Taking Action Once Risk Becomes Real

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Risks are easiest to spot once things go wrong.

We’ve in the middle of a heatwave.

Schools are shutting. Hospitals are cancelling procedures.

People can’t attend an event set up to talk about climate because trains can’t run in this heat.

For the last ten years we’ve focused on what impact we have on the climate – our Scope 1, 2 and 3 emissions.

There’s been less focus on what the changing climate has on our businesses and ways of living, but that’s been raised over the last few years as climate-related disruptions have increased.

But now we’re being forced to look at and re-evaluate how we run our businesses.

What will you do if the weather stops your business operating?

The first sign that we’re losing a safety net is when we can’t get insurance – not in certain areas exposed to flood risk and buildings exposed to fire risk.

Our job now is to build safety nets as we fall, before the ground rises up to meet us.

It’s when risk gets real that we finally start doing something about it.

The Best Businesses Have Narrow Sales Funnels

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Eleven years ago, Neil Rackham spoke at my university on how the very best companies approached sales.

Rackham, in case you don’t know, authored “Spin Selling” and is a leading researcher in sales science and consultative selling.

He argued that it’s not the number of opportunities that matter. It’s having a very narrow sales funnel.

Here’s why.

  1. The more opportunities a salesperson has, the safer they feel.
  2. Salespeople look for easy wins, not strategic wins.
  3. The cost of sales is rising in consultative sales.

This means you can spend a lot of money on salespeople that look like they’re being active, without getting a return.

Picture a golf course. This way of approaching sales is like loading a cannon with golf balls and firing at the green.

Hopefully some will go in.

But a better approach is to swing at one ball, and over a few shots, guide it to the hole.

Maybe that’s why cannon golf never took off.

Sales is no longer a numbers game.

It’s a value game, fewer shots but higher returns.

The Physics and Psychology Of Business

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It takes a knowledge of both physics and psychology to make a difference in business.

The problem isn’t that we don’t know how to solve a problem.

It’s that we can’t agree on how to get started.

Take climate change, for example.

We know that there are only a few real levers we can pull.

We can use less. We can substitute with better. We can get better at quantifying the impact of different options to inform better decisions.

The physics of change is often quite straightforward.

The real blocker isn’t technology – it’s the way we make choices.

It’s the psychology of change that’s hard to get right.

Many companies feel stuck, recognising the need to take action but worrying about the impact on finances, and the wider political and legal risks.

There isn’t a simple solution – a magic bullet.

Instead, it’s a considered course of action, a reasoned, debated strategy that sets a direction for the business.

It’s getting the mental models aligned, recognising apples as apples, oranges as oranges, and agreeing what to do next.

When it comes to change physics explains the how.

But psychology agrees the why.

How AI Changes What Delivers Competitive Advantage

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In sports, the faster you are the more likely it is you’ll get to the ball first.

The faster you get the job done at work, the more likely it is you’ll get more work, and get ahead.

Speed delivers competitive advantage.

But AI is changing that.

A year or so ago, I was busy building code so that an AI could provide tailor-made responses based on my data, rather than its general model.

I tried it with clients. It was a bit clunky but worked. I got there early with the idea.

A few days ago, the same task was a one-click job. Add an agent. Job done.

AI is like those moving walkways at an airport. You can sprint along on the ground, but others on the walkway will catch up with you with less effort.

But in a world of low-cost accessible AI, we’re competing with others with the same levels of access, which means no one gets ahead.

If I make something today with AI, you can copy it tomorrow using AI.

The new source of competitive advantage is making things that can’t be copied.

Your relationships. Your experiences. Your reach. Your particular ways of working.

Today, it’s not about getting there first.

It’s getting somewhere that no one else can.

The Problem With Boiling Frogs And Burning Platforms

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Imagine a frog in cold water, and a person on a platform.

We’re told that a frog will jump out of a pan of boiling water, but sit there and cook if the heat is gradually increased.

We’re also told that people need to be on a burning platform before they will change their minds.

Both these theories, while vivid, aren’t much help in the real world.

A frog, I hear, will simply jump out if it gets uncomfortable.

And most people will avoid getting on a platform in the first place, or get off it as soon as possible if there is a problem.

In the real world, people don’t stand around waiting for the world to happen to them.

They’re usually taking some action – moving somewhere else, reframing the narrative, finding an excuse, coming up with a new idea.

Real-world change deals with dynamic, ever changing situations, not static systems.

A better approach is to imagine someone purposefully moving towards their particular vision of the future.

What matters is asking whether they’re heading in the right direction.

If not, then what course should they follow instead?

Focus On Sales And Engineering, Rather Than Innovation And Marketing

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AI is changing how we structure businesses to create value.

Drucker focused on marketing and innovation, but I think we’re in a time where that’s not sharp enough.

We need to move closer to sales or engineering.

For example, wth any service there’s an overhead in training the teams that need to do the work.

There’s documentation, guidance, step through videos.

In the past, I’d set up systems of work that ran to several pages. It took us weeks to set everything up and then run training programmes.

Now, you can record yourself talking through what needs to be done with teams. Gen AI can create guidance documents from that transcript that are 90% there. We can use text to voice and add screencasts to create training videos.

It now takes a few days to put something together.

One model of an organisation is a small core, surrounded by a large bureaucracy, which in turn is surrounded by a marketing layer.

Gen AI tools shrink the bureaucratic middle, bringing sales and engineering closer together.

Pick A Tool – Then Get Good At Using It

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It’s not the tool you select that matters, it’s how you use it in practice.

Creative people think a lot about tools.

And I think service and process designers do creative work, because we’re interested in making useful things.

But, to make useful things we have to understand what our clients really need.

The literature is full of different methods to do this. Workshops, questionnaires, prompts and facilitation techniques.

The thing we eventually learn is that there isn’t any one perfect technique that will work for everyone.

Taking writing, for example. Some people write on a computer, others draft longhand, some write from start to finish, others in pieces that they put together later.

What matters is not how you write, but what you produce – the thing that you ship.

You can write with a crayon on tissue paper as long as you produce the words.

Don’t look for a perfect tool. Pick the one that works for you.

And then get really good at using it.

Quality In Knowledge Work

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Five years ago I reluctantly took my books on quality to a charity shop to make space during a renovation.

They were designed to help teams improve physical processes – but I needed to know how to fix knowledge processes.

While physical problems show up in inventory and rework, knowledge problems hide until you see someone burn out.

I have lost count of the number of people who tell me they work in jobs moving information from one place to another using inefficient systems riddled with errors – and who put pressure on themselves to get things right in a system that’s wrong.

And the problem is usually the system – not the people.

Take sustainability data reporting, for example.

It’s a simple task. Find source information on what you’re doing that has a carbon impact, roll it up and report to an auditable standard.

That doesn’t mean it’s easy.

There are a number of steps to follow. But if there’s a gap, if a step is missing or broken, it stops you advancing.

Asking people to work harder won’t fix things.

Quality in this kind of system is a two-way process.

First, you have to move the information from where it is to where it needs to be, without messing up.

Then you have to be able to trace it back to where it came from – so that it’s auditable.

And because every situation and company is different you need a flexible and adaptable approach rather than a single system and way of doing things.

Quality in a physical process is about doing things the same way – reducing variation.

Quality in knowledge work is about building systems to do things the right way – that are appropriate for the complexity of the situation you’re trying to handle.

And I knew that needed different books and techniques.

The 3P Model: Power, Purpose and Process

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We have to focus on what matters most for the level at which we’re operating.

Power gives leaders leverage.

They negotiate and bargain with each other to secure power and resources for what they wish to achieve.

Process makes the difference when it comes to delivery.

The job is to constantly improve how the work is done.

Purpose connects power to process.

The job of the managers in the middle is to get things aligned – to take purposeful action.

Deciding what to do, how to do it, and what resources are needed.

Power sets the course. Process delivers the power.

Purpose ensures that we’re doing the right things in the right way, for the right reasons.

Try Not To Be Misunderstood

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The problem with communication is not about being understood – it’s about not being misunderstood.

Ten years ago, I set myself a goal to write a million words to throw away.

The plan was to think, write and publish. Day after day. Get the stuff out, hit the target.

It was written to help me write – not to help a reader read.

It’s easy to write. But it’s also easy to be misunderstood.

Being in the same room doesn’t mean we’re having the same conversation.

The same pattern shows up elsewhere.

Software projects fail because teams interpret requirements differently.

Employees become misaligned when expectations are unclear.

Strategies fail because people leave meetings with different understandings of what was agreed.

Getting on the same page is the easiest thing to overlook – and the thing most likely to cause problems later.

Alignment comes from a shared understanding of what good looks like.