Archive for September 2009

Goal!

September 30, 2009

The other day I had lunch with a university professor and former consultant. We talked about the Executive Mastery Fellowship program that I am developing for CEOs and Board of Director members. One of the critical questions we discussed was the nature of the pain that CEOs experience; is that an insufficiency in goal-setting or in solving a particular problem and implementing its solution? At first sight they seem to have goals but they are struggling with their realization.

This raised another critical question regarding a consultant’s moral conduct. Should consultants just answer questions uncritically, take the money and leave or look for the right question first? The answer is not always obvious especially in those critical issues that require self-examination which can evoke serious push-back and possibly the loss of an attractive assignment. Here’s an example: I consulted with a small manufacturing/marketing company in Seattle, WA that received a cash-offer for the purchase of a container load of their products from a wholesale buyer. As this could possibly become a new and recurring source of revenue, they wondered whether they should accept or reject the enticing offer.

The idiosyncratic consultant’s answer is “It depends”. It depends on what? Well, what is the bigger picture perspective? From a pure financial point of view they should take the money because cash is king and liquidity was an issue for my client. This is a good answer but is it the answer to the right question, the question that would bring this company closer to achieving its goals?

From a strategic point of view they needed to ask some critical questions first; questions about their own goals and mission and that of the wholesale buyer. It turned out that my client wanted to build a brand around superior quality that commands a superior margin. The wholesaler turned out to be an Internet marketer who dumped my client’s products on the market at seriously discounted prices. As a result, the variance in prices for one and the same product between e-bay offerings, the dealer network and factory-direct was in some instances as high as 92 percent!!! This is detrimental to the image of the Brand.

The lesson learned is that goals exist within a hierarchy. Purpose translates into a vision. Vision translates into a Mission and in turn, that Mission must be translated into a Competitive Strategy. Strategy must be broken out in long-term Goals for the different departments and these Goals must be interpreted and defined into short-term Objectives. In other words each hierarchical level within the organization must support the objectives and thus Goals of the next highest hierarchical level, all the way back to purpose. In other words, observing the hierarchy of Goals is the easiest tool for preserving integrity or wholeness (read: fewer problems, less friction and conflict, higher net-profits) inside your organization. It takes some work but I guarantee it’s worth your time and efforts!

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The Wright brothers were right!

September 30, 2009

For some years I have been afflicted with the belief that flight is possible to man.” In pursuit of any available data and information on the topic, Wilbur Wright wrote this line to Octave Chanute, a contemporary and eminent pioneer in the field of aeronautics, on May 13th, 1900.

Because Wilbur wanted to fly, which he could not achieve without any assistance, he set out to build a flying-machine; the vehicle for the pursuit of his purpose. Together with his younger brother Orville, he decided to break-up the project in three parts:
1. Creating a wing that would produce enough lift to carry a person.
2. Discovering a control mechanism for steering the flying-machine.
3. Adding an engine to make flight sustainable.

The biggest challenge for all pioneers was conquering the issue of control. This was such a hard nut to crack that most pioneers settled for creating an inherently stable machine that could fly in straight lines. However, the bicycle mechanics Wilbur and Orville knew from personal experience that an inherently unstable machine, such as the bicycle, would find its stability in its interaction with the human intellect. In other words, Wilbur and Orville were comfortable with the unstable nature of their flying-machine and it didn’t take them very long to figure out the three-axis control system of Yaw, Pitch and Roll that is still used in every single aircraft today. All aircraft derive their stability from people operating the control system, including those equipped with intermediary technology such a fly-by-wire, flight-management computer or auto-pilot. The Wright brothers were right!

http://commons.wikimedia.org/wiki/File:Wrightflyer.jpg

How is this relevant to executives of commercial organizations? Well, the organization is also a vehicle for the pursuit of a specific purpose. Furthermore, organizations are inherently unstable and need people for their guidance and control; after all, financial statements do not balance themselves! No employee can be allowed as a passenger who’s there just for the ride. No matter how much technology you have deployed, people control the business and they steer their organization towards success or failure.

The fact that people make mistakes is part of the vehicle’s inherent instability and this should not be remedied by “Zero-Tolerance” practices or replacing people by technology but by pro-active adjustments to the conditions under which humans work. Extensive studies into human error have concluded that “Human error is not the cause of failure but the symptom of a failing system”.

Who design, build, maintain, update, operate, manage, improve, change, grow, audit, legalize, finance and market that failing system? Right, people do! How does one turn a failing system into a successful system? Right, by engaging your employees; all of them! Do not turn anyone into a passenger who’s there just for the ride by low-balling their importance; if they’re not on the team you’d probably don’t need them. Who’s taking the lead? That must be the Chief Executive Officer! Happy landings.

Bigger, Higher, Faster, Farther …

September 29, 2009

Facts tell but stories sell. Here’s an up to date story that’s of immediate relevance to your business. That’s right; I’m talking to you, the CEO decision-maker with ultimate authority and ultimate responsibility for the success and failure of the company.

The highly successful F-16 fighter jet was developed in secret; not just kept away from the outside world but from the “Stars & Bars” inside the Pentagon; the generals that could make or brake the project. Sounds crazy right? What was the conflict of interest you might ask? Well, the project-instigator was a phenomenal fighter pilot who was after an aircraft that would command air-superiority and the Pentagon staff wanted the latest and greatest; nothing but the best of the best. Their jet should be bigger because they believed that was better and their jets should fly higher, faster and farther distances for being a worthy successor to the current jets. This zeal for having these capabilities dominated rational thought about the function of fighter aircraft and thus what they should look like; form follows function.

If the wishes of the fighter pilot and the Pentagon Generals sound rather similar to you, then think again. The fighter pilot saw the aircraft as a Means to an End; air-superiority. The Pentagon Generals saw technology as their Means to an End; packing all the latest and greatest that US technology had to offer into a single aircraft. This is a perfect example of what Albert Einstein meant when he said: “Perfection of means and the confusion of Ends characterize our age”.

So, the question is “What makes a great aircraft?” Well, that depends on your definition of success or on the End you have in mind! Is it about the prestige that comes with deploying state-of-the-art technology for its own sake or serving the Tax-payers; defending them from all foreign and domestic threats? How much are we willing to spend? What gives us the biggest bang for our bucks? Shouldn’t there be an objective organizing principle?

Our fighter pilot, US Air force Col. John Boyd developed such an objective organizing principle in the form of a computer program that produced the design principles for the F-16. He knew that success was a trade-off between many factors. For example, every additional engine burns additional fuel that needs to be carried which increases weight and changes the aero-dynamics and requires the size of the aircraft to grow. Bigger radars have bigger radar domes that increase the diameter of the aircraft’s fuselage, which increases drag, reduces fuel efficiency and aircraft agility. Consequently, the question becomes “What are the bare-bone features necessary for being successful?

Go to slides 37 and 38 of a presentation about the F-22 and F-35 1) fighter aircraft that you can find here: http://www.cdi.org/pdfs/Stevenson%20F-22%20Brief.pdf
What makes more sense to you when stealth operation is a critical success factor; designing a small aircraft for specific tasks or making a one-size-fits-all aircraft for the Air force, Marines and Navy of all NATO-partners that is big and easily visible with the naked eye and thus requires radar, radios, etc. to make the aircraft less visible on radars but that increases shape and weight that needs to be compensated by other on-board technology, making bigger engines necessary that consume more fuel and thus put out more heat that can be spotted by infra-red detectors and on-and-on?

Do you see the analogy between the Pentagon-logic and that preached by military contractors and in your case service providers and professionals? They make tons of money off you. Military contractors help the Pentagon gold-plate fighter aircraft and as a result, jets have become ineffective and too expensive to buy and operate; they are compromises for all the specific tasks they were meant to perform.

Your decisions to buy-into the advise of many self-serving service providers and professionals gold-plates your organization too. Just like the Pentagon, you are committing predatory cultivation on your own organization with the best of intentions, no-doubt. However, your investments have sky-rocketed, products and services that were meant to differentiate yourself from competitors have been standardized and their value propositions have converged with those of competitors. As a result, you are burning more money than before for an organization that is less effective in satisfying client needs and if that’s not bad enough, you are forced to fight a war of attrition on price; your only differentiating quality.

Please, don’t blame your poor results on the economy? Business is not bad because of the economy but the economy is bad because of the way you do business! Keeping cost down is important but not without being relevant to buyers who are willing to pay the profit margin that you deserve.

Realize that the driving force behind any business is its people. People provide your strategic ability to serve clients, to make good on your brand-promise and instill trust and confidence for creating loyal customers. People do business with people; they make decisions, observe other people’s needs, create tools and provide customer service. Your buyers are willing to cut you some slack and help you be effective and relevant when you serve humanity and sustainability. Now is the time to re-direct our intentions away from Bigger, Higher, Faster, Farther and to pursue our purpose in life by defining success in terms of goals that enhance humanity and sustainability so that organizations can thrive on their own terms; Have fun!

1) The Pentagon insiders couldn’t wait for John Boyd to leave so they could throw out his organizing principle and go back to business-as-usual with the predictable results that are plaguing the development of the F-22 and F-35.

Is our approach to business insane?

September 23, 2009

Albert Einstein once described insanity as “Doing the same thing over and over again and expecting different results”. He also said that: “The significant problems we face cannot be solved at the same level of thinking we were at when we created them.”

 You don’t need to be an Economist or a Business analyst to conclude that the human race IS facing significant problems when even the mightiest of companies and industries collapse. Then, the one remaining question is: “What IS our current level of thinking about business?” or “Why does it get us into so much trouble?”

 Well, we slice up organizations into silos of specialized knowledge such as finance, marketing and Information Technology. So, if your toolbox is filled with financial degrees, you have programmed your mind to solve financial problems with financial solutions. This explains the near insatiable appetite for more detail and specialization for optimizing effectiveness and efficiency of anything done inside the company. No wonder your options to improving Bottom Line results are limited to either Raising prices, Increasing sales or Cutting costs. But, no body cares about efficiency if your products and services fail to attract any buyers!

 Is it possible that organizations collapse because we have forgotten the Purpose or raison d’être of organizations? What’s our organizing principle anyway? I know we need to make money but does that mean that making money is the purpose? Because human beings need to eat and drink, does that imply that eating and drinking must be the essence of life? We are trapped and bouncing off the walls inside our own boxes. Is it possible that we are on the wrong track and have come to a dead-end?

 No matter how much smarter we work, or how much we improve our proficiency in performing ordinary tasks extraordinarily well, we’re still on the wrong track- period! Therefore, we don’t need more best-practices or newer, more advanced and faster tools because they represent only better means to wrong ends. Albert Einstein foresaw this obsession with tools of ours when he said: “The perfection of means and the confusion of ends seem to characterize our age.”

 Nonetheless, from Universities to networking events we are offered more of the same solutions, but now with the additional mentioning in the title of: “… in difficult times. Is that insane or not? You be the judge.