performance and results are usually not so pretty. The budgets and the schedules are usually the first items to be impacted, with the profitability and customer’s satisfaction very close behind.

Perhaps again we are seeing another business manifestation of one of C. Northcote Parkinson’s Laws, specifically Parkinson’s Law of Triviality, from his 1957 book “Parkinson’s Law”. In it amongst other topics, he examines the amount of time and attention that businesses spend on smaller (trivial) items as opposed to the larger, more complex and more important ones. In summary:

“He dramatizes this “law of triviality” with the example of a committee’s deliberations on an atomic reactor, contrasting it to deliberations on a bicycle shed. As he put it: “The time spent on any item of the agenda will be in inverse proportion to the sum [of money] involved.” A reactor is used because it is so vastly expensive and complicated that an average person cannot understand it, so one assumes that those that work on it understand it. On the other hand, everyone can visualize a cheap, simple bicycle shed, so planning one can result in endless discussions because everyone involved wants to add a touch and show personal contribution.”

Big deals are an important aspect of any business’s growth plan. They require a significant amount of discipline as businesses seem to get more anxious to close them, the closer they believe they are to closing them. (Perhaps this can now be cited as Gobeli’s Big Deal Corollary (BDC) to Parkinson’s Law if Triviality.) This phenomenon can result in final agreements that are far from the original big deal concept and far from beneficial to the business. The risk associated with the big deal increases rapidly if it is outside of the business’s normal operating area, or is associated with senior management’s plan for the transformation of the existing business or business model into something else.

Big deals are quantum events that must be given at least the same amount of deliberation if not more than that associated with the standard business conduct, regardless of the business’s desire or dependence on their closure. If you are going to try to successfully change the business, it is also probably better to not start the change, or make it dependent on a big deal.

Finding Inspiration

I need to send out thanks to my friend Ulrich for the inspiration for this post. Uli is a friend that I met in Brazil on a trip sometime back. He had some really amazing electronic gizmos and gadgets that made me quite jealous. While we were talking about his electronics preferences the conversation shifted, as it often does to other topics. One of the topics we touched on was our reading preferences, and the types of books that we both drew inspiration from. I mentioned that I like to read, and prefer to read a broad range of literary genres and topics. Uli too likes to read but said he usually keeps his reading centered on business and management oriented books and materials. Those happen to be one of the specific genres that I for the most part avoid. It was interesting that we had such divergent approaches to the items that we read, and the information we applied to our business responsibilities.

As I have noted in the past, many of the items I have read seemed initially to be outside of a direct association with business and management. This isn’t by chance. I have read many management articles and books. However in doing so, from my own point of view, I started to notice many similarities to the tenets covered, and only slight variations in the applications of them. There were only so many ways to dress up the ideas of the need to be flexible, that things are going to change and how to deal with these inevitabilities.

That type of management book similarity has sent me off in a couple of different directions when it came to reading and applying what I read to business. One direction I went was into the past to see where many of these “new and improved – yet strangely similar” business strategies came from. I have covered this topic several times in the past. Remember, business, commerce, and strategy has been around almost as long as humans have been around. I have found that sometimes the best books about business are not actually about business. If I need true specific business management input or strategy I go to the four texts that I see as the basis for just about everything in business management and leadership that has been written since. They are:

The Art of War by Sun Tzu. This is a twenty five hundred year old text written by a pre-china general that never lost an engagement that is still used in military academies around the world, and in many business schools.
The Prince by Machiavelli. A sixteenth century political and strategic treatise by an Italian diplomat and political theorist.
The Book of Five Rings by Miyamoto Musashi. A text on focus, adaptation and martial arts by a seventeenth century Japanese swordsman.
The Art of Worldly Wisdom by Baltasar Gracian. A book of maxims for dealing with the real world written by a seventeenth century Spanish monk.

These are not the books for everyone. These are just the primary books that I turn to when I need a jumping off point for inspiration on a specific business or related issue. I continue to reread them and usually pick up something new every time I do.

I recommended them to Uli. We will see if he reads them and agrees with my assessment of them, or if he continues to buy and read the latest derivative management strategy books that are on the market. I guess it doesn’t really matter as long as he is enjoying and finding value in what he is reading.

The other direction that I go is to read just about anything but management books. This covers the literary spectrum from magazine articles to Blogs to Science Fiction novels to Classic Literature. Much of it is not directly applicable to anything associated with business and leadership, but occasionally there are some interesting aspects that present themselves. Whenever I per chance happen to make one of these unexpected business leadership synaptic connections with something that I have read I try to capture it specifically and share it here. Hence the idea of inspiration as the topic for this piece.

Uli on the other hand noted that the source of business inspiration for him came from business oriented literature, be it articles or books. If this works for him, then great. There seems to be a never ending supply of new management and business oriented articles and books every day for him to read. If they provide inspiration to some of their readers then there must be some value in them.

Inspiration for me is a strange element. I have very seldom had it strike me metaphorically from the blue. I normally get it by recognizing analogies, connections and parallels to seemingly unrelated events and topics. I look for stories of success or leadership in seemingly unrelated fields and then wonder how it might be applicable to business. This approach has led me to better understand the leadership secrets of Captain Kirk from the Star Trek shows and movies, as well as how Jerry Seinfeld applied himself to his craft as a writer to such a successful extent. Along a non-literary line, it has also taught me how to deal with and negotiate with my soon to be fifteen year old son when it is time for him to mow the yard. Success can be achieved from many different directions.

The point here is to start recognizing what keys your specific moments of inspiration. What are you doing, what are you reading, who are you talking to when you have your best ideas? More importantly how do you recognize them when they occur and how do you capture them? There is something about those environments that triggered the creative process. A little self analysis and cognitive association will go a long way here.

I have never been able to innovate because I have read a book on how to innovate. I have read many other books on many other topics that I cannot do, even though I have read about them. I have read about time and space travel and even though I might like to try it I don’t think I can do it just because I have read a book about it. On the other hand, I did learn about physics and differential calculus from books, but I also had a reasonably highly skilled mentor / professor to help me there. Almost all the innovations that I have been involved in have come from trying to apply something new from outside the accepted business norm, to the business norm. That and a significant amount of stubbornness in refusing to listen while everyone else patiently explained to me why my new idea would never work.

It is a significant step going from knowing where you can hope to find inspiration to actually doing something with the inspiration you found.

I also think that part of the reason that I have been able to draw business inspiration from such a diverse literary catalog stems from the fact that I genuinely like to read. I enjoy books. That may be the key to finding inspiration, at least for me, and probably others. I seem to draw my inspiration from relating the things I like to do, like reading to the other things I enjoy in business. I would think that this might be the case for others as well. Conversely, I would guess if you dislike something enough it may be a source of inspiration in how to avoid or improve it. I’ll have to think about that one a little more.

Inspiration doesn’t seem to be a well that I can just wonder over to and dip a bucket in and come out with a new idea. It is more of an understanding of how things work and how I relate to them, and putting myself in the positions where there has been a proven tendency to find inspiration, and then being aware enough to recognize it when it hits. It seems to be the doing of something, possible fully unrelated to the topic that allows you to form the new associations to the old issues.

For me anyway, that does not usually involve the reading of the latest management self help, or how to innovate book. In this case it came from talking to a friend out those books.

Over Qualified

We have all to some extent undergone upheaval in our markets, businesses and careers. I have also continued to hear the phrase “over qualified” when it comes to new roles or new career paths. I have commented many times in the past about the fact that the way I look at the world can be considered to be out of step with the accepted norms, or conversely just “different”. Perhaps it is now proper for business managers to understand that throughout change in order to successfully lead you probably need to be out of step with the accepted management norms and be different.

My first question is: How can anyone be considered overqualified? As a leader don’t you want everyone on the team to be as wildly successful at their responsibilities as is humanly possible? Doesn’t the very act of them being successful by its definition make you successful? Don’t the most qualified individuals have the greatest probability of being successful?

Who will knowingly take on a team member with less training, or less education, or less experience, or any other material qualification than another potential team member? You have to pardon me here, but I can never remember thinking that I was looking for someone with lower qualifications. I was, and continue to always look for the best possible team members.

So if this is the case for the majority of business leaders, why is there so much being written about people being over qualified for various opportunities? I understand that the markets have changed and there are many people with significant capabilities whose previous positions for one reason or another no longer exist. However, their knowledge and capabilities are still there and can be an incredible resource to any team.

I think it comes down to the difference between management and leadership. Leaders want the best on their teams. Strong and qualified team members drive the leader to be just that, a leader. Leaders need to have the confidence to embrace the challenge of leading a talented and possibly “over” qualified team. It seems that over qualified people may need unqualified leadership.

It also seems that managers may also only want the best on their teams but with the only stipulation being that the team member not be a challenge, to them. Leaders understand that they may not have the market cornered on hard work or good ideas. They look for team members that can challenge them and each other while working toward the business’ goals and objectives. Managers may have a tendency to view this sort of behavior as a challenge to their personal authority instead of an opportunity for everyone to do better.

This type of behavior is not a challenge to authority, but it is a challenge to manage and lead.

Highly qualified individuals in my experience are probably more prone to display this sort of challenging behavior. If they think they have a good idea, or see an issue with the current plan they are apt to voice it. I think this is a very good trait. Leaders should not be the only ones pushing things forward; or rather I guess I should say that leaders are the primary ones pushing things forward, I just prefer that there be multiple people pushing on the team.

Better qualifications usually come with time. More time in school usually equates to a better educational qualifications. More time in training equates to a more work ready resource. More experience means that someone already has a track record of performance in similar or equivalent roles. When a leader is looking for someone for their team, these are exactly the types of qualifications they should be looking for.

A manager on the other hand may be concerned that someone could potentially have qualifications, or worse the capabilities to actually perform that manager’s job. That insecurity seems to me to be at the root of the “over qualified” argument. After all, who would want to bring someone onto the team that might be a better or more capable performer than the manager of the team?

A leader would.

This approach does not mean that you should look for only the most educated, trained and experienced. Having those qualifications does not necessarily make them the best. There is also a little thing called “talent” that must be factored in, and it knows no age limitation. The talented can be young or old, it doesn’t matter. Talent is more qualitative in nature and I cannot think of any hard and fast rules for identifying it. But I think we all know it when we see it.

I have mentioned in the past that I am a would-be musician. I enjoy music. I understand its theory. I practice. When you are doing something that you enjoy, practice is not work. But I also understand that I do not have the innate talent for music that others may have. It just means that I have to work at it harder than some for whom it comes naturally. It is a challenge to me and for me to keep up with them. And boy is that fun. To take the analogy one step further, even in music I try to search out and play with those musicians that are more talented than I am, because in turn it makes me a better musician for having played with them. There is no being “over qualified” here either.

None of us should expect to inhabit the roles we are in forever. Each assignment is indeed a step in our careers. Just as the roles associated with the members of the team are presumably steps in their careers. A certain amount of change is good for both the team and the individual. It keeps the organization vibrant. Obviously too much of a good thing can be detrimental. I think we have all been in organizations where the turnover rate exceeded a healthy level started to cause issues.

The point here is that having the best qualified people in the organization provides a capability to deal with both leadership and team changes. Team members need to be capable of and prepared to step in and step up to new roles as they occur. Having well qualified team members provides added strength to the team and the organization as a whole.

As I pointed out, leaders should not only consider the most trained, most educated and most experienced people for their positions. On the contrary, a leader always looks for the best qualified and most talented candidate for each specific position. Being educated, trained and experienced may be an indication of talent but it should not be the only criteria. Having education, training, experience and talent in one discipline, say accounting, does not make that person the best qualified candidate for a role in marketing. However if the role in question was in accounting, I would be hard pressed to agree with any statement to the effect that the person described above was “over qualified”.

Six Months Out

I was watching TV the other day, which in itself is not too interesting or inspiring. I find it actually kind of numbing as I am not too much into the police procedural shows that seem to be constipating the multiplicity of channels that are now available. However, I did see a new commercial that got me to thinking. It was by an electronics manufacturing company (which I won’t name here) that I had heard of in the past, but who I had never seen advertize on TV before. Their concept was interesting and their catchphrase was different. They were urging people to be “five years out”.

The focus of the ad was on innovators who created products and inventions that were ahead of their time. I didn’t quite catch the connection between Nicola Tesla (and others) and a modern day electronics manufacturer, but I guess that is what literary license is all about. It was however far more interesting and entertaining than the prime time video pabulum that was sandwiched around it.

What it did convey to me was that thought leaders depicted in the ad were thinking far ahead of the standard process. While being “five years out” might be a little excessive for a business leader (I am hard pressed to recall what our five year strategy was five years ago, but I am pretty sure it is not what we are doing now) I don’t think that it is excessive for a business leader to be “six months out”.

Six months out is that uncomfortable gray area between what we are doing right now in this quarter to make our numbers and what we are expecting to be going a year from now. It is the area between the immediate and tactical, and the long term and strategic. It is the area that a successful business leader can either see or anticipate what will need to be done today to align with the goals of the next year.

As we approach the end of another third quarter we should all begin preparing for the annual planning process. This is the process where we set the goals and objectives for the business for the next year. We also usually try and set a three year strategic plan for which the next year is the first year in the three year plan. We seem to do this every year without referring to either of the previous two years’ strategic plans. This in essence means that you are setting an annual plan and hoping that the sum of your last three annual plans is at least in the direction you need to move the business.

Profiling is something that American Civil Liberties Union quite accurately points out is an unacceptable policy for those with authority. However it is a necessary part of any planning process. Having a sales order target for the year is a good thing; however closing all of those orders in the last week of December will leave little time for the business to translate them into revenue, and beyond that into cash, which will be needed to pay all the sales commissions.

A business leader needs to be able to profile the timing of events across the planning period in order to anticipate the needs of the business. In the planning process an annual goal has been set. Instead of trying to plan and profile an entire year I have found that it is easier to break the year into two, six month sections. I can more readily visualize and anticipate what I will need and where I will need to be six months from now based on where I am and the trajectory that I have today.

Failing to take a six month out approach to profiling a business’ year usually results in what is commonly referred to as a “hockey stick”. This is where a business sets three quarters worth of relatively modest objectives and growth only to run head first into a significant and usually unattainable spike in desired performance in the fourth quarter.

I think we have all either been party to, or victims of the dreaded “year end push”.

Nothing happens immediately in business, unless you unexpectedly announce bad financial performance. Then your stock price immediately drops. Aside from that type of event, it takes time to affect change. Adjusting staff size either up or down to meet business needs takes time. Adjusting production capabilities to meet demand also takes time. Increasing sales doesn’t just occur because it is in a plan. Suspected new customers need to be identified, then qualified into prospects, have their issues addressed and their solutions proposed, contracts agreed and then closed.

That’s a sales order. There is then the time associated with the process to deliver on the contract and turn that order into revenue. Then there is the time it takes to get paid and turn the revenue into cash.

While “five years out” is a great concept for a commercial, it is a difficult idea to run a business on. It’s too far out. However a good business leader should have the ability to be at least “six months out” in order to connect the tactical activities of today to the strategic objectives of tomorrow. Being six months out enables to the business leader to anticipate and avoid many of the business issues and pitfalls that seem to plague the standard business manager.

Einstein said: “Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.” While I am absolutely nobody to question a mind like that, I think that hoping for tomorrow will not be the appropriate approach to business.

I think I would more agree with Benjamin Franklin, who said: “By failing to prepare, you are preparing to fail.”