Category Archives: Leadership

Strategy Lacking Purpose Will Always Fail

GUEST POST from Greg Satell

In 1989, just before the fall of the Berlin Wall, Francis Fukuyama published an essay in the journal The National Interest titled The End of History, which led to a bestselling book. Many took his argument to mean that, with the defeat of communism, US-style liberal democracy had emerged as the only viable way of organizing a society.

He was misunderstood. His actual argument was far more nuanced and insightful. After explaining the arguments of philosophers like Hegel and Kojeve, Fukuyama pointed out that even if we had reached an endpoint in the debate about ideologies, there would still be conflict because of people’s need to express their identity.

We usually think of strategy as a rational, analytic activity, with teams of MBA’s poring over spreadsheets or generals standing before maps. Yet if we fail to take into account human agency and dignity, we’re missing the boat. Strategy without purpose is doomed to fail, however clever the calculations. Leaders need to take note of that basic reality.

Taking Stock Of The Halo Effect

Business case studies are written by experienced professionals who are trained to analyze past situations from multiple perspectives. However, their ability to do that successfully is greatly limited by the fact that they already know the outcome of the situation they are studying. That can’t help but to color their analysis.

In The Halo Effect, Phil Rosenzweig explains how those perceptions can color conclusions. He points to the networking company Cisco during the dotcom boom. When it was flying high, it was said to have an unparalleled culture with people that worked long hours but loved every minute of it. When the market tanked, however, all of the sudden its culture came to be seen as “cocksure” and “naive.”

It is hard to see how a company’s culture could change so drastically in such a short amount of time, with no significant change in leadership. More likely, seeing Cisco’s success, analysts looked at particular qualities in a positive light. However, when things began to go the other way, those same qualities were perceived as negative.

When an organization is doing well, we may find its people to be “idealistic” and “values driven,” but when things go sour, those same traits come to be seen as “impractical” and “arrogant.” Given the same set of facts, we can—and often do—come to very different conclusions when our perception of the outcomes changes.

In most cases, analysts don’t have a stake in the outcome. From their point of view, they probably see themselves as objectively analyzing facts and following them to their most logical outcomes. Yet when the purpose for writing an analysis changes from telling a success story to lamenting a cautionary tale, their perception of events tends to change markedly.

Reassessing The Value Chain

For decades, the dominant view of business strategy was based on Michael Porter’s ideas about competitive advantage. In essence, he argued that the key to long-term success was to dominate the value chain by maximizing bargaining power among suppliers, customers, new market entrants and substitute goods.

Yet as AnnaLee Saxenian explained in Regional Advantage, around the same time that Porter’s ideas were ascending among CEOs in the establishment industries on the east coast, a very different way of doing business was gaining steam in Silicon Valley. The firms there saw themselves not as isolated fiefdoms, but as part of a larger ecosystem.

The two models are built on very different assumptions. The Porter model sees the world as made up of transactions. Optimize your strategy to create efficiencies, derive the maximum value out of every transaction and you will build a sustainable competitive advantage. The Silicon Valley model, however, saw the world as made up of connections and optimized their strategies to widen and deepen linkages.

Microsoft is one great example of this shift. When Linux first rose to prominence, Microsoft CEO Steve Ballmer called it a cancer. Yet more recently, its current CEO announced that the company loves Linux. That didn’t happen out of any sort of newfound benevolence, but because it recognized that it couldn’t continue to shut itself out and still be able to compete.

When you see the world as the “sum of all efficiencies,” the optimal strategy is to dominate. However, if you see the world as made up of the “sum of all connections,” the optimal strategy is to attract. You need to be careful to be seen as purposeful rather than predatory.

The Naïveté Of The “Realists”

Since at least the times of Richelieu, foreign policy theorists have been enthralled by the concept of Realpolitik, the notion that world affairs are governed by interests, not ideological, moral or ethical considerations. Much like with Porter’s “competitive advantage,” strategy is treated as a series of transactions rather than relationships.

Rational calculation of interests is one of those ideas that seems pragmatic on the surface, but is actually hopelessly academic and unworkable in the real world. How do you identify the “interests” you are supposed to be basing your decisions on if not by considering what you value? And how do you assess your values without taking into account your beliefs, morals and ethics?

To understand how such “realism” goes awry, consider the prominent political scientist John Mearsheimer. In March, he gave an interview to The New Yorker in which he argued that, by failing to recognize Russia’s role and interests as a great power, the US had erred greatly in its support of Ukraine.

Yet it is clear now that the Russians were the ones who erred. First, they failed to recognize that the world would see their purpose as immoral. Second, they failed to recognize how their aggression would empower Ukraine’s sense of nationhood. Third, they did not see how Europe would come to regard economic ties with Russia to be against their interests.

Nothing you can derive from military or economic statistics will give you insight into human agency. Excel sheets may not be motivated by purpose, but people are.

Strategy Is Not A Game Of Chess

Antonio Damasio, a neuroscientist who researches decision making, became intrigued when one of his patients, a highly intelligent and professionally successful man named “Elliot,” suffered from a brain lesion that impaired his ability to experience emotion. It soon became clear that Elliot was unable to make decisions..

Elliot’s prefrontal cortex, which governs the executive function, was fully intact. His memory and ability to understand events were normal as well. He was, essentially, a completely rational being with normal cognitive function, but no emotions. The problem was that although Elliot could understand all the factors that would go into making a decision, he could not weigh them. Without emotions, all options were all essentially the same.

In the real world, strategy is not a game of chess, in which we move inert pieces around a board. While we can make rational assessments about various courses of action, ultimately people have to care about the outcome. For a strategy to be meaningful, it needs to speak to people’s values, hopes, dreams and ambitions.

A leader’s role cannot be merely to plan and direct action, but must be to inspire and empower belief in a common endeavor. That’s what widens and deepens the meaningful connections that can enable genuine transformation.

— Article courtesy of the Digital Tonto blog
— Image credit: Pixabay

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Seeing the Invisible

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Seeing the Invisible

GUEST POST from Mike Shipulski

It’s relatively straightforward to tell the difference between activities that are done well and those that are done poorly. Usually sub-par activities generate visual signals to warn us of their misbehavior. A bill isn’t paid, a legal document isn’t signed or the wrong parts are put in the box. Though the specifics vary with context, the problem child causes the work product to fall off the plate and make a mess on the floor.

We have tools to diagnose the fundamental behind the symptom. We can get to root cause. We know why the plate was dropped. We know how to define the corrective action and implement the control mechanism so it doesn’t happen again. We patch up the process and we’re up and running in no time. This works well when there’s a well-defined in place, when process is asked to do what it did last time, when the inputs are the same as last time and when the outputs are measured like they were last time.

However, this linear thinking works terribly when the context changes. When the old processes are asked to do new work, the work hits the floor like last time, but the reason it hits the floor is fundamentally different. This time, it’s not that an activity was done poorly. Rather, this time there’s something missing altogether. And this time our linear-thinker toolbox won’t cut it. Sure, we’ll try with all our Six Sigma might, but we won’t get to root cause. Six Sigma, lean and best practices can fix what’s broken, but none of them can see what isn’t there.

When the context changes radically, the work changes radically. New-to-company activities are required to get the new work done. New-to-industry tools are needed to create new value. And, sometimes, new-to-world thinking is the only thing that will do. The trick isn’t to define the new activity, choose the right new tool or come up with the new thinking. The trick is to recognize there’s something missing, to recognize there’s something not there, to recognize there’s a need for something new. Whether it’s an activity, a tool or new thinking, we’ve got to learn to see what’s not there.

Now the difficult part – how to recognize there’s something missing. You may think the challenging part is to figure out what’s needed to fill the void, but it isn’t. You can’t fill a hole until you see it as a hole. And once everyone agrees there’s a hole, it’s pretty easy to buy the shovels, truck in some dirt and get after it. But if don’t expect holes, you won’t see them. Sure, you’ll break your ankle, but you won’t see the hole for what it is.

If the work is new, look for what’s missing. If the problem is new, watch out for holes. If the customer is new, there will be holes. If the solution is new, there will be more holes.

When the work is new, you will twist your ankle. And when you do, grab the shovels and start to put in place what isn’t there.

Image credit: Pixabay

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Is Your Innovation Strategy on Track?

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Is Your Innovation Strategy on Track?

GUEST POST from Stefan Lindegaard

A solid innovation strategy is key to setting your organization up for long-term success. But how do you know if you’re on the right path? Here are a few signs that your innovation strategy is sound – and some KPI/metrics tips to guide you along the way.

1. Alignment with Corporate Strategy

A strong innovation strategy doesn’t stand alone—it’s integrated with the overall corporate strategy. While innovation teams often lean more visionary, the core business balances daily execution with future growth. Finding the “sweet spot” between these perspectives helps shape an innovation strategy that is bold yet achievable.

KPI/metrics: Strategic alignment score. Are innovation initiatives aligned with overall business goals and timelines? Does the strategy push far enough to create the future, but close enough to today’s realities?

2. Clarity on Innovation Type

It’s critical to know what type of innovation your organization is pursuing. Incremental innovation? Breakthrough or radical? Or perhaps you’re aiming for “in-between” innovation – meaningful advancement without the high stakes of disruptive change.

KPI/metrics: Track innovation project distribution across types (incremental, in-between, breakthrough). Are you focusing on the sweet spot for your capabilities?

3. Understanding of Ecosystem Dynamics

In-between innovation, where companies push beyond small improvements but not into complete market disruption, often benefits from ecosystem collaboration. This means tapping into external assets and building alliances that complement internal capabilities.

KPI/metrics: Number and quality of ecosystem partnerships. How many productive partnerships are helping you access needed assets or knowledge?

Six Innovation Models by BCG

4. Balance Between Vision and Reality

The innovation team may lean toward bold, future-shaping ideas, while the core business focuses on today’s realities. A sound strategy balances both perspectives – pushing boundaries while staying feasible within current business structures.

KPI/metrics: Time-to-market for innovation projects. Are projects moving efficiently from concept to market, indicating a practical balance between vision and execution?

5. Talent and Skills Alignment

A clear innovation strategy should inform talent requirements. Are the right skills and roles in place to support the type of innovation you’re aiming for?

KPI/metrics: Skills gap analysis for innovation-related roles. Does your team have the capabilities needed to bring your strategy to life?

6. Adaptability and Resilience

Innovation doesn’t follow a straight line. A sound strategy allows for flexibility and quick pivots based on market feedback, technology shifts, and emerging opportunities.

KPI/metrics: Percentage of innovation projects adapted or redirected based on feedback. How adaptable is your team in responding to change?

Your innovation strategy should guide you in defining what’s possible, aligning with your corporate strategy, and fostering a collaborative yet grounded approach. The right KPIs help you measure progress and ensure alignment with your strategic vision.

I hope this shorter post can help spur some reflection and raise some guiding questions for your efforts and initiatives.

Image Credit: Pexels

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Three Strategies for Overcoming Change Resistance

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Three Strategies for Overcoming Change Resistance

GUEST POST from Greg Satell

Max Planck’s work in physics changed the way we were able to see the universe. Still, even he complained that “A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it.”

For most transformational efforts we need to pursue, we simply don’t have that kind of time. To drive significant change we have to overcome staunch resistance. Unfortunately, most change management strategies assume that opposition can be overcome through communication efforts that are designed to persuade.

This assumes that resistance always has a rational basis and clearly that’s not true. We all develop emotional attachments to ideas. When we feel those are threatened, it offends our dignity, identity and sense of self. If we are going to overcome our most fervent opponents we don’t need a better argument, we need a strategy. Here are three approaches that work:

Strategy 1: Designate An Internal Red Team

Resistance is never monolithic. While some people have irrational attachments based on their sense of identity and dignity, others are merely skeptical. One key difference between these two groups is that the irrational resistors rarely voice their opposition, but try to quietly sabotage change. The rational skeptics, on the other hand, are much more eager to engage.

While these are different groups, they often interact with each other behind the scenes. In many cases, it is the active, irrational opposition that is fueling the skeptics’ doubts. One useful strategy for dealing with this dynamic is to co-opt the opposition by setting up an internal red team to channel skepticism in a constructive way.

Red-teaming is a process in which an adversarial team is set up to poke holes in an operational or strategic plan. For example, red teams are used in airports and computer systems to see if they can find weaknesses in security. The military uses red teams to test battle plans. Perhaps most famously, a red team was used to help determine whether the conclusions that led to the raid on Osama bin Laden’s hideout were valid or if there was some other explanation.

Recruiting skeptics to be an internal red team provides two benefits. First, they can alert you to actual problems with your ideas, which you can then fix. Second, they not only voice their own objections, but also bring those of the irrational opposition out into the open (remember, irrational resisters rarely speak out.)

What’s key here is to make the distinction between rational skeptics and the irrational saboteurs. Engage with skeptics, leave the saboteurs to themselves.

Strategy 2: Don’t Engage And Quietly Gain Traction

Have you ever had this happen?: You’re in a meeting where things are moving slowly towards a consensus. Issues are discussed, objections raised and solutions devised. Toward the end of the meeting, just as things are shifting gears to next steps, somebody who had hardly said a word the whole time all of a sudden throws a hissy fit in the middle of the conference room and completely discredits themself.

There’s a reason why this happens. Remember saboteurs are not acting rationally. They have emotional attachments that they often can’t articulate, which is why they rarely give voice to their objections, but rather look for more discreet opportunities to derail the process. When they see things moving forward, they panic.

This doesn’t happen just in conference rooms. Those who are trying to sabotage change prefer to lurk in the background and hope they can quietly derail it. But when they see genuine progress being made, they will likely lash out, overreach and inadvertently further your cause.

This behavior is incredibly consistent. In fact, whenever I’m speaking to a group of transformation and change professionals and I describe this phenomenon to them, I always get people coming up to me afterwards. “I didn’t know that was a normal thing, I thought it was just something crazy that happened in our case!”

It’s important to resist the urge to respond to every attack. You don’t need to waste precious time and energy engaging with those who want to derail your initiative, which is more likely to frustrate and exhaust you than anything else. It’s much better to focus on empowering those who support change. Non-engagement can be a viable way to deal with opposition.

Strategy 3: Design A Dilemma Action

I once had a six-month assignment to restructure the sales and marketing operations of a troubled media company and the Sales Director was a real stumbling block. She never overtly objected, but would rather nod her head and then quietly sabotage progress. For example, she promised to hand over the clients she worked directly with to her staff, but never seemed to get around to it.

It was obvious that she intended to slow-walk everything until the six months were over and then return everything back to the way it was. As a longtime senior employee, she had considerable political capital within the organization and, because she was never directly insubordinate, creating a direct confrontation with her would be risky and unwise.

So rather than create a conflict, I designed a dilemma. I arranged with the CEO of a media buying agency for one of the salespeople to meet with a senior buyer and take over the account. The Sales Director had two choices. She could either let the meeting go ahead and lose her grip on the department or try to derail the meeting. She chose the latter and was fired for cause. Once she was gone, her mismanagement became obvious and sales shot up.

Dilemma actions have been around for at least a century. One early example was Alice Paul’s Silent Sentinels who picketed the Wilson White House with his own quotes in 1917. More recently, the tactic has been the subject of increasing academic interest. What’s becoming clear is that these actions share clear design principles that can be replicated in almost any context.

Key to the success of a dilemma action is that it is seen as a constructive act rooted in a shared value. In the case of the Sales Director, she had agreed to give up her accounts and setting up the meeting was aligned with that agreement. That’s what created the dilemma. She had to choose between violating the shared value or giving up her resistance.

How Change Really Happens

One of the biggest misconceptions about change is that it is an exercise in persuasion. Yet anyone who has ever been married or had kids knows how hard it can be to convince even a single person of something they don’t want to be convinced about. Seeking to persuade hundreds or thousands to change what they think or how they act is a tall order indeed.

The truth is that radical, transformational change is achieved when not when those who oppose it are convinced, but when they discredit themselves. It was the brutality of Bull Connor’s tactics in Birmingham that paved the way for the Civil Rights Act in 1964. It was Russia’s poisoning of Viktor Yushchenko in 2004 that set Ukraine on a different path. The passage of Proposition 8 in California created such controversy that it actually furthered the cause of same-sex marriage.

We find the same dynamic in our work with organizational transformations. Whenever you set out to make a significant impact, there will always be people who will hate the idea and seek to undermine it in ways that are dishonest, underhanded and deceptive. Once you are able to internalize that you are ready to move forward.

Through sound strategies, you can learn to leverage opposition to further your change initiative. You can co-opt those who are rationally skeptical to find flaws in your idea that can be fixed. For those who are adamantly and irrationally opposed to an initiative, there are proven strategies that help lead them to discredit themselves.

The status quo always has inertia on its side and never yields its power gracefully. The difference between successful revolutionaries and mere dreamers is that those who succeed anticipate resistance and build a plan to overcome it.

— Article courtesy of the Digital Tonto blog
— Image credit: Unsplash

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Prioritization Drives Productivity

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Prioritization Drives Productivity

GUEST POST from Mike Shipulski

If you haven’t noticed, the pace and complexity of our work is ever-increasing. There’s more to do and there are more interactions among the players and the tasks. And though there’s more need for thinking and planning, there’s less time to do it. And the answer from company leadership – more productivity.

With the traditional view of productivity, it’s do more with less. That works for a while and then it doesn’t. And when you can no longer do more, the only remaining way to improve productivity is to do less.

If you try to do all five things and get four done poorly, wouldn’t it be more productive if you tried to do only three things and did them well? None of the three would have to touched up or redone. And none of the three would occupy your emotional bandwidth because they were done well and they’re not coming back to bite you. And because you focused on three things, you spent only three things worth of energy. Your life force is conserved and when you get home you still have gas in the tank.

If you get three things done each day, you’ll accomplish more than anyone else in the company. Don’t think so? Three things per day is fifteen things per week. And if you work fifty weeks per year, three things per day is one hundred and fifty things per year. (I hope you don’t work fifty weeks per year, I chose this number because it makes the math cleaner.)

It’s not easy to get three things done per day. With meetings, email, texts and the various collaboration platforms, you have almost zero uninterrupted time. And with zero uninterrupted time, you get about zero things done. And if I have to choose between getting three things done or zero things done, I choose three. It’s difficult to allocate the time to get three things done, but it’s possible.

Three things may not seem like enough things, but three is enough. Here’s why. You don’t do just any three things, you do three important things. You choose what you want to get done and you get them done. The key is to decide which three things you’ll get done and which three hundred you won’t. To do this, take some time at the end of the day to define tomorrow’s three things. That way, first thing, you’ll get after the right three things. It’s productivity through prioritization. You’ve got to do fewer things to get more done.

And you can still deliver on large projects with the three-things-per-day method. For large projects, most, if not all, of the day’s three things should be directly related to the project. Remember the math – you can do fifteen things per week on a large project. And it works for long projects, too. Do one thing per week on the long project and you will accomplish fifty things over the course of the year. When was the last time you completed fifty things on a project?

And if you think three things is too few, that’s fine. If you want to do more than three things, you can. Just make sure you know which three you’ll complete before moving on to the fourth. But, remember, you want to leave work with some gas still in the tank so you can do three things when you get home.

Image credit: Pexels

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Performance Reviews Don’t Have to Suck

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Performance Reviews Don't Have to Suck

GUEST POST from David Burkus

Traditional annual performance reviews are confusing, dated, messy, time-consuming, and sometimes just plain inaccurate to what’s really going on in your team. As organizational psychologist Bob Sutton said, “If performance evaluations were a drug, they would not receive FDA approval. They have so many side effects, and so often fail.” According to a survey of 837 companies across the globe only about 1 in 4 companies in North America said their performance management systems were effective. And only-third of companies surveyed said their employees were evaluated fairly.

The employees and the employers have spoken.

The workplace, and work itself, has gone through some radical transformations in the past few years. It’s time performance reviews do the same. Managers don’t like evaluations because they can get confusing. It’s a hassle, and it feels like extra work on top of their existing work

Employees feel the pressure of being graded through a system that is confusing because typically it has the potential to make or break a potential raise for them. The intent of the review process—to fix problem areas, develop skills and set people up for success—breaks down into debates about what rating scales mean and the semantics of every definition.

And then there’s the time involved. On both sides of the review process, it just takes a long, long time. Adobe found that managers spent about 17 hours per employee on their performance reviews. You can interpret that amount of time two ways:

1) either managers are taking their time to thoughtfully reflect and analyze an individual’s performance and contributions over the course of a year, or 2) it’s an audacious amount of time that goes on top of regular meetings and check-ins about performance that happen naturally throughout the year.

But if you’re leaning toward the latter, trust your instincts.

How did performance reviews become so painful?

The Ranking Method, or stack ranking, or “rank and yank” was popularized by Jack Welch, the CEO of General Electric from 1981 to 2001. If you didn’t already know him as a very influential figure in corporate America, then you might recognize him as the mentor of Jack Donaguey on 30 Rock.

GE went through a massive hot streak through most of his tenure as CEO, and a lot of that success was attributed to his popularized ranking method of his employees. It worked like this:

The manager will have a list of all employees and will first choose the most valuable employee and put that name at the top. Then he or she will choose the least valuable employee and put that name at the bottom of the list. With the remaining employees, this process would be repeated.

In addition, there is a bell curve at play here. Not everyone is going to get a top rating or perfect marks, even if theoretically everyone on a team is a superstar and exceeds expectations. Under Jack Welch, in a team of 10, everyone knew only two of them would get a great rating, and at least one would get a negative rating, and possibly be…yanked.

This method or some variation of it became a norm at a lot of companies until about 2012 when more research started to come out and leaders were questioning whether the method was doing more harm than good.

Managers reported that people became obsessed with the rankings, and that it also created unhealthy, siloed competition between everyone, especially top performers. Great employees would distance themselves from other great employees out of fear they might fall in the rankings.

Great employees should be collaborating, not competing

Microsoft recently overhauled their performance review system after realizing how damaging rank-and-yank was to performance and morale. From 2000 to 2012, Microsoft’s market cap had declined from $510 billion to half of that value. Employees pointed their finger at one big reason for the nose-dive: Stack Ranking.

Turns out pitting your individual employees against one another created a culture where innovative ideas were killed, and fast. It was all about the rankings, and not about the actual work. Top performers were even ditching the company where more value was placed on the work and not just a metric.

So, Microsoft ditched the stack rankings. And a handful of other Fortune 500 companies quickly followed suit after finding the same negative effects. Motorola, Expedia, and Adobe were all yanking their rating methods in favor of more frequent, informal, focused conversations with individuals throughout the year.

Performance reviews should be an ongoing conversation

Removing the annual ritual of performance reviews and replacing them with more targeted sessions throughout the year may sound like more work, but it actually saves time. At least it did for Motorola which reported saving 50-70 percent of time spent on review processes after they ditched their once-a-year ranking method.

These check-ins don’t have to be grueling, high stakes sessions—in fact, they should be very informal. Just like the name suggests. A check-in. Schedule it sometime at the end of the month with your direct report and…check-in. The best check-ins hit on three topics: expectations, feedback, and professional growth. Don’t confuse this with just another stand-up, progress check that you usually do with your whole team.

And if you’re reading this as an individual manager, with no authority to ditch annual reviews, remember that nothing is stopping you from doing more frequent check-ins with your team. That will leave you better prepared when the annual performance review season comes up, and it will make them more willing to accept your feedback. The annual review becomes just another check-in.

Use AI, but sparingly

There is a lot of enthusiasm for AI and what it can do to make work easier. But as a leader, you should remain highly skeptical and cautious if you’re considering using AI tools in your performance review process. Pew Research came out with some recent data finding, not surprisingly, people are mixed on AI being used to monitor them in the workplace. Tracking especially.

Have AI help you figure out where to look, where to find problem areas. But AI shouldn’t be making decisions in the evaluations. Great teams are made up of humans, and when we evaluate others, we need to look them in the eye and come prepared to back up whatever we have to say, person to person. It can be an intensely vulnerable process, for both sides of the conversation. If you’re looking to bring in AI to make it easier on yourself as a manager, to take away the awkwardness you might feel when you have these conversations…you might not be cut out for being a manager.

Conclusion

The evolution from the rigid, competitive ranking systems of the past to the more flexible and supportive frameworks of today marks a significant shift in how companies view and value their employees. By focusing on development, continuous feedback, and a collaborative environment, modern businesses are paving the way for a more engaged and innovative workforce. This transformation not only enhances individual performance but also drives collective success, ensuring that the workplace remains becomes one where everyone can do their best work ever.

Image credit: Pexels

Originally published at https://davidburkus.com on August 26, 2024.

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Creative Confidence Beats Market Signals

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And How Johnny Cash Used it to Resurrect His Career

Creative Confidence Beats Market Signals

GUEST POST from Robyn Bolton

The best business advice can destroy your business. Especially when you follow it perfectly.

Just ask Johnny Cash.

After bursting onto the scene in the mid-1950s with “Folsom Prison Blues”, Cash enjoyed twenty years of tremendous success. By the 1970s, his authentic, minimalist approach had fallen out of favor.

Eager to sell records, he pivoted to songs backed by lush string arrangements, then to “country pop” to attract mainstream audiences and feed the relentless appetite of 900 radio stations programming country pop full-time.

By late 1992, Johnny Cash’s career was roadkill. Country radio had stopped playing his records, and Columbia Records, his home for 25 years, had shown him the door. At 60, he was marooned in faded casinos, playing to crowds preferring slot machines to songs.

Then he took the stage at Madison Square Garden for Bob Dylan’s 30th anniversary concert.

In the audience sat Rick Rubin, co-founder of Def Jam Recordings and uber producer behind Public Enemy, Run-DMC, and Slayer, amongst others. He watched in awe as Cash performed, seeing not a relic but raw power diluted by smart decisions.

The Stare-Down that Saved a Career

Four months later, Rubin attended Cash’s concert at The Rhythm Café in Santa Anna, California. According to Cash’s son, “When they sat down at the table, they said: ‘Hello.’ But then my dad and Rick just sat there and stared at each other for about two minutes without saying anything, as if they were sizing each other up.”

Eventually, Cash broke the silence, “What’re you gonna do with me that nobody else has done to sell records for me?”

What happened next resurrected his career.

Rubin didn’t promise record sales. He promised something more valuable: creative control and a return to Cash’s roots.

Ten years later, Cash had a Grammy, his first gold record in thirty years, and CMA Single of the Year for his cover of Nine Inch Nails’ “Hurt,” and millions in record sales.

“I wasn’t prepared for what I saw, what I had written in my diary was now superimposed on the life of this icon and sung so beautifully and emotionally. It was a reminder of what an important medium music is. Goosebumps up the spine. It really made sense. I thought: ‘What a powerful piece of art.’ I never got to meet Johnny, but I’m happy I contributed in the way I did. It wasn’t my song anymore.” — Trent Reznor

When Smart Decisions Become Fatal

Executives do exactly what Cash did. You respond to market signals. You pivot your offering when customer preferences shift and invest in emerging technologies.

All logical. All defensible to your board. All potentially fatal.

Because you risk losing what made you unique and valuable. Just as Cash lost his minimalist authenticity and became a casualty of his effort to stay relevant, your business risks losing sight of its purpose and unique value proposition.

Three Beliefs at the Core of a Comeback

So how do you avoid Cash’s initial mistake while replicating his comeback? The difference lies in three beliefs that determine whether you’ll have the creative courage to double down on what makes you valuable instead of diluting it.

Creative confidence: The belief we can think and act creatively in this moment.
Perceived value of creativity: Our perceived value of thinking and acting in new ways.
Creative risk-taking: The willingness to take the risks necessary for active change.

Cash wanted to sell records, and he:

Believed that he was capable of creativity and change.
Saw the financial and reputational value of change
Was willing to partner with a producer who refused to guarantee record sales but promised creative control and a return to his roots.

Your Answers Determine Your Outcome

Like Cash, what you, your team, and your organization believe determines how you respond to change:

Do I/we believe we can creatively solve this specific challenge we’re facing right now?
Is finding a genuinely new approach to this situation worth the effort versus sticking with proven methods?
Am I/we willing to accept the risks of pursuing a creative solution to our current challenge?”

Where there are “no’s,” there is resistance, even refusal, to change. Acknowledge it. Address it. Do the hard work of turning the No into a Yes because it’s the only way change will happen.

The Comeback Question

Cash proved that authentic change—not frantic pivoting—resurrects careers and disrupts industries. His partnership with Rubin succeeded because he answered “yes” to all three creative beliefs when it mattered most. Where are your “no’s” blocking your comeback?

Image credit: Wikimedia Commons

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Unlearning is More Important Than Learning

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Unlearning is More Important Than Learning

GUEST POST from Greg Satell

When I first went overseas to Poland in 1997, I thought I knew how the media business worked. I had some experience selling national radio time in New York and thought I could teach the Poles who, after 50 years of communism, hadn’t had much opportunity to learn how a modern ad market functioned. I was soon disappointed.

Whenever I would explain a simple principle, they would ask me, “why?” I was at a loss for an answer, because these were thought to be so obvious that nobody ever questioned them. When I thought about it though, many of the things I had learned as immutable laws were merely conventions that had built up over time.

As I traveled to more countries I found that even basic market functions, such as TV buying, varied enormously from place to place. I would come to realize that there wasn’t one “right” way to run a business but innumerable ways things could work. It was then that I began to understand the power of unlearning. It is, in fact, a key skill for the next era of innovation.

The One “True” Way To Innovate?

Innovation has become like a religion in business today, with “innovate or die” as its mantra. Much like televangelists preaching the prosperity gospel to gullible rubes, there’s no shortage of innovation gurus that claim to have discovered the secret to breakthrough innovation and are willing to share it with you, for an exorbitant fee, of course.

What I learned researching my book Mapping Innovation, however, is that there is no one “true” path to innovation. In fact, if you look at companies like IBM, Google and Amazon, although they are all world-class innovators, each goes about it very differently. IBM focuses on grand challenges that can take decades to solve, Google integrates a portfolio of innovation strategies and Amazon has embedded a customer obsession deep within its culture and practice.

What I found most interesting was that most people defined innovation in terms of how they’d been successful in the past, or in the case of self-described gurus, what they’d seen and heard to be successful. By pointing to case studies, they could “prove” that their way was indeed the “right” way. In effect, they believed that what they experienced was all there is.

Yet as I’ve explained in Harvard Business Review, innovation is really about finding novel solutions to important problems and there are as many ways to innovate as there are different types of problems to solve. Many organizations expect the next problem they need to solve to be like the last one. Inevitably, they end up spinning their wheels.

The Survival Of The Fittest?

The survival of the fittest is a thoroughly misunderstood concept. Although it arose out of Darwin’s work, it did not originate from him. It was coined by Herbert Spencer to connect Darwin’s work to his own ideas. Darwin’s theory was so novel and powerful at the time, it was difficult to articulate it clearly, and the phrase caught on.

All too often, people assume that Darwin’s theories predicted some sort of teleological end state in which one optimized form will dominate. If that were true, then the optimal strategy for every organism, as well as every business model and every organization, would be to strive to achieve that optimal state and dominate the competition.

Yet that’s not what Darwin meant at all. In fact, his theory rested on three pillars, limited resources, changing environments and super-fecundity, which is the tendency of organisms to produce more offspring that can survive. “Fittest” refers to a temporary state, not a permanent advantage. What is “fit” for one environment may be detrimental in another.

Eastern Europe was, for me, similar to the Galápagos Islands where Darwin first formed his famous theory. Seeing different business environments, in close proximity, give rise to so many different business models opened my eyes to new possibilities. Once I unlearned what I thought I knew, I was able to learn more than I could have imagined.

Turning The Page On Welchism

At the beginning of this century, Fortune magazine proclaimed Jack Welch to be the optimal manager of the last one. American industry had grown sclerotic and bureaucratic. It was in great need of some trimming down and Welch was truly an optimized fit for the environment.

Nicknamed “Neutron Jack” for his penchant of getting rid of all the people and only leaving the buildings standing, he voraciously cut through GE’s red tape. Profits soared, Welch became something of a prophet and “Welchism” a religion. Corporate boards heavily recruited GE executives as CEOs to replicate Welchism at their companies.

Yet as David Gelles explains in his book about Welch’s tenure at GE, The Man Who Broke Capitalism, not all was as it seemed. Yes, Welch made GE more efficient and profitable, but he also increased risk through “financializing” the industrial company, undermined engineering and innovation by moving manufacturing facilities overseas and cooked the books to make profits seem much smoother than they were.

GE would eventually implode, but the damage went much further and deeper than one company. Because Welchism was seen as the “one best way” to run a business, many other firms replicated its methods. The results have been alarming. In fact, a 2020 report by the Federal Reserve found that business dynamism in America has steadily declined since Jack Welch took the helm at GE in 1981.

Clearly we have some unlearning to do.

Moving Boldly Into An Uncertain Future

I’ve thought for some time that the 2020s would look a lot like the 1920s. That was the last time that we had such a convergence of technological, demographic and political forces at one time (and a pandemic as well!). Yet historical analogies can often be misleading. History is long and, if you look enough, you can find an analogy for almost anything.

It is certainly true that history seems to converge and cascade on particular moments and we seem to be at one of these moments now. We will need to unlearn much of what we thought we knew about shareholder value and other things as well. Yet correcting the mistakes of the past is never enough. We need to create anew.

The recently passed CHIPS Act is a good model for how to do this. Much of the $280 billion bill goes to tried and true programs that we under-invested in recent years, such as science programs at the NSF and the DOE as well as programs that support manufacturing and, of course, subsidies to support semiconductors. We know these things work.

Yet other programs are experiments. Some, such as a new Technology Directorate at the NSF are controversial. Others, such as $10 billion that will be spent on regional technology hubs and $1 billion that will go to a RECOMPETE pilot program to empower distressed communities, are new and innovative. We can almost guarantee that there will be hiccups and outright failures along the way.

It is tautologically true that the well-trod path will take us nowhere new. We need to unlearn the past if we are to learn how to build a new future.

— Article courtesy of the Digital Tonto blog
— Image credit: Unsplash

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Strategizing Execution

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Take a Tip from the Oil Industry

Strategizing Execution

GUEST POST from Geoffrey A. Moore

When it comes to executing any market development playbook, the work should be organized around the same checklist of factors that structured our earlier blog on marketing strategy. Here is the overall framework to keep in mind:

The first four focus on constructing the ROI engine, the second four, on activating it. Or, to use the parlance of the oil industry, the first four represent the upstream work that locates and extracts the trapped value of an oil reservoir. This is the work of product management. The second four represent the downstream work of refining, distributing, and monetizing the end product. This is the work of product marketing. Both functions should report to a product line manager to ensure that end-to-end coordination is maintained throughout.

When a category is working its way through the Technology Adoption Life Cycle, the roles of the product manager and the product marketing manager change dramatically at each stage. In the early market, neither function has yet been staffed, as it is simply too early to organize for scaled deployment, but for the following three phases of the bowling alley, the tornado, and Main Street, these two functions lead the charge.

For the upstream product manager, here’s how the market development playbook evolves:

In the bowling alley, as we discussed at length in the earlier post on market power, the trapped value is due to a broken mission-critical process that needs substantial re-engineering only made possible by next-generation technology. The product manager needs to become an expert in this use case, and their role calls for them to both guide the product development roadmap and orchestrate the ecosystem to ensure the right partners show up at the right time.

In the tornado, trapped value has migrated from specific use cases to a whole host of potential applications. As a result, demand is widespread, infrastructure owners have budget for the new category and plan to spend it this year, and the goal is to win as much market share as one can. Product roadmaps are driven by feature competitions with others in category, and time to market with the next hot feature is the top concern. Partner recruitment now shifts to the sales side of the house where the goal is to win more market share by expanding distribution coverage beyond the limits of the direct sales force. The product manager supports this effort by driving a “partner-ready” track in the product development roadmap.

On Main Street, the “trapped value” is less like an oil reservoir and more like shale oil—it’s still there, but it is highly diffuse, collecting in small local pockets. Here the end user is in the best position to advocate for the improvements that would help most. Budgets are limited, however, so improvements need to be add-ons that are discretionary, ideally available through a digital-direct transaction.

Turning now to the downstream side of the market development checklist, here’s how the product marketing manager’s playbook evolves:

In the bowling alley, sales plays are consultative, organized around a diagnostic/prescriptive approach which the product marketing manager must continually update as more and more is learned about the problem process and how to fix it. The sales channel is direct, and the pricing is value-based, calibrated by the cost impact of not fixing the problem process. The offer competes with the status quo and the incumbent vendor who will push back with the best “good enough” response it can muster. The positioning has to make clear why that does not fill the bill and how the disruptive offer will take the problem off the table once and for all.

Inside the tornado, sales plays are competitive, organized around battle cards that are competitor-specific, which the product marketing manager must continually update to reflect the latest releases from the competition. Pricing is organized around company status in the market pecking order. Where there is proprietary technology involved, the gorilla sets the premium price for the category overall, chimps can set local pricing in their market segments if they are sufficiently differentiated to keep the gorilla out, and monkeys license or clone the gorilla technology and then compete on lowest price. Where there is no proprietary technology to create a barrier to entry, the same pecking order emerges, but it is much more fluid, meaning that it is much easier for a prince to depose a king than it is for a chimp to displace a gorilla. In all cases, competitions tend to get resolved via product versus product comparisons on features and benefits.

On Main Street, sales plays are transactional, ideally delivered through a digital self-service channel. Here the product marketing manager normally cannot rely on sending prospects to the corporate website—it is typically way too noisy a channel for this body of work—but instead either spin up a separate portal or work with a third-party digital distributor. Pricing and packaging matters a ton in any transactional business model, so the product marketing manager is responsible for frequent A/B testing or comparable experimentation on an ongoing basis. The competition is rarely direct—you are the incumbent vendor at this stage—but you must keep an eye out for the next-generation disruptor who sees your profit pool as a sitting duck. The more you can bolster your core offer with add-ons, the higher the switching costs for your end users, the less likely the challenger can penetrate your market.

Wrapping up

This concludes the sixth and final post in the Hierarchy of Powers series. Here are the links to the other five:

Framing Strategy

Strategizing Category Power: Portfolio Management

Strategizing Company Power: It’s a Team Sport

Strategizing Market Power: Target Market Initiatives

Strategizing Offer Power: The Importance of Overcommitting

I encourage you to print them out and staple them together as a reference guide to keep handy as you take on your next market development challenge.

That’s what I think. What do you think?

Image Credit: Unsplash, Geoffrey Moore

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Goals Require Belief to be Achievable

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Goals Require Belief to be Achievable

GUEST POST from Mike Shipulski

I’m all for stretch goals to help people grow. “Hey, you did this last year but I think you can do ten percent more this year. And here’s why – [list three reasons here.]” This works. This helps people grow. This is effective. This is grounded in what happened last year. This is grounded in specific reasons why you think the stretch goal is possible. And when you do it this way, you are seen as credible.

Back in the day, when elite runners were running the mile in 4:04 their coaches said “Hey, you ran 4:04 last year but I think you can do it a little faster this year. I think you can run it in 3:59. And here’s why – your time has been decreasing steadily over the last three years, you have been working out with weights and you’re much stronger and there’s a small adjustment we can make to your stride that will help you be more efficient.

As an athlete, I believe this coach. It’s true, I did run 4:04 last year. It’s true, my time has decreased steadily over the last years. It’s true, I have been working hard in the weight room. And, because all these things are true, I believe the coach when she tells me she knows a way to help me run faster. This coach is credible and I will work hard for her.

Back in the day, when elite runners were running the mile in 4:04, their coaches did NOT say “Hey, as a stretch goal, I want you to run 2:59 next year. I know it’s a big improvement, but I want to set an arbitrary and unrealistic goal so I can get the most out of you. And no, I don’t have any advice on how you can run 27% faster than last year. As the one doing the running, that’s your job. I’m just the coach.”

As an athlete, I don’t believe this coach. There’s no way in hell I will run 27% faster this year. It’s simply not physically possible. The world record is 4:01 and I can’t break it by over a minute. The coach has no clue about how I can achieve the goal, nor did he build a bridge from last year’s pace to this silly target. This coach is not credible and I will not work hard for him.

As a leader you are credible when you set an improvement goal that’s grounded in the reality of how things have gone in the past. And you’re more credible when you give specific reasons why you think the improvement goal is possible. And you’re more credible when you give suggestions on how to achieve the goal. And you’re even more credible when you tell people you will actively support them in the improvement effort. When you do it this way, people think better of you and they’ll work hard for you.

Here’s a rule: if the goal isn’t believable it’s not achievable.

As a leader, when you set an improvement goal that’s out of line with reality you are NOT credible. When you declare an improvement goal that’s disrespectful of history, it’s not a stretch goal. It’s an arbitrary edict designed to trick people into working too hard. And everyone can spot these “goals” at twenty paces. Your best people will give you the courtesy of calling you on your disingenuous behavior, but most people will just smile and quietly think less of you. And none of them will work hard for you.

When the improvement goal isn’t credible, neither are you. Think twice before you ask your people to drink the company Kool-Aid.

Image credit: Gemini

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