Are you focused on the right thing?

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How do we decide where to spend our time – as individuals and organisations?

A quote often misattributed to Albert Einstein says “If you judge a fish by its ability to climb a tree, it will spend its whole life believing it is stupid”.

The quote is intended to be used in an educational context – to remind us that children may be innately better at some capabilities than others and so they should learn in the way that works best for them.

The counter to this is that the point of education is to learn and that comes through practice and sustained effort.

A fish has evolved to survive in a particular environment with every aspect of its function optimised for the things it needs to do to stay alive.

We humans, on the other hand, have a capability for learning.

At any given time, however, the capabilities we have are a function of the learning activities we have engaged in, either through interest or because it was what we had to do to survive.

It’s unlikely that any of us grew up dreaming of being good at constructing spreadsheets – but that’s where we might have ended up.

In organisations the collection of individual talents, efforts and skills results in the emergence of organisational capability – what the organisation can do as a whole.

Today, the capabilities of many organisations, especially service based ones, are inseparable from the individuals involved.

If someone leaves, a part of that capability goes with them. People are no longer interchangeable cogs in an organisational machine.

This creates a dilemma when it comes to answering the question in the title, both for individuals and organisations.

Should we focus on our core talents – doubling down and spending time just on those aspects of work that we are best at and compete on our strengths.

Or should we be exploring the areas we are not so good at yet, looking to develop our capabilities and expand our horizons?

It is, after all, a fundamental issue, as a traditional economic assessment would suggest that we should plan and allocate our scarce resources on the activities that will result in the highest net return.

But, who really makes a living allocating resources based on an economic assessment?

The answer for us, perhaps, is to have a go at the opportunities out there and see what works.

We may end up finding new and interesting trees to climb.

How to avoid a life full of regret

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Bronnie Ware spent eight years working as a nurse in palliative care with people who had gone home to die and spent time with them during the last three to twelve weeks of their lives.

In her memoir, The Top 5 Regrets of the Dying, she talks writes about the themes that emerged from conversations with them and expanded on the most common ones.

We live our lives surrounded by expectations and sometimes lose sight of the things that really matter to us.

It’s easy to follow a career path for good practical reasons, but then end up wishing one had the courage to do what one had really wanted.

The book reminds us that our lives are made up of choices, and we need to experience it when we have the ability to still make those choices.

When we lose our health, for example, many choices are curtailed – and we may not realise what we have lost until we no longer have it.

Many people wished they hadn’t worked so hard – certainly from every male patient.

Perhaps when you do what you enjoy, it feels less like work.

Work is clearly important – but we may have less regret at the end if we get the balance right.

Many of us suppress our feelings – either to get on with others or because we don’t have the courage to say how we feel.

Being able to do that either makes things better, or closes the chapter on an unhealthy relationship.

Whatever happens, we’re better off.

Perhaps before the age of the internet, many people regretted losing touch with their friends.

With the internet, perhaps we can’t lose track of them, but we still need to spend time with them.

In the end, according to Bonnie, it’s only the relationships that remain in the final weeks.

Finally – many people did not realize that being happy was a choice until it was too late.

Patterns and habits built up over years can get in the way of just letting ourselves be happy.

In the end, whether we have regrets or not depends on the choices we make throughout life.

Why we need to understand psychological contracts

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What makes it possible for people to work together and create value?

For starters, a relationship needs to be created between them.

The most obvious kind that we have around us is an employer-employee relationship in organisations.

In that context, the term Psychological Contract is what the people entering that relationship see as the contract between them, rather than the actual written contract they have signed.

But, you can see this everywhere where interaction happens between people.

For example, a psychological contract exists between us and our children, between us and a search engine like google, between us and a place that serves coffee like Starbucks.

So, how can we model the idea of a psychological contract and use it for good?

The picture above is an adaptation of a framework published by David Guest in 2004.

The basic concept is that any relationship involves promises and expectations on both sides.

For example, an employer promises to pay us and we promise to do work for them. We expect to get paid and they expect us to do work.

These promises and expectations are combined into a deal, which may be very different in the participants minds than what is down on paper.

Fairness in how that deal is implemented by both parties leads to trust.

Then, the level of trust leads to attitudes and behaviour.

If the deal is not implemented fairly, then trust is eroded, people become demotivated and start to produce less and act up more.

If the deal is implemented fairly, trust is increased, people are happier and more productive.

The same basic model can be applied widely.

For example, many years ago, we visited Vienna. We needed food and to use the facilities, so we went to a McDonalds, figuring that it would be the same everywhere and we’d get both there.

We ordered food and then went to use the facilities. It turned out we had to pay.

If we had used the facilities first, then our payment would have been taken off the bill.

As we had already eaten, that wasn’t an option. McDonalds in Vienna, however, refused to refund the charge.

We had a psychological deal with McDonalds – to be treated the same the world over – and this was unfair.

Unsurprisingly, we left with a negative impression of McDonalds and Vienna, with trust eroded and a memory of an experience that has lasted many years.

The psychological contract also underpins how we interact with websites.

When we go to search on google, we expect a search box and a thought-provoking doodle.

We also expect to find what we are searching for, with a balance of advertised and organic content.

But that may no longer be the case – Seth Godin wrote in 2013 about how companies like google change from wanting to create value for customers to creating value for shareholders.

We may live in a world where we sign contracts all the time – take all the software ones that we sign without reading such as when Apple brings out an upgrade on the iPhone.

At the end, however, the only contracts that matter are psychological.

How to write a business playbook

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In sports, a playbook describes plays, a preset plan of action.

It’s a number of moves – a strategy – to move a team into the right places to score.

A playbook is not a woolly wishlist – it’s practical, tactical stuff.

So, how can a business playbook help us be more effective?

Let’s take a very simple example and draw out the most basic business operation possible in a consulting firm.

In basketball playbooks, the court has a number of zones and a basket.

Offensive players are denoted with a O and defensive players with an X.

Lets start with an engagement – a practice lead (O1) enagages with a customer contact (X1).

O1 dribbles the ball (the wavy red line), starting the conversation.

What this very first interaction reminds us is that X1 is not the target.

The target is to be useful – to solve a problem, make money, save money and so on.

That is the basket we are heading for at the end of the court.

When X1 and O1 have decided that there is some merit in this and worked out a problem they would like to solve together (identified the basket), the practice lead passes to an operations lead (O2).

The pass is shown by a line with two slashes. Quite often, people just assume others should know what to do, but a playbook shows that a clear pass is needed, perhaps with an update meeting or formal handover.

X1 may also involve other stakeholders, X2 and X3. O2 now needs to dribble towards the stakeholder team and come up with specific work packages and deliverables.

Finally O2 passes to a consultant or analyst (O3) that does the work, shoots and scores.

Drawing the play in this way also brings out a few other aspects.

O3 needs to deliver the work quickly.

The player is in the 3-second area, and you can’t linger in there. Get things done fast and the customer will appreciate it.

O1 is stood in the three point area.

It might be possible to shoot from there, but its a long shot. Instead, it makes sense to do the play and get closer to the basket.

In other words, rather than guessing and trying to make a quick decision, engaging and understanding the client’s requirements is more useful.

In some cases, we might be offered a free throw – a chance to prove ourselves – with a demo or a pilot piece of work.

We need to put the best player on there to try and make the shot.

It’s interesting how, with just a few components, one can draw out a fairly complex business interaction and make the crucial elements clear.

For example, how many projects have you seen where not having a clear handover or pass meant that requirements weren’t understood and it took longer?

How many times have you seen players going for the long shot when actually getting closer to the basket may have delivered the project?

Running a business is less about wishes and more about action oriented plays with our teams – and those are the things that need to go in a playbook.

How did this happen?

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We often want to know how something happened – what was the story behind it?

This approach to looking the world is powerful because it takes everything that happened and puts it into a sequence.

Most storytellers, as a result, follow a linear format – like unrolling a carpet.

First, this happened. Then that. And so, this happened in the end.

Even if you don’t know the ending, it’s going to happen one thing at a time. History is what happens, tomorrow.

This kind of thinking is also dangerous.

It leads us to think that things can only happen in the way they happened.

The extreme version of this is a complete belief in fatalism – the belief that all events are predetermined and inevitable.

This is almost never the case.

It is tempting to think that success for some people was inevitable. For every Zuckerberg and Facebook, however, there are people with similar ambitions, resources and opportunities who didn’t make it.

With hindsight, all the moves that he made were obvious. Anyone could have done it. Except they didn’t.

Taking an issue that has had a much greater impact for longer, the economist reports on a dispute between historians and economists, where there is disagreement how to look at slavery in the American economy and its impact on the industrial revolution.

A historic view might say slavery was important in the industrial revolution – it clearly happened, and therefore had an impact.

An economist might argue that because slavery happened, it does not mean it needed to happen. The industrial revolution would probably have happened anyway, just with different methods – for example with more mechanisation.

History describes what happened – it’s a story.

Just because it happened the way it did, however, it doesn’t mean it was the best way for it to happen, or that alternatives at the time were more expensive or unlikely.

To really understand something, it’s not enough to look at what happened.

We also need to look at the counterfactual – what did not happen, or what was not the case.

What’s your story?

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In his book One Up on Wall Street the investor Peter Lynch writes about six stories one can associate with companies.

Every investor wants a ten-bagger, a company that shoots up and multiplies their investment many times over.

Fast growers are usually small or are building a completely new market, which lets them get bigger fast.

They might have the potential to grow 20-25% a year or more for a number of years.

Stalwarts are larger companies, with a profitable market and room to build business.

They might double in a while – say five years.

Slow growers are the established companies that have pretty saturated markets.

They may grow at a little more than the growth rate of the economy as a whole.

Cyclicals experience the ups and downs of business cycles.

Commodities and shipping, for example, tend to go through cycles of oversupply and reduced investment followed by lack of supply and increased investment that makes the price of their products, and therefore their earnings, go up and down.

Turnarounds are opportunities where new management, new owners or a change in the environment make a previously unprofitable or failing company viable.

On the other hand, they might never grow at all – or have to change radically to remain relevant. Textile mills, for example, might move from cotton products to increasingly high-tech fibres now.

Asset opportunities are companies that have value hidden in places the market misses.

If that value then comes to light later, it should result in a rapid increase in valuation for the company.

Peter Lynch came up with these categories a number of years ago and used them mostly to select listed companies for a stock portfolio.

They are, however, fairly universal patterns and can be applied to a number of circumstances.

Take a career or a startup project for example.

Is it slow growing or fast growing? Is someone working on a project that, when realised, will skyrocket their value?

The point is that the story you tell will decide the investment you get.

A very simple model for innovators

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Once upon a time you needed to be a big company, with research and marketing departments and lots of money in order to find out what people wanted and give it to them.

That’s not the case any more.

The big companies that sat between creators and consumers are disappearing, as the internet makes it easier for people who want a thing to find the people who make that thing.

But, we still have barriers in many places.

Take innovation inside an organisation, for example.

If someone wants to improve a process or a particular way of doing things – can they just do it, or do they need to go through other people first?

How many layers are involved? Does IT need to install the software needed? Does a manager need to approve time to work on the idea?

Approval processes and managers rarely come up with cool new things. IT departments, which should be enablers, often become blockers.

People messing about with ideas and trying to make them work do.

There is a very simple test to see if an innovation has potential.

And that is – does someone else want it?

Whether we’re trying to improve an excel application, create a new product for our customer base or set up a new startup – if we make a thing that someone else wants, then we’re on the track to somewhere.

Will we make any money?

Possibly – perhaps not in the way many people think.

New revenue models are popping up all the time. For creators, Jack Conte created Patreon, a platform that allows people that make stuff to get paid through membership subscriptions.

He did that because money from adverts on platforms like YouTube were plummeting.

So.. if someone wants the thing you make, there is probably a way to make money from it.

At YCombinator, the startup incubator, this idea has become a mantra.

Make something people want. Don’t worry too much about making money.

How to negotiate in a principled way

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Getting to Yes: Negotiating an agreement without giving in is the classic text on negotiation by Roger Fisher and William Ury, setting out an approach to something many of us do all the time.

Good agreements should be fair, wise, efficient and capable of lasting.

Many negotiators, however, start with a position – such as price and get ready to bargain.

This tends to be confrontational – imagine that this is like trench warfare, where you dig in for the long haul and try to wear the other side down.

That hasn’t really worked out well in the past.

An alternative, set out by Fisher and Ury, is the idea of principled negotiation – set out as four principles to follow.

1. Separate people from problems

All too often, negotiators identify too closely with the problems they are trying to resolve and take things personally.

Winning or losing a point becomes about personal victory or failure.

We have all experienced the person that refuses to back down even when they are wrong. Sometimes we are that person.

The first step is to try and step back, untangle the personalities from the issues at hand, acknowledge and respond to the emotions swirling around us and use words carefully, listening actively and using language designed not to provocate while trying to see the other person’s point of view.

2. Focus on interests, not positions

A position is a decision. An interest, however, is the thing that led us to taking that position.

Our interests need to be put on the table, discussed and understood. A useful visual tool for this is a compare and contrast diagram, as shown in the picture above.

The idea is that the better we understand each other’s interests, the more likely we are to find a solution that satisfies both of us.

3. Generate a variety of options before settling

We often fall into the trap of thinking there are few options open to us.

This happens a lot with jobs. If someone is frustrated, they think the only option is to quit.

Instead, if they were able to have a principled negotiation, it might be possible to find other approaches that might work better.

Generating options is about being creative – coming up with a range of ideas and working through them, perhaps using a framework such as TOLOPOSOGO.

This is where the idea of win-win comes into it. Alternatives that maximise each parties interests are more likely to go ahead than win-lose.

4. Insist that agreement be based on objective criteria

When we just can’t agree because our positions are directly opposed, then we need to find a form of objective criteria that we can both share and use to resolve differences.

The classic example here is when you share a cake between to children and they both want to cut and choose first.

Resolving this often means agreeing that one child cuts it and the other gets to choose first.

It might be possible to adapt a decision table to make this clear to both parties.

BATNA – the Best Alternative To a Negotiated Position

Sometimes we can’t agree, perhaps because the other side refuses to engage in the open way needed for principled negotiation or thinks that they can get their way through manipulation and dirty tricks – such as deception, trying to create artifical stress (banging the table, eating before a meeting and leaving you hungry) or leaking to the media.

In this situation, we need to call them out.

For example, if someone makes a take-it-or-leave-it type offer, then we need to treat that as a proposal and not simply accept the feeling of finality imposed by one side.

It’s also important not to have a bottom line, especially when there are imbalances in perceived power.

The only reason to negotiate is to get a better deal than one we can get if we didn’t negotiate.

That is our BATNA, the best alternative. Knowing our BATNA helps us make the most of what we have.

The power in negotiations comes from the ability we have, in the end, to walk away.

How to deal with the facts in front of you

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How do we know what’s round the corner when we’re driving somewhere?

We look in front of us, through the windshield, at the road ahead.

The road behind us, reflected in the rear view mirror, isn’t going to add much to our journey now.

So, why is it that so much of what we do in work resembles driving by looking in a rear view mirror?

Take budgets, for example.

In many businesses these are set at the start of the year. We assume levels of sales and costs and work out what we think will come in that year.

Perhaps we set targets that are higher than we can achieve – as “stretch goals”, with the idea that this might motivate us and drive us to accomplish more.

Then, we tend to forget about them. Perhaps someone looks at them once a month and sends out an update.

Or, take the business of losing weight.

If we’ve put on a couple of stone and decide at the start of the year it’s going to come off – then we’re essentially setting a budget for weight loss.

Perhaps we then check our weight every once in a while and see where we are – and then it all gets a little too de-motivating and we switch off.

Many entrepreneurs seem to have a different approach – both to money and weight loss.

Instead of thinking up a magic number and then looking back each month to see how they are doing when compared to that number, they look forward.

They pick a target – for example the amount of money they need to bring in each week to break even and then watch how they are building up to that number every week.

This is a subtle but important difference.

They don’t ask themselves, “How did I do last month compared to budget”.

They ask, “How far off am I this week from target?”.

They know that if they build up to their target every day, every week, then as the weeks turn into a year, they will arrive at their destination ahead of any budget they might set.

In addition, if they are having trouble getting to the target, they can do something – they can change tactics, commit to doing the basic things they need to better or set a more realistic target.

There are no penalties – just deal with the facts in front of you.

Like driving, if a tractor pulls into the road ahead of you, then you can slow down or change direction.

You can only do this if you are looking forward, not back.

How much work can you really get done today?

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What kinds of things does work cover?

For many workers, it’s either a task or an appointment.

We handle tasks in to-do lists.

We add to these lists every day, either with a constantly growing one or on scraps of real or digital paper, scattered about.

Items on to-do lists are like weeds, they keep turning up and there is never enough time to get them all cleared away.

Appointments go on a calendar.

They are a commitment that we will meet with someone at a particular time, and they go into a slot.

More often than not, we are pretty good at keeping appointments.

Dan Charnas, in his book Work Clean – The Life-Changing Power of Mise-En-Place to Organize Your Life, Work and Mind, writes about how many people deal with the day.

Underplanners plunge in unprepared.

How the day goes is likely to be a surprise and what they do is determined by how others interrupt, order or interact with them.

Overplanners go to war with the day.

Their schedules are tight, with no space for disruption or the unexpected. They expect you to set an appointment for every discussion.

Both approaches don’t really leave us with a feeling that it’s been a good day at work.

Dan suggests that working clean with time means two things:

  1. Work out what you want to do
  2. Organise those in sequence

What you want to do – appointments or tasks can be collectively called actions.

He suggests starting with listing three actions that you want to do tomorrow. Put them on your calendar in the order you want to do them – fitting them in around any appointments you already have.

Then, do your actions.

If you did everything on your list, then move to setting out four actions.

Keep increasing the number of actions until you reach the point where you can’t always cross off every item on your list most of the time.

For example, if you can mostly do six things every day but never break seven, then your optimal number is six – what Dan calls your Meeze Point.

Less than that, and you’re probably not pushing yourself enough.

More than that, and you’ll probably just be overloaded and feel like you’re not achieving anything, even though you really are.

Your Meeze Point is the number of things you can really get done today.