Category: Strategy

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How to become more intentional

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What does it mean to be intentional?

Google to the rescue. It means to be deliberate, to do on purpose, to be purposeful.

That is a teleolgical concept – an attempt to explain something in terms of its relationship with a goal or final end point.

So, being intentional is, in a sense, being purpose driven, or goal driven.

How does knowing that help us?

There are three things, at least, that we need to think about when trying to be intentional.

The first is that we can’t do everything – we have to choose.

Students are often told when going to University that they have a choice of three things: sport, a social life and their studies.

If they are going to excel and be at the very top, they need to pick two to focus on.

We have to decide which two are most important to us and make those our primary activities.

Even if we aren’t planning to perform at an elite level, we still have to make choices between reading and watching telly, between going out late partying and staying up late working on a business.

The second thing is that we have to develop routines.

Willpower is a hard and tiring way to organise our lives.

Routines are better. If we set and keep appointments with ourselves every day to do the things that are important then, over time, we will see results.

We don’t have to set hard to achieve targets. We just need to do the minimum every day and it will build up over time.

As the saying goes, people overestimate what they can do in a year and underestimate what is possible in ten years.

The third thing is that we have to know how we will respond when we stumble.

And stumble we will. We may want to do something – work on a book, lose weight, make sales calls – and there will be times that we just don’t have what takes to do it.

There’s no point getting upset about that – it’s going to happen so we might as well deal with it.

As W.C Fields said, if at first you don’t succeed, try, try again. Then quit. There’s no point being a damn fool about it.

With some things it’s hard to keep going – especially when our intention is to overcome routines we have created earlier, like overeating or smoking.

The thing about stumbling is to follow the if-then rule. If something doesn’t go the way we wanted, then what are we going to do next?

Do we want to get to an end or get balance?

An intentional approach suggests that there is an end – a place we can get to where everything is all right.

At the same time, we may only realise we have arrived when we don’t feel the need to go elsewhere – the end is where we are right now.

That’s another choice we need to make.

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How to be more focused in life and work

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We’d all like to be more focused.

At the same time, there is an industry that specialises in hijacking our brains and hooking us (and our children).

How are we going to win?

It turns out that we can focus on the things that we want to focus on – a so called top down approach – when we want to.

At the same time, our focus can be drawn automatically to distractions – or bottom up signals – like notifications on mobile phones.

So, is there anything we can do to get better at focusing on what we want to rather than being victims of our devices and environments?

According to Edward M. Hallowell, the author of Driven to distraction at work: How to focus and be more productive, there are five things we need to do.

Manage our energy

Scott Adams, the creator of Dilbert, writes that we should manage our creativity, not our time.

People who manage their creativity get happy and rich.

People who manage their time get tired.

Substitute energy for creativity and we get the same message – the more energy we have, the more creative and productive we can be.

Many people make a big fuss about how hard they work. In this day and age, however, is that the smart thing to do?

Manage our emotion

How we feel affects how we work.

A high stress environment or managers that use blame and threats to get work out of people isn’t going to make us feel good.

And feeling good – or even more fundamentally – feeling safe – is crucial for us to be able to do good work.

If we want people to produce, we have to give them room to experiment, to fail and to learn.

No one gets it right the first time. If it looks like they do, the chances are that they are just very good at hiding it when things go wrong.

Be more engaged

We’ll do things more happily when we’re engaged – when we like what we do.

That seems obvious – but the fact is that we’re all good at different things. Some of us like working with people. Others like solving problems.

What’s important is looking out for the tasks that help us get into flow, where we can lose ourselves in the work and we finish with more energy than when we started.

If the work drains us, or the people around us drain us, then it’s time to look at what else we can do.

Be more structured

Routines help.

They help by reducing the amount of thinking we need to do, freeing up time for more creative and important work.

Some people take this to extremes – wearing just black, for example. That cuts down decision making on what colour to wear.

Routines also create habits. If we have a routine where we start or end the day with creative work and do the administration in the middle, then every day we are going to get a little further.

Learn to take back control

This is the hardest one for many of us to learn.

We’re too eager to please – to say yes.

Life is all about goals.

As Brian Tracy says, either we’re working to achieve our goals or we’re working to achieve someone else’s goals.

We really need to focus on reaching our own goals.

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Why cities and businesses benefit from clustering

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It’s easy to assume that if we had no competition, business would be great.

It turns out, however, that we are much better off being near competitors than far away – and this is because of the benefits of clustering.

Four benefits in particular stand out.

The first is access to talent More companies in a region means a greater need for people with relevant skills. This may drive up prices for talent and attract people from elsewhere.

Alternatively, a company may spawn a host of related businesses set up by ex-employees.

One of the most famous examples of this happening is the traitorous eight, employees who left Shockley Laboratories to found Fairchild Semiconductor.

Fairchild Semiconductor in turn led to birth of Silicon Valley and the creation of several companies, including Intel, founded by Gordon Moore (of Moore’s law) and Robert Noyce from the original eight.

Proximity leads to productivity When we have competitors operating close by we watch them carefully and try to match what they are doing and keep up or stay ahead in the market.

This sense of competition means that we’re always trying to become better – to become more productive.

In a global economy anything that is seen as a commodity sees margins fall the virtually nothing.

The only way we can make money is by doing more better with the things that go into our business – and that means being more productive.

At the same time, we want our local economies to succeed – we have common interests Businesses don’t start and stop quickly. They take time and effort and investment.

If we work on something for a while we’d like it to be sustainable and endure.

In addition, when the local economy does well, everyone does well. For example the value of the houses we own goes up. There are more jobs, and our children don’t have to move cities or countries to find work.

So, working together to make our local economies grow makes perfect sense.

Although we can work with anyone anywhere, we still like face-to-face Finally, we can hire people from anywhere. But our competitive advantages may lie in what is available closer to home.

We need a local touch to tap into the ecosystem around us – and this is still best done with face-to-face contact and a personal connection with others.

That’s when we realise that there are other people that are in the same position as us, and yet more that have gone through a similar process before and can share their knowledge and insights with us.

To benefit from an ecosystem we must invest the time to become part of the ecosystem.

It’s give and get, not just come and take.

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How to show why your product is valuable to a customer

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As product developers, we need to ask ourselves early and often whether what we are creating has any value to a customer.

There seems to be a belief that anything can be sold, no matter how rubbish it is.

That may only be the case in movies or in urban myths about salespeople – it’s not what we see in real life.

The action of buying and selling is so fundamental to human society that it cannot be based on anything other than the transfer of value from one person to another to be sustainable.

So, how should we approach the act of understanding the potential for value, creating it and communicating it to a customer?

Geoffrey Moore in Crossing the Chasm has a model that we can use to think our way through this as illustrated in the diagram.

We start looping round the model with FOR.

There are customers out there for our product, and there is everyone else. We are focused on creating something for our potential customers.

The quickest way to failure is to try and please everyone, so we need to be laser focused on the set of people that could buy what we have to offer.

The next stop in the model is WHO.

Only some customers need our product right now. The others may later, or may already be using something else.

The customers who are effectively thrashing about in the water and are in danger of drowning are the ones that we should focus on.

So then we move onto THE.

The product, that is. Our product may be a inflated rubber tube attached to a rope, or a heavy duty iron bar.

That may be how we think of our product – as a set of features and attributes. Our products were created using specific things and perform in a certain way.

Customers don’t care…

What they are concerned about is the next step in the model – the IS A.

Our product is a lifebuoy. Or an anchor. One is clearly a more appropriate one to throw to the person in the water.

Because of what happens in the next step – THAT.

The lifebuoy is something that the person can hang onto until being rescued.

The final part of the model is UNLIKE.

This is an important step that is often missed.

We might have lifebuoy to hand. We might also have a life jacket.

Which one would we throw into the water?

Both will float, but the lifebuoy is clearly easier to hold onto and float, unlike the life jacket.

If we can put all these elements together in a simple statement, we will be able to say why our product is valuable to a customer.

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What is the difference between strategy and tactics – and how do goals and objectives fit in?

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We often hear the words strategy and tactics, usually closely followed by goals and objectives. Is there a consistent way in which we can use them when thinking about a situation?

A good starting point is Liz Ryan’s story about how an old boss defined strategy as how to get out of the woods.

Thinking about a situation like being lost in deep woods is a good analogy for a problem we have to solve.

We know we need to get out but we can’t see very far ahead – so what are we going to do?

Jeremiah Owyang writes about strategy being done above the shoulders and tactics being done below them.

Strategies are about options. Tactics are about actions.

Before we delve into that – Mikal E. Belicove reminds us of the GOST model – Goals, Objectives, Strategies and Tactics.

A goal is somewhere we want to be – like an X on a map that marks where treasure is hidden.

An objective is something we can attain – a specific something – like getting hold of a ship.

A strategy, then, is to evaluate the options we have and select the ones with the greatest chance of success.

Strategies and tactics are linked – head and hands working together.

We decide that we will go a certain way, and that means we must do specific things in order to succeed.

Is it any use trying to get these words straight – will it help us in any way?

Yes. All too often, we see what others do and think that the way for us to succeed is to do the same things.

But, all we are seeing in action are their tactics. We don’t understand the strategy that led to the selection of those tactics.

All too often the ways that worked for others will not work in the same way for us.

Steve Jobs, for example, was apparently a tyrannical perfectionist whose near obsessive character built Apple into what it is today.

Should a modern CEO therefore cultivate a tyrannical, perfectionist and obsessive character?

Most would and should hesitate at the idea.

The classic quote about strategy and tactics is from Sun Tzu, who wrote Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

Strategy and tactics must be intertwined and executed in context. Some strategies work better than others depending on the environment.

If we’re large, we should use overwhelming force. If we’re small we should move quickly and be hard to catch.

We’ve got to find a strategy that is right for us – and then select and execute tactics that will help us win.

It’s really that simple. But that doesn’t mean it’s easy.

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What is the optimum size of team or group you can manage?

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How big should a team be? Is there a right size that can be managed effectively or a recommended approach that works for organisations?

To come up with an answer we need to look at what the organisation does and where it is in its lifecycle to come up with a model that works in its particular situation.

The starting point is to look at effectiveness.

The military has a history of requiring teams to effective – lethally so.

The smallest unit in the Roman army had 8 soldiers led by an officer and with two support troops.

The equivalent in a modern army is a squad, with 7 to 12 soldiers, although a smaller sub-team known as a fireteam with 4 or fewer members is the smallest cohesive unit.

The word cohesive is important here – as the team needs to work together and be cohesive to be effective.

Success as a whole depends on the coordinated use of cohesive teams and this is as true in military operations as it is in business or the public sector.

The next thing to look at is management

We sometimes think that teams work for their managers – a good manager can get better performance out of the team.

An alternative view is that people in cohesive and well performing teams are more likely to work to support each other and avoid failing in their role than they are to please a manager.

A manager’s role, in that case, may be more about coaching and helping a team to bond than about telling them what to do and how to do it.

That suggests that hierarchy is necessary to scale how people work.

Each team that actually does something should have between 4 and 8 people.

Fewer than that may mean they don’t have all the skills they need to be effective, while more than that means coordination becomes a problem.

Above the coal face – where things are done – we need structures that enable coordination and communication.

Technology can help here – but face to face communication can help in a way that emails and phone calls can’t.

The size of management groups will therefore depend on how much time leaders have to talk and meet with their team. If they spend every day communicating, then they can have more direct reports.

They might also want to do some work, however, and perhaps having more than 7 or so people looking for time with them will eat into that.

Finally, we should consider the phase of growth the company is in.

George Bradt, the co-author of First-Time Leader, writing in Forbes describes how to think about teams during different growth phases.

He shares the story of Devanshi Garg and the approach taken by Icreon Tech when entering the U.S.

In the beginning, Garg suggests, we need a team made up of people that think like founders – partners who can do many things, adapt to situations and solve client problems.

Later, as we grow to more than 10 people, we need to think of our company as an extended family. We know most people and how they work.

Over 30 people, we need hierarchy – developing leaders and supporting them with effective management systems.

In the end is there a magic number?

I’d go with Michael Lopp’s formula. Seven plus or minus three.

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What is the most important model for a B2B CEO or MD to know?

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There is one business book that Steve Jobs said deeply influenced him – The Innovator’s Dilemma by Clayton M. Christensen.

Here’s what happens with a company. The founders have an idea and create a product of a service. In the beginning the product has some core functionality and some users take it – perhaps its cheap and does the main things they need it to do.

This is the low end of the market – where adequate performance is just fine.

Over time, the founders improve the product and build the company. There are more people, more iterations of the product and it gets better and better and just climbs up the S-curve of performance.

At some point, the product satisfies the needs of virtually all its customers – even the ones demanding high end performance and superior quality.

The company is now established, has lots of customers, is profitable and seems to dominate its space.

What are the founders doing now?

Perhaps they’ve been replaced by executives and have retired to a beach somewhere.

The execs come in with suits and briefcases and do what the company does best. The double down on the products that are doing well creating even more capability and features.

The only companies that can afford their high end tools are the large, established ones. The little customers aren’t attractive anymore.

The market doesn’t really need these whizz bangy things but, well, the execs might as well keep going and offer more options.

Along the way, they might create some new tech or capability, but its not really that interesting to customers and doesn’t get attention or resources – everyone’s focus is on the main earners.

Some of the people working on this other cool stuff get dejected and think about leaving and starting out on their own.

They ditch the suits, come to work in t-shirts and shorts, perhaps on a skateboard, and get on developing the tech that the large company rejected in a new startup.

This new tech is newer, probably faster, cheaper, easier to maintain and so costs much less than the older, more established technology of the incumbent.

The suits are going to find that they are standing at the edge of a precipice – they just don’t know it yet.

The startup tech is adopted by the low end of the market. In its new, unrefined form it does what is needed by these customers and starts building market share.

Soon, its climbing a new S-curve.

Finally, the suits look down in horror and see that the startup has hoovered up all the small customers they have been ignoring.

It’s now too late to create competing technology. Perhaps they can buy the startup and survive that way. Or else that’s it – they’re now walking dead and business is moving wholesale to the new company.

This disruptive cycle is the dilemma faced by the innovator.

We often think that companies go out of business because they fail to innovate.

According to Christensen, that’s not the case. The incumbents do their core business really well. They don’t invest in their fringe ideas because the return on investment isn’t proven – and they make sensible asset allocation decisions in proven markets and technologies.

Those perfectly sensible actions allow the startup to take root, grow and eventually disrupt the incumbent’s market.

A B2B CEO or MD needs to know which S-curve their company is on – the incumbent’s or the startup’s – and where it stands on the slope.

They need to know that before doing anything else.

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What we should learn from the golden arches

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I watched The Founder last night – the story of how Ray Kroc took McDonalds nationwide and created the phenomenal company that now operates across the world selling burgers.

The film is emotive – showing how Kroc tried to work with the McDonald brothers to grow a fantastic new idea but then, after being frustrated with the way in which they didn’t embrace his vision, was shown that he had been thinking about his business all wrong.

He wasn’t in the hamburger business, he was told. He was in the real estate business.

The way in which Kroc wrested control of McDonalds from the founders was by realising that the value of the business lay in the land under it rather than the burgers that were cooked on the land.

Owning the land gave him control – he could control what was done on his land.

This is the same insight that Steven Levitt and Stephen Dubner explore in Freakonomics. The landholder gets the value – a great brand selling in a great location has to pay more to be sited there – so the landholder gets to charge more.

The other thing that Kroc saw was the brand.

All across America, as he travelled, he saw crosses and flags, crosses and flags.

They signified America – a god fearing, law abiding country – a country for families and wholesomeness and apple pie.

His vision was to see McDonalds as a brand for America – with the golden arches just as iconic as the cross and the flag.

That was the insight that made him – a 52 year old salesman – who was able to see how a brand for a restaurant could convey just as much meaning and signify all that felt good for people at that time in that place.

The film shows other points. Kroc worked harder and longer than anyone else. He had human frailties. He was misunderstood and mocked.

Which goes back to the old saying – first they ignore you, then they laugh at you, then they fear you and then you win.

Kroc is shown listening to motivational tapes – the kind that we still can get and listen to today that extol the value of persistence.

Talent is not enough. Genius is not enough.

Persistence is what matters – when the going gets tough the tough get going and all that kind of guff.

At the end its all still complex.

Kroc built an empire – and in the film he’s pictured as someone who wanted to win at all costs, someone who wanted to crush competitors and have it all.

But the point is that he saw something that no one else did in the same way then.

He saw just how much people yearn for meaning – the golden arches mean something – a place of safety and sanctuary for families.

And that’s why they just keep coming.

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Is there a difference between an expert and a beginner?

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Adam Fisher of Soros Fund Management says in Tim Ferriss’ book Tribe of Mentors that finding an area of expertise is a bad idea. Just learn how to learn and we can figure things out.

That’s an interesting thought – because we become experts by getting to know almost all there is about something.

How do we do that?

We study and we practice.

When we are experts – when we know something, then we’ll come up with adaptations on existing ideas and even our own original ideas.

On this… all too often people say that everything has already been written. There is nothing new under the sun.

But we’re discovering new things all the time. New species, new places, new ways of understanding how our brains work.

So, how do we learn?

We study and we practice.

We take in ideas, think about them, let them take root and grow in our minds.

Perhaps the problem is that we are looking for signs. Looking for validation.

If we appear to be experts – if the world accepts that we are experts – then does that make us expert?

Is it our expertise that shines through? Or are other people just so good as coming across as expert that they fool the rest of us?

What is the point of all this?

The point is that there is a difference between what is and what appears to be.

When we start learning something new – we don’t have to pretend to know it – we can be open and take in ideas and just learn.

When we have many years of practice behind us – we don’t have to pretend that we know – we can be open and share our ideas.

It’s the bit in between that can get us – the part where we have learned enough to be dangerous and think we know, but not where we know how much we still have to learn.

It’s very Zen. Before Zen, mountains are mountains. Then mountains are not mountains. And then, mountains are once again mountains.

It’s just going to take time to get it.

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What managers can learn from pilots

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Charlie Munger, the Vice-Chairman of Berkshire Hathaway, has strong views on picking the best ideas from different disciplines and use them to become better at what we do.

In Poor Charlie’s Almanack, a collection of Munger’s writing and speeches, he talks about broadscale and narrowscale professionals and how the former can learn from the latter.

Broadscale problems are ones that can only be solved by using ideas from more than one discipline.

Take management, for example. Good managers need to understand accounting, psychology, economics, technology, logistics among other skills.

It is possible to be an expert in just one area, like engineering, but if we don’t understand how accountants think we’ll find it hard to explain what we are trying to do to them.

The thing is that focusing on a specialist area – narrowscale thinking – is how we get to be very good at something.

But, one of the criticisms of academia is that the system forces people to know more and more about less and less – and so the insights that emerge can be hard to apply in practice.

Munger suggests that one solution to developing broadscale knowledge is to find the best elements of narrowscale education and then scale them up and suggests looking at pilot training as an example of the best kind of approach.

He talks about how pilots are trained in a strict six-element system.

The starting point is formal training. We need to have a broad knowledge of practically everything that is useful to fly a plane.

How often are managers formally trained in management methods before being put into a management role? That’s an investment more organisations need to make.

Training alone isn’t enough. We need to practice until we are fluent at what we are trying to do.

It’s one thing learning about economics. Being able to model supply and demand to maximise total revenue is a different thing. Hint – we should almost always raise prices…

We also think a lot about what we want to do – goals we want to reach. This focus is good, but we also need to think about what not to do, the things we should avoid.

Then we need to spend more time on the things that are more important. That might seem obvious – but how often are we distracted by things that take a lot of time but have little to no impact.

Pilots are trained to always use checklists. And they are better at it than doctors – leading to the quip that this is because doctors are involved while pilots are committed. Doctors who have pilot experience must have an advantage…

Finally, just because we’ve done a course doesn’t mean we know all there is to know – we need to maintain knowledge over time, with more lessons and more practice.

Pilots are required to spend a certain amount of time flying to maintain their license. All professionals need to spend time on continuous professional development – but do we?

A lecturer of ours once said that when we graduated we would have a Masters in business administration. That did not mean we were masters of business administration.

Not yet anyway.