Reinforcing Clarity Through Systems

The need for and challenge of strategic adaptability and evolution is not going away any time in the near future. Sooner or later, each of us will need to transform our organization in response to market shifts, introduction of new technologies, arrival of new low-cost competition, or in response to state or federal changes.  What we have to realize first is that such a transformation is really two transformations, namely Transformation A - the adaptation of the core business to the realities of the disrupted marketplace, and Transformation B - the creation of a new disruptive business that will become the company’s next source of growth.

At the exact same time, both transformations will require the sharing of resources without interfering with each transformation. Clark Gilbert, Matthew Eyring, and Richard N. Foster in their article “Two Routes to Resilience: Rebuilding your core while you reinvent you business model” in the December 2012 issue of the Harvard Business Review calls these shared resources a “capabilities exchange.” Now, we need to remember that individual competencies refer to a specific person’s knowledge and skills required to fulfill specific role requirements. Organizational capabilities, on the other hand, are collective abilities of the firm required to execute the business strategy.  

As the above authors note, “The goal of transformation A is to find the strongest competitive advantage your current model can sustain in the disrupted market place.” As they continue, “Too often companies ... focus only on preserving their margins by reducing costs.” Their example of this is Borders closing store after store in response to Amazon, “vainly hoping to hold on to its profits by shrinking.” 

A broader view is needed with new strategic questions when dealing with this level of transformation. As they suggest:

- “What can we still do better than both our traditional rivals and the upstarts?”

- “What must we give up?”

- “Why do our customers come to us?

- “What is the real need that connects them to our brand?”

The second transformation has a different focus. As they write, “To realize their fullest growth potential, incumbents need to embrace the possibilities of the new marketplace as energetically as the disruptors do. That’s the purpose of transformation B.” To do this successfully, do not ask this question, “What do we do that customers still want?”, because “that’s the focus of transformation A.” Instead, ask the following new question, “What unmet needs do customers have in today’s environment?” As they explain, Transformation B is about “the construction of a separate business with its own profit formula, dedicated staff, distinct processes, and singular culture.... The idea is to exploit the disruption without being encumbered by the legacy margins,revenue requirements, or practices of the core business.”

Here is where the capabilities exchange concept fits in. “Launching a successful start-up inside a threatened legacy business takes creativity and grit.... Scaling up the new business requires something more - a structure that allows the two organizations to live together and share their strengths.... That’s the role of the capabilities exchange, which coordinates the two transformation efforts so that each gets what it needs and is protected from interference by the other.” The key is to determine which capabilities the B organization can borrow from the core to gain a competitive advantage over independent start-ups.

Here is an example from the aforementioned article. Barnes & Noble sells books and reading devices. “As Amazon’s online sales cut into bookstore profits, the Kindle burst onto the scene in 2007. In three and a half years, e-books sales surpassed bound-book sales on Amazon.com.”

As a result, the authors pointed out that Barnes & Noble repositioned their core into “a chain of retail outlets that are designed to be enriching places to shop for gifts and spend time with children and that focus less on lower-margin high-volume book selling and more on higher-margin children’s books, coffee-table books, and gifts.”

At the same time, Barnes & Noble delivered a new business model: “The Nook e-reader business, which leapfrogged Amazon’s Kindle technology and used the chain’s brick-and-mortar stores to give customers physical access to the product in a way that Amazon couldn’t match.”

The shared resources for Transformation A and Transformation B were the following: “Branding, publisher relationships, customer intelligence, physical merchandising space.”

The results so far have been the following: “B&N’s $7 billion in 2012 revenues came mainly from its profitable chain of 700 retail bookstores. The Nook captured 27% of the e-reader market in two years, growing revenues from $ 105 million to $ 933 million. While the Nook division remains unprofitable, it recently received a $ 300 million equity investment from Mircosoft.” In short, Barnes & Noble is transforming itself from a book-seller to a technology company. 

The is a great article and I encourage all of you to read it. Here is the link: http://hbr.org/2012/12/two-routes-to-resilience/ar/1

Happy Reading!

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

Creating, Communicating & Cascading Clarity - part #2

So how do I create a clear message as a leader?

In the world of leadership communication, our goal is to describe what needs to get done “simply, but without oversimplification,” to quote Marcus Buckingham, from his book. The One Thing You Need to Know ... About Great Managing, Great Leading, and Sustained Individual Success, Free Press, 2005.

In a world of ambiguity and subtlety, creating a clear and definitive message is hard work. The pathway to creating a clear message that can be cascaded effectively begins by taking time to reflect. First, talk to someone like a colleague or executive coach and share your ideas, challenges and problems. If this person is experienced in this level of work, they can reflect the essence of your message back to you in a helpful manner.

Second, once you have your message, be very careful in the selection of your role models or examples which live up to or embrace this message. In particular, make certain that your role models are people whose performance role models the key parts of message on a regular basis.

Third, practice giving your message. Rather than coming up with a new and better speech every time, successful leaders focus on refining what they are talking about and then seeking out a diversity of audiences to whom they can share it with through out the company. As Buckingham reminds us, “Discipline yourself to practice your descriptions of the future. Experiment with word combinations. Discard the ones that fall flat and keep returning again and again to the ones that seem to resonate and provide us with the clarity we seek.”

At the Fall 2012 and Spring 2013 From Vision to Action Executive Roundtable, I talked about the importance of developing a quarterly message. Many people since then have asked me how do you keep it fresh so people listening are not bored by what you are saying? First, I tell them their message needs to be one people can see, hear and feel. Second, there needs to be systematic communication, i.e. a regular system of communication like an internal company newsletter, an internal senior level e-mail plus quarterly strategic updates and dialogues. Third, there also needs to be symbolic communication which is a way to make sure the message is noted and understood in a special way. For example, if the message is about wellness, then the symbolic message may be for the leader to commit and follow through on participating in Weight Watchers to loose some extra weight.

As a leader, one must not only have a message and communicate it well but also make sure it is getting cascaded down into the organization. According to Patrick Lencioni in his superb book,  The Advantage: Why Organizational Health Trumps Everything Else in Business (Jossey-Bass, 2012), “There are three keys to cascading communication: message consistency from one leader to another, timeliness of delivery, and live, real-time communication.” 

Which ever every pathway you choose to creating, communicating and cascading clarity into your organization, I have one small tip to share with you. By the time you are bored and tired of what you are saying, I guarantee you that someone is probably hearing it for the first time given how busy every one is with issues, problems and distractions these days.

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

Creating, Communicating & Cascading Clarity - part #1

When working in a world filled with back to back meetings, each requiring a different focus, a leader is expected to have the mental agility to leap from subject to subject without any missteps. Furthermore, they are expected to create clarity and build perspective in each of these meetings. The difficulty is that this is easier said than done.

In the beginning, having a well crafted and specific message is important but the way in which you communicate it is also important. To many leaders have a great message but it is the misalignment between their verbals and non-verbals that causes them to have problems. Furthermore, if they do not role model excellent listening skills and respect, then they will live and die by their say-do ratio. Too many leaders and managers end up, using an old Texan phase, becoming a person with “all hat and no cattle.”

Marcus Buckingham in his excellent book, The One Thing You Need to Know ... About Great Managing, Great Leading, and Sustained Individual Success, Free Press, 2005, says an effective message should include the answers to the following questions: 

- Who do we serve?

- What is our core strength?

- What is our core score?

- What actions can we take today?

My insight when reflecting on his work and my own experience these last 2+ decades is that organizational clarity and successful organizational decision making are inter-related. While I may be stating the obvious, the former significantly impacts the later, i.e. clarity before a decision improves the decision.

However, we need to remember the insights shared with us by Noel M. Tichy and Warren Bennis in their October 2007 Harvard Business Review article called “Making Judgment Calls: The Ultimate Act of Leadership.” Here, they point out that during the early stages of decision making, effective leaders do three things successfully. First, they sense and identify the problems before the organization. Second, they frame up and name these problems. Third, they mobilize and align people and resources to solve them. These critical skills could be significantly impacted if one is not very clear.

From my vantage point, the core parts to a leader’s message need to be the following:

- the prequel to the message which creates clarity about context and urgency.

- the core message which creates clarity about where to focus. 

- the action which goes with the message that translate it into effective service delivery.

As Buckingham explains in the afore mentioned book, “Show us clearly whom we should seek to serve, show us where our core strength lies, show us which score we should focus on and which actions must be taken today, and we will reward you by working our hearts out to make our better future come true.” 

As leaders, we need to remember that clear people make better decisions and work harder to make goals become reality. 

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

The Prerequisites For Organizational Clarity - part #2

One of the biggest challenges this spring is to understand your role as a leader and as a manager when it comes to creating clarity. First, we need to recognize that role clarity helps in creating message clarity. The more we know what is expected of us and where we fit into the organization the better we are at communicating and creating clarity. And as I have pointed out recently in this blog, your message will have to deal with our fears and our needs. 

One key element about a successful message to the organization is that it has an image we can envision or a phrase that we can utilize in multiple settings. The best messages have both. For example Danny Meyer’s wonderful phrase, “constant gentle pressure” and his image of “putting the salt shaker back in the center of the table” is a classic example of a great message and a great image. But it would not work if the people utilizing it did not know their role in the organization.

Next, we as leaders need to define what clarity means to us.  Here are three quick questions to help you think about this subject:

- Does clarity mean that employees only do what you tell them to do?

- Does clarity mean that employees need to live up to your expectations?

- Does clarity mean we all collaborate together based on a common understanding about the purpose and strategy of the company?

While we may not like the questions, we need to reflect on our answers because too many times as a consultant and an executive coach, I have listened to people talk to me about creating organizational clarity and I have realized that all they really want is for people to do what they tell them to do. This barely ever works, and when it does, it does not work very well for very long.

So after writing about the prerequisites for creating organizational clarity, here is a summary of the four key prerequisites for creating organizational clarity:

- A leadership team who role models candor and strategic level trust, and who recognizes that having organizational clarity is a competitive advantage.

- A performance management system and a talent management philosophy and system based on accountability and results as well as the values and behaviors behind those results.

- An explicit definition and articulation of organizational core values or principles, and strategy.

- An investment in continuous learning and improvement to build and continuously update the capacity within the organization to be more effective and in sync with the changing world.

Creating organizational clarity is not a one time show. It needs to happen each and every day. And leaders and managers at all levels of the organization must role model it and focus on it. When this happens, clarity has the potential to be a very powerful flywheel for innovation and effective service delivery.

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

The Prerequisites For Organizational Clarity - part #1

As I pointed out last Monday, more and more organizations are struggling with developing an adaptive strategy. From my vantage point, they seem to be struggling from two main problems. One is an SDD, a strategic deficit disorder, and the other is OADHD, an operational attention deficit hyperactivity disorder. The combination is quite difficult to overcome. 

Right now OADHD seems to be the bigger problem in some organizations. Individual ADHD symptoms are typically described as inattentiveness, i.e. they fail to give close attention to detail, do not seem to listen well, have difficulty organizing, and is easily distracted. These same individuals can also show over-activity, i.e. always on the go, acts as if driven by a motor and talks excessively, plus impulsivity, i.e. interrupts or intrudes on others. These behaviors can describe the actions of many senior leaders right now and many companies’ aggregate operational behaviors. 

When reflecting on the above, I remembered something that I learned a long time ago. First, the sum of organizational change reflects the sum of individual change. Second, the sum of individual change is the result of individual clarity. In short, ideas and thinking do impact behavior

So the big question this week is how do I create organizational clarity once I know I need to create it?

Initially, understand why you want to create it in the first place. When people in leadership positions realize that they need to create clarity and focus in their organization, more likely it is because they feel they have lost control of the focus or lost control of the message. They often realize that day to day operations are trumping strategic level work. Some days they start the change journey from the place of freaking out over something that is “big,” e.g. a drop in performance metrics, loss of a major customer account, an organizational near death experience, etc. However few leaders realize that when they freak out, the organization goes nuclear with anxiety, fear and trepidation, resulting in a downward spiral that picks up steam at an unbelievable rate.

Still, there is a way to break out of this race to the bottom. First, face your fears and name them. Marcus Buckingham in his excellent book, The One Thing You Need to Know ... About Great Managing, Great Leading, and Sustained Individual Success, Free Press, 2005, says there are five fears:

- the fear of death (our own and our family’s) which results in the need for security.

- the fear of the outsider which results in the need for community.

- the fear of the future which causes the need for clarity.

- the fear of chaos which results in the need for authority.

- the fear of insignificance which causes the need for respect.

Upon more reflection and after reading a good article called “Reclaim Your Creative Confidence” by Tom Kelley and David Kelley in the December 2012 issue of the Harvard Business Review, I believe the more realistic leadership fears are the fear of the messy unknown, the fear of judgement, the fear of the first step, and the fear of losing control.

Therefore, our choice as leaders is to acknowledge that fear happens and that we can at times feel like we are loosing control, clarity and focus. If this happens on your watch, you first need to understand which fear is taking place and whether or not you can do anything about it. As Stephen Covey years ago asked, it is within your circle of influence to change it?

Next, you may have to deal with your own fears outside of your relationship with the company. This is the time and place to utilize an experienced executive coach or personal counselor.

In short, change happens. Fear is normal. How you deal with it is your choice. Now is the time to choose wisely.

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

2014 Training and Roundtable Dates

Good news!  

For those of you who are planning ahead, the dates for the 2014 From Vision to Action Leadership Training and the 2014 From Vision to Action Roundtables have been set. Here they are:

2014 From Vision to Action Leadership Training

- March 4 - 5 - 6, 2014

- May 6 - 7 - 8, 2014

- September 9 - 10 - 11, 2014

- November 13 - 14, 2014 

Location: Coralville Marriott Hotel and Conference Center, Coralville, Iowa

Spring 2014 From Vision to Action Executive Roundtable:

- April 9 - 10, 2014  - Courtyard by Marriott, Des Moines - Clive, Iowa

Fall 2014 From Vision to Action Executive Roundtable:

- September 17 - 18, 2014 - Coralville Marriott Hotel and Conference Center, Coralville, Iowa

More details will be posted on the website in the near future. However, I wanted you all to have the dates once they had been confirmed on my end.  I am looking forward to 2014 already!

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

Some of the Major Problems in Creating Organizational Clarity

Currently the greatest external challenge to most companies is the high degree of strategic ambiguity. More and more organizations are doing a PESTEL analysis, i.e. the study of political, economic, social, technological, environmental, legal trends, and finding too many variables and uncertainties within the service delivery environment. Furthermore, these same companies are finding a lack of strategic clarity within the organization and a lack of strategic flexibility in systems and people also within the company. In short, many companies have discovered that they lack clear systems for managing or creating strategic adaptability. Overwhelmed by the complexity, they also are not proactively creating a system for building and maintaining an adaptive strategy.

From my vantage point, the underlying causes for organizations not being able to build and maintain an adaptive strategy starts first at the senior team level.  More and more of these teams are becoming dysfunctional. Rather than acting like teams, they often default to being senior leader work groups. Built around status and ego with a dash of artificial harmony, these so called teams avoid accountability and show little commitment for holistic strategic success. Furthermore, most are afraid of conflict and only talk about commitment, but show little behaviors related to it.

Second, most of these same organizations and their leaders are showing the hubris born of success, a problem first identified in Jim Collin’s book, How The Mighty Fall and Why Some Companies Never Give In, HarperCollins, 2009. As he writes, “Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they loose sight of the true underlying factors that created success in the first place.” By neglecting their primary flywheel for success, these leaders allow “what” to replace “why”, not realizing that when the rhetoric of success replaces an understanding of why, there will be a decline in the learning orientation of successful people and the entire company.

Third, these same leaders also lack a clear understanding of the relationship between culture and strategy, resulting in a lack of “institutionalizing” a clear definition of their culture and not leveraging their organizational core values to their competitive advantage. The result is that the company and in particular the senior team tolerate people in management and leadership positions whose behavior is out of alignment with the stated culture, core values and strategy.

While the above is taking place at the senior team and cultural levels, the next challenge for many leaders and their companies is how to successfully capitalize on expansion and growth opportunities. Most think of it as an effort problem when the vast number of problems actually fall into the area of strategic infrastructure to support expansion and growth opportunities. 

As we all know, new innovations compete for company resources, i.e. time, talent, and management attention, with the cash generating projects during any fiscal year. When all of the company’s budget, reporting and management processes are focused on the current fiscal year, they also define the compensation and incentives systems and thus focus everyone on accountability to the current fiscal year’s goals. If people do look ahead during the current fiscal year, they look to R&D and their long range strategic options by reviewing research, data and trends. The result is that any new innovations fall into a Bermuda Triangle where they are considered to a degree strategic but not yet fully implementable because the resources of time, talent and management attention are not fully given to them. In this no man’s land, the “new projects” here fail to be embraced because they can not deliver like the current fiscal year goals and systems. And because they can not show a fast ROI like current fiscal year products and services, they also are then hampered by lack of full operational support. Therefore, the new innovations become “demo bait” for selling more of the current fiscal year projects and services. 

Finally, there is one other problem that is causing many organizations to struggle at this time period. They do not understand the real challenge of talent management and performance management. They consider them to be something different but do not recognize that they are also interconnected. For example, many leaders do not recognize that talent management and development is about preparing an individual for future positions within the company, i.e. building bench strength, while performance management is about managing their current performance as it relates to agreed upon annual goals and 90 day plans. 

Given the aggregate of the aforementioned issues, many organizations need a clear strategic infrastructure which helps them to adapt strategically, manage talent and performance, and prepare for and implement strategic innovation. The sum of the above problems are hampering many organizations who are seeking a better future.

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257