Why it helps to put things off until later

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What would you do if you had five minutes to chop down a tree?

An experienced person would spend the first two and a half minutes sharpening his or her axe.

Putting things off is a form of laziness – isn’t it?

How many people do we know that are too busy working on their work to spend any time thinking about their work.

How many business owners are working so hard in the business that they have no time to work on the business.

Most of us are trying to create value – to be useful in some way.

Our abilities to think, reason and create help us write books, solve problems, design structures and do myriad other things.

But we don’t arrive at the end result in a nice, linear way – starting by creating a plan and following it until we succeed.

There are often a few detours along the way, strange encounters and experiences that inform and infuse what we do.

Let’s say we have a task to do. Just putting it off for a while and doing something else doesn’t mean that the task has been forgotten.

Instead our brains put the idea on the back burner, simmering away.

In that period between being aware of the task and doing work on it, the brain beavers away and pulls out connections, thoughts, associations and extrapolations that would not have been available had we just started working.

We might even stumble over something new. An idea from a different discipline or an unrelated activity may be the perfect thing to use in our situation.

Procrastination – the act of delaying something – may in fact be one of the most useful skills we have.

Taking the time to sharpen an axe might mean that we can do the job better and faster.

Taking the time to think might mean that we see something new – come up with a radically different idea or result.

We throw our ideas into the air and, like a paper plane, they come to rest somewhere new and unexpected.

And that’s more interesting than just getting on with the way things are done right now.

How to think about your business model in the digital age

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Every industry is being transformed by digital technologies in front of us right now.

The overlay of information and abstraction onto the products and services we use every day creates new experiences, expectations and possibilities.

While we see and talk about this often in the context of entertainment, advertising, social media and mobile technology the industries that feed, move and power us – agriculture, transportation, utilities among others – are also being transformed.

So, how can we think about this changing environment and where we fit into it?

Professor Venkat Venkatraman is the David J McGrath Jr Professor of Management and the Chairman, IS Department at the Boston University Questrom School of Business and writes about the interface between strategic management and digital technology.

His book, The Digital Matrix: New Rules for Business Transformation Through Technology, explores the kinds of companies that play in this changing business landscape, what changes and transformations they will experience and the strategic moves they can make to win.

Venkatraman says in an interview with Antoine Abou-Samra that we often use two main ways to think about situations.

First, we look at successful companies and see what they did and the lessons they might have for us.

Or second, we look at new technologies such as Blockchain or digital tracking and imagine the implications they might have for us.

Venkatraman argues what is needed is to have a framework that can be used to understand the players and the actions they might take, and use that to inform and position ourselves strategically.

An interesting framework that can be used to understand which business model we are using in the digital age is shown in the picture above, adapted from this summary.

Traditionally, we think about the business we are in and whether we provide a product or a service.

This single focus on ourselves and what we do has been how business has been done for a long time. We make something – a product – or we help someone get from one point to another – a service.

Products are developed in the office while services are provided to customers.

Digital extends this simple matrix upwards to turn us from a small village of trades to a global market for anything we want.

Two new types of models emerge in this space.

Platforms aggregate and put forward options we can select from and Solutions address complex and ‘wicked’ problems that we face.

This is an elegant and simple approach to thinking about what our business model needs to be in this new world.

Do we provide a product, a service, a platform or a solution?

What the Terminator has to say about success

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Arnold Schwarzenegger, bodybuilder, actor and Governer talks about success in this video, where he sets out five rules to follow.

Schwarzenegger is inseparable from his role as the Terminator, a cybernetic android assassin, which made his career as an actor.

In the video, Schwarzenegger talks about how all the things that would seem to be barriers to success, the characteristics that would appear to be disadvantages, actually turned out to be unique and distinctive features of his performance and character.

For example, growing up in post-war Austria, he had a vision, a dream to be a bodybuilder – and he worked on making that dream a reality every day.

That was a very specific dream, and one that required a precise and focused set of activities to make happen, but the principle can be applied to any endeavour, whether our dream is to be a chef or a computer programmer.

The next rule was to think big. He didn’t want to just be a body builder – he wanted to be the best in the world. He didn’t want to just be an actor, he wanted to go to Hollywood and be a star.

All too often, we compromise – we settle for less because we don’t believe we can get what we want.

And the fact is that for every Schwarzenegger that made it, there are countless bodybuilders who didn’t get there as well.

In today’s economy, however, compromise seems to be a bad strategy. Winners take all in a network economy, and the people and organisations that succeed are the ones that refuse to compromise themselves.

Which leads to the third rule – ignore naysayers.

There will always be people who will delight in pointing out all the ways in which we can fail, perhaps some that will even give us a little push into the abyss.

We need to seek out a network that has similar goals and aspirations, that is supportive of what we are doing and can help us get on, rather than give up.

And we need that drive and support to keep going. The fourth rule is to work like hell.

Many people work during work time, and then stop. The people that go further are the ones that work longer and harder and better.

There is billable time and non-billable time. Often, what makes it possible to have billable time is everything we do during non-billable time – the extra effort to create and meet people and build capability.

The final rule Schwarzenegger has is to give something back.

A responsibility, a duty many successful people have is to give back to the society and world that has helped them succeed.

Many successful people are portrayed as greedy rentiers.

The thing is that it is likely that more people became successful by being good at what they did, giving more value than they took and building long lasting successful partnerships with others than by stealing or swindling their way to the top.

These people give back – because they got what they had in the first place by giving more than they took.

It’s easy to assume that a character like the Terminator has little of value to say to us.

That would be a mistake – because he does keep coming back.

How to tell whether you act like a startup or a big business

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What is the difference between a startup and an established business? Is a startup simply a small company – a small version of a big company or are they fundamentally different?

Steve Blank thinks so.

Steve is the author of Four steps to the epiphany and writes extensively about startups, their characteristics and the strategies they follow.

Among these characteristics are three crucial ones – and successful startups do these very differently from big companies.

The first characteristic has to do with what they do.

Big companies are good at execution.

They create a vision, agree a mission, set goals and targets, allocate resources and set the machine in motion.

All the parts of the company work in a hierarchy, following what they are programmed to do to head towards the targets they have set.

A startup, on the other hand, searches for opportunities.

It has its eyes wide open, scanning the environment for signs that something is missing, someplace where it can add value through innovating, adapting and creating something new and different.

The second characteristic has to do with how companies do what they do.

The purpose of a company, according to Drucker, is to create a customer.

Big companies already have customers or believe they know what a customer wants – either because they know the market or because they have done studies of some kind.

This means that they can sit at their desks and get on with creating product following their usual process, which is some form of plan-do.

A plan-do approach means that we follow a structured approach to developing a product – starting with understanding requirements, gathering information, developing the product and finally shipping it to customers.

Startups recognise that no plan survives first contact with the enemy.

Instead, they follow a test-learn approach.

This means getting out of the building, going and finding potential customers and talking to them about what they need and testing whether what they say they need matches what our product does.

This matching exercise – sometimes called validation – tells us if we are on the right track or whether we need to change something.

As Gary Halbert wrote, what we need to succeed is a starving crowd – a group of people that are desperate, starving for a particular product or service.

Lastly, the two approach who they recruit differently.

Big companies have lots of roles that they fill with specialists.

A specialist is someone who is good at one thing – sales, marketing, operations.

They do what they do well and competently, but they often don’t have the capacity or ability to do more than they can with their two hands.

Startups need generalists, people comfortable with doing everything and with the ability to do much much more with very little.

Startups eventually want to become big companies, so will recruit specialists, but only later on when the product is more mature and its time to scale up.

In summary, the way to tell whether we act like a startup or an established corporate is to look hard at what we do, how we do it and who we recruit.

Why we need to have a story

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Stories are how we make sense of things.

Whether we are coming up with a personal narrative or working on a company brand, we use stories to show and tell other people what we are all about.

Sequence is key to a story.

We link together human beings, actions, events and experiences to create a narrative that has a beginning, a middle and an end.

This is something we do all the time. To some extent, we don’t remember the past so much as recreate it through the lens of story.

We pick the events, actions and experiences that support and confirm what we want to believe, welding them together and trying out story arcs until we find one that fits.

Herminia Ibarra, in her book Working Identity: Unconventional strategies for reinventing your career, writes about this as putting a frame around experience – looking at what is happening now and what happened in the past and linking the two through story.

But it’s important to recognise that the things happening now and the things in the past are both being interpreted and reinterpreted – history is written by the victors.

I’ve written here about the kinds of stories we tell, and how we can structure success and failure stories.

Why is it important to have a story – whether personal or for a business?

Ibarra writes that it is only through a story that we can really get to know someone.

The story – the narrative – gives unity, purpose and meaning to their lives.

Whether we are trying to understand ourselves, someone else or an organisation, the stories we hear and tell bring things alive and create a sense of connection that it’s impossible to get in any other way.

Stories also help us step back and see the bigger picture.

As we tell and retell them, picking out events and experiences to recite, we start to create a narrative that seems more real and robust over time, until the story we tell is how it happened.

Which is why the reaction to many a fantastical story is often “Is it true?”.

Things happen.

When we’re in the middle of things, we look for a defining moment, a period where everything becomes clear and comes into focus.

All too often, however, we recreate that moment as we look back at the past and realize that it was one – the turning point of the story we are telling – and how it fits into our lives so far.

And so, to explain who and what we are, we need to have a story.

Is what we do good or bad and how can we tell?

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There’s a video floating around on Twitter that shows Elon Musk and other technology leaders slamming MBAs and saying that they don’t hire them.

Do they have a point?

Sumantra Ghoshal, in a paper titled Bad management theories are destroying good management practices, sets out an argument that business schools are doing more bad than good when it comes to teaching their students about how organisations should work in the real world.

Then again, practical people who think that they are different from academics in their ivory towers need to remember the words of Keynes, who wrote Practical men, who believe themselves to be quite exempt from any intellectual influences are usually the slaves of some defunct economist.

Ideas and theory have more power than many realise.

Ghoshal argues that academics working in management suffer from physics envy.

The physical sciences have been able to come up with theories that explain how things work around us very well.

When can all roll a ball down an inclined plane and see how its speed increases over time to understand the principles behind acceleration.

Social scientists, looking over the fence, have tried to come up with similar principles to explain human behaviour.

So, for example, they come up with assumptions like the only purpose of a business is to make as much profit for their shareholders as possible and that people will only work when supervised.

Ghoshal calls these assumptions gloomy – and points out that they lead to claims pretending to be truth based on selective analysis.

In physics just claiming that something works in a particular way doesn’t make it true.

In social systems it can – the feedback between ideas, practice and reinforcement can make a bad idea real enough to believe as truth.

Take, for example, the idea that people will only work in their own interests – managers are agents in the principal-agent theory.

This means that to get managers to behave there must be more independent directors on boards, power sharing between a CEO and chair and stock-option based compensation.

But Ghoshal points to studies that show that none of these seem to have any correlation with corporate performance, yet we continue to believe they will have an effect.

There are many examples of where management theory leads to flawed practice – we only need to read Warren Buffett’s letters to find examples.

Running a business is more like being a detective than being a scientist.

We have to look for clues to see what’s going on.

What are the risks to look out for in 2018?

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We’re very good at managing conventional risk that can be isolated but don’t know how to deal with risks in complex, interconnected systems such as society and the environment, that can lead to the danger of a runaway collapse or an abrupt transition to a new normal.

That is the view of the World Economic Forum (WEF) in its Global Risks Report 2018.

The good news is that we aren’t likely to be annihilated – it looks like weapons of mass destruction are under control.

The two areas that stand out are extreme weather as a result of climate change and the changing cybersecurity landscape.

The Paris Agreement was a major step towards global consensus on taking action on climate change, with nearly all countries making national plans to address global warming, that starts in 2020.

Which brings to mind a quote by Mark Feldman and Michael Spratt…

Five frogs are sitting on a log. Four decide to jump off. How many are left? Answer: 5. Why? Because there’s a difference between deciding and doing

Tackling environmental issues is one of the most difficult challenges we face. There are many views that range from support to opposition, while all the time biodiversity shrinks and pollution increases.

We’re seeing the impact of this in more and more extreme weather, from hurricanes to droughts – and the question is whether society will respond in the right way in time.

Which leads us to geopolitics and an increasing trend towards nationalism and self-interest.

Populist politics coupled with protectionism increases mistrust between nation states, and the increasing rhetoric results in overt and covert action being taken between countries.

Cybersecurity is one such area, where attackers motivated by money play in the same space as government agencies looking to test and penetrate other countries.

The UK set up the National Cyber Security Centre in response which includes a policy of Active Cyber Defence (ACD) that takes down bad websites, maintains lists of good sites and “do things to demotivate our adversaries in ways that only GCHQ can do”

We’re all going to have to get much better at protecting ourselves online, because we’re going to get hit at some point.

The WEF thinks that the risk of an energy price shock is low.

That makes sense, given that we are awash in gas and plummeting renewables prices. There is still a big job to upgrade the infrastructure to deal with an electrified heating and transport system, but there is plenty of commodity out there.

Which hasn’t stopped prices bouncing up over the last two years, however, and the continuing geopolitical uncertainty may support them for longer.

So what should we do?

The basics – scan the horizon, assess the risks and make crisis plans.

For example, what would we do if our servers went down today or our employees couldn’t enter the country?

We need to be prepared for a range of outcomes.

How to become better at innovative problem solving

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Brian Tracy, in one of his talks to a small audience, begins by saying that he took the time before he came in to read a brief biography of everyone in the room and memorize their photos and job titles.

He looks around and people start to shift in their seats nervously. He points to a person and says, “Your title is Problem Solver”. Another is Chief Problem Solver. Yet another is a Vice President of Problem Solving.

Everyone’s job is to solve problems – the things that turn up day after day and cause big and little issues.

So, how do we normally approach problem solving and how can we get better at it?

The traditional approach when we have a problem is to treat it as something that is just our own – it’s my problem.

We get started working on it and face a brick wall. All the issues, complexities, computations and knowledge gaps emerge.

Eventually, we keep working on it and break through to a solution. Our solution.

That didn’t seem like a sensible approach to the Soviet inventor Genrich Altshuller, who came up with a theory of inventive problem solving, abbreviated as TRIZ.

Altshuller reviewed a number of patents and identified ideas that popped up again and again in innovations and found that around 40 principles could account for nearly all inventive ideas.

Take, for example, flexible films, foils and membranes. These approaches underpin relatively recent innovations such as solar PV coatings, energy generating floor tiles and a coating that makes objects super strong.

TRIZ’s starting point was to solve physical challenges. For example, there are often physical contradictions that limit systems.

These can be resolved by applying principles such as:

  • Time: Schedule differently
  • Space: Separate them
  • Condition: Have the system meet requirements under different conditions
  • Alternative/Structure: Spread contradictions across the structure

The TRIZ approach is little known – it’s not mentioned in the standard textbooks at an MBA level – perhaps because of its origins and issues with translations.

The Internet makes it easy to find this stuff now though. The TRIZ journal has a useful summary of the method, including an example, and says there are over 2 million analyses backing the method spanning fields from aerospace to human resources.

TRIZ is a simple but potentially transformative approach to problem solving.

All too often, we think that we need to start from scratch and work something out.

A systematic approach to using the world’s knowledge could be much more effective, especially now that we have the Internet.

Using it effectively just means that we need to start by retraining ourselves to follow the less traditional route.

How economics explains success in the modern world

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Steven Landsburg introduced his book “The armchair economist” with the words Most of economics can be summarized in four words: “People respond to incentives.” The rest is commentary.

That is the start of economic analysis. Supply and demand curves. p is for supply, q is for demand and they have a linear relationship.

In standard economics, demand (q) rises as price (p) decreases – and that is one of the first charts we learn in an economics class.

This assumes that people are rational, evaluating the costs and benefits of options in a logical way and taking actions that maximise their profit or utility – the satisfaction we get from a purchase.

But people aren’t rational. In reality, we are driven by emotion and our animal brains and this is where behavioural economics comes in.

For example, under pressure, we go into flight or fight mode and make decisions based on gut instinct – and that is what has kept our species alive.

Another way in which people aren’t rational is how they react to an unfair deal.

Take, for example, a game where people get a sum of money. One person gets to decide the share of the prize – and the other can accept or reject the offer.

In theory, any amount more than zero should be accepted by the rational recipient. In practice, many don’t accept anything less than a share closer to a fair one – a 50/50 split.

Shown as a chart, this might mean that demand is fixed at a range of prices, but over a particular level it increases.

The factors affecting the shift in mentality are more subtle – they are affected by the emotional processing that goes on inside our heads.

Then we have network economics. In this view, what we do depends on what others do – we watch and copy behaviour.

This is most visible in online behaviour. The top three results on Google get virtually all the traffic. There can be huge differences in views for very similar videos.

So, in network economics, price has little effect until we reach a tipping point, after which demand increases rapidly – but the tipping point is determined by the network effect.

The charts in the picture may not describe the situation accurately – real life is more complex than we can show in this way – but the interesting point is the impact it has for the choices we make as producers and consumers.

As producers, we can’t simply make better mousetraps cheaper and expect people to buy them.

Instead, we need to create cheaper products, think about how people will react emotionally to what we are selling and leverage the economics of networks to get our products to scale.

As consumers, we need to be mindful that price is no longer representative of value in many cases – so we need to be wary of using that as a heuristic or rule of thumb.

We also need to realize that producers use increasingly sophisticated techniques to appeal to our emotions, from subtle emotional cues to overt use of celebrity endorsements.

Finally, by copying what everyone else is doing, we may be missing out much that has real value and settling for the fads of the moment.

But, the changing world also offers unparalleled opportunities for those who are positioned where the three economic approaches overlap.

In the middle there, with a little bit of luck, new superstars emerge.

What day is it?

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Jeff Bezos of Amazon has a philosphy that he shares with the Securities and Exchange Commission (SEC), and his shareholders.

Every day is Day 1

In his 1997 letter to shareholders, Bezos wrote that this is Day 1 for the Internet, adding that Amazon’s hopes were to create an enduring franchise, extend its market leadership position and take decisions to create long-term shareholder value.

In 2016, the Day 1 message remains unchanged.

Day 2 is statis, he writes, followed by irrelevance, decline and death.

So, what does staying in Day 1 mean?

The picture is a model of Bezos’ 2016 letter which sets out a starter pack of essentials to stave off Day 2.

It starts with an obsessive desire to delight customers, which leads us to try and make things better for them.

This drives us to invent new capabilities and functions on their behalf to make things quicker and easier for them.

Companies that have this kind of focus rely on outcomes – do customers love this and does that show up in market share growth – rather than proxies such as focus groups that show a mild preference between options.

In Day 2 companies, the process is more important than the outcome – everyone is crouching below the parapet.

Powerful trends are sweeping along the corridors of industry.

From artificial intelligence (AI) to nanotechnology, the way in which we do things will be changed by new technology.

Amazon is embracing trends such as AI and machine intelligence to deploy algorithms that make its supply chain and customer experience systems more effective.

Much of this is invisible and quietly but meaningfully improves core operations.

Things just work – and customers are happy.

Many companies, even large, established ones, do not know which strategy will work out of a number of options.

Many companies default to the opinion of the highest paid person – which is okay in some cases, but most of the time we are better off taking decisions fast and experimenting.

Bezos’ uses the term disagree and commit – when we’re not sure give people permission to have a go rather than shutting down an approach just because we think it won’t work.

Finally, and this is something we must have all experienced, it’s easy for approaches to get misaligned.

If groups of people have fundamentally differing views, for example making a choice between doing a service in-house or outsourcing it, then no amount of arguing can resolve this.

It needs to be kicked upstairs, escalated to a team that can make the decision and make it stick, correcting misalignment quickly.

The Day 1 approach appears to have kept Amazon lean and focused despite now being a huge and dominant player.

It also worked for them when they were starting up and small – and perhaps it’s a model that many other firms can use as well.

Time to take a step back from Day 2 to Day 1, in that case.