Archive for the ‘Strategy’ Category

Seeing the Whole Picture

October 27th

In an increasingly interactive marketplace, there will be a need to think about transformation in a holistic manner.  There are at least five classic stages to the process.  Defining the gameplan and launching transformation, centering the change process with innovation, defining a strategy that’s creatively balanced, implementing transformation dynamically and sustaining the gain even as the forces that compelled change erode and force a new transformation process.

What’s important about understanding that these stages interact with one another is to recognize that they each need to be considered at the same time and adjusted accordingly.  For example, the scope of the innovation that you will need will depend on how much time there is.

Likewise, you cannot wait until you are sure that there will be a decline in the traditional business.  You have to anticipate the decline and begin to invest in the innovation program while there is time.

In the interactive marketplace there is a need to see the entire panorama and the whole journey – the ascent, the second path and the turning point.

What’s more, the increasing activism of the constituencies of the traditional organization will ensure that the traditional sequential way of looking at a process like transformation will no longer be representative of the way in which organizations interact and consider the elements of transformation.

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The 911 Surfer

September 11th

As I waited on hold for a conference call with two clients to begin at 9 a.m. I listened to the mindless recorded music of the conference line and I had Morning Joe playing in the background.  Much was predictable political chatter.  Should Governor Romney be running a campaign that more sharply defines conservative differences?  Should he be specific?  Is the President’s post-Convention bounce going to endure?

And then Willie Geist interviewed the “911 Surfer” and his wife.  This man has such an incredible story to tell but his survivor’s guilt has apparently kept him from telling it for 11 years.  He was in the second building to fall, going down the stairs as fast as he could and he had reached the 22nd floor when the building fell.  Somehow, miraculously, his slab of concrete was supported as the building collapsed around him and while he may have fallen 14 stories or more he opened his eyes and had survived.

I was back in 2001.  That day, like 2012, was beautiful and clear.  I was watching the Pentagon from across the river when it exploded in a fireball.  I remember my knees went weak and adrenaline shot through me.  The federal government was shut down and mid morning, while driving home I was caught in traffic.  On an incongruously beautiful Pennsylvania Avenue at 12th street I was stopped dead with my roof open listening to NPR.  A traffic cop and I struck up a conversation as I sat there next to him.  “You could try going up there to the White House or maybe down there to the FBI”, he said.  There were rumors on the radio of car bombs and speculation about whether there was a fourth plane.  Neither path seemed to be particularly appealing.

The 2012 conference call ended and MSNBC was running NBC’s coverage from the morning of 911.  Listening to Katie Couric and Tom Brokaw and Matt Lauer try and figure out what was going on was remarkable.  First, they learned the story one piece at a time while they were live on the air.  But they made remarkably few comments that they should regret today.

Even more dramatic was the way in which their conversation reflected the innocence of an isolated America.  “This is the first time since the war of 1812 or what we did to ourselves in the Civil War, that Americans have ever seen any damage from an attack like this on our soil”, Tom Brokaw said as the television showed the smoke from the collapsing tower literally white out all of lower Manhattan.  “This is so unreal that it’s like scenes from a movie” Katie Couric said.

What struck me in watching it play out again was how much time there was if you had known what was going to happen.  The 911 surfer had stayed in the building for 80 minutes after the first attack.  There was no reason to think that the building would not be safe, he said, and he and a few colleagues were told to stay.

Reading the 911 Report several years later I was struck in particular with how many clues there had been to the planning and the practice runs of the terrorists and how many Americans had to believe that we were safe from the clearly articulated threats.  There were dozens of people who could have stopped the events that played out that morning of 911.  But there was no concern with what everyone would have agreed was possible, but unthinkable.

There are these moments when it becomes clear that after this, everything changes.  In the US we have been so fortunate since 2001 that the plots have been foiled and there have been no new everts.  Human nature will push these matters to the back.  But there is no question that 9/11 was a strategic inflection point on many dimensions.

 

Creating a Playbook

January 20th

The concept of creating a “playbook” for future leaders should rightly be credited to Jonathan Breul, the Director of iBM’s Center for the Business of Government. We were talking about my pending Leader’s Guide to Transformation last year as he oversaw the progress of a publication that he was supporting. We were reaching for something that would give us an edge in getting noticed when we knew that the communications marketplace would be a crowded one.

The core concept was to create a “playbook” from the comments that were made by a variety of high level interviewees – ideas and concepts that they had found to be valuable.  Scheduling interviews was maddening.  But once in the room a wide variety of government leaders were more than willing to talk about what worked.

Our concept was that from such a playbook someone could assemble a specific gameplan that would fit the particular setting of the agency and the opportunities they could see before them.

There is no better example of the need to individualize a gameplan than the issue of the timing of the launch.  Leaders talk about the value of a “burning platform” to contribute a sense of urgency to an agency.  Having a compelling reason to act (the platform on which you are standing is burning) makes it easier to encourage action in a typically recalcitrant bureaucracy.  But the problem is that in spite of the heat of the moment, the right time to launch a transformation initiative may be more a function of the needs of the customers and the competitors than the ability to encourage movement from reluctant government managers.  Having the right play to call may make the difference between optimal timing and a lesser choice.

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The Transformation Leadership Process

January 15th

There is at times so much rhetoric surrounding the discussion of transformational leadership that its worthwhile at times to go back to basics and think about the conversation that you would like to have with a leader faced with the compelling need to lead change.  Where do you begin?  What if the elements of transformation that appear in the Leader’s Guide to Transformation (planning, aligning, innovating, implementing and sustaining) are not particularly meaningful?

The mantra of the modern Harvard Business School “thinking, doing, reflecting” may be a useful way to think about what comes first and what after that?   The working papers page contains a deck titled “The Transformation Leadership Process.  The concepts are simple.  But that’s the point.

  • Thinking – there is a great deal of justifiable excitement that surrounds the discussion of analytics today.  In part, this stems from the possibilities that technology has created for measuring performance on a real time basis.  But analytics start with knowing what should be measured and why?
  • Doing – Even with direction that is aligned strategically and an information architecture that can deliver performance information in a reliable, timely manner there will be a need in the modern marketplace to make decisions and to act collaboratively.  Here the “open swaps” decision model is shown to demonstrate an approach to decision-making that can be opened up to stakeholders.  The open swaps method compares multiple options with multiple decision criteria.
  • Reflecting – Here five questions that leaders should be asking about their effectiveness are offered as a starting point.

A “way forward” concludes the deck: do you want to consider strategies that emphasize cost reduction and efficiency to make improvements or are they focused on top line growth, on service and quality improvement.

What’s most interesting about revisiting the basics is seeing how important it is to begin by understanding where you are.  Just asking whether you are considering what to do, trying to do it or reviewing what happened offers an accessible starting point.

 

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The Uses of History

August 4th

As noted in an earlier post, in 2011, the U.S. Postal Service faces certain bankruptcy if the Congress does not act to modify the retiree health benefits payment required by the 2006 postal reform law.  Some might find it perverse to imagine that a strategic plan of more than a decade ago could be seen as a positive contribution when there a crisis today.

Yet a review of the 1997 strategic plan shows interestingly that the problems that are creating the crisis today were anticipated years ago.  The plans forecast that mail volume would decline and there was an imperative to rethink the nature of the mission of the agency and the means with which it delivers service.

In the introduction to the 1997 five-year strategic plan the Postal Service presented a vision of the future the follows.

As certain and clear as this path is, the future is not. Ten years from now, this same environment may be transformed by technologies in their infancies today. Ten years from now, the United States Postal Service mission responsibilities may be met only by a new understanding of universal service, access, and how best to deliver them. A decade from today, the Postal Service may have embraced technologies and systems as dramatically different as jet airplanes and robotic package sorters would have seemed to the 19th-century letter carrier.

Because this fiveyear plan is a living document, conceived to be flexible and adaptive to such environmental shifts, these challenges and external factors will be examined, weighed and where appropriate — addressed in the years ahead. Ultimately, the philosophy underlying this plan, these goals, and their strategies is to create unique customer value as the Postal Service grows, improves and strengthens its financial foundation. This is a philosophy that embraces change. Because, in change, there will be opportunity for the United States Postal Service to serve its customers better.

Ultimately, government leaders and for that matter, leaders in every sector, are necessarily limited in their capacity to reshape markets, to alter macro economic trends or to change the nature of their agency missions.  Leaders cannot anticipate that their actions will be judged failures if their plans are undercut by massive societal and market shifts.

In coming years there will’s most certainly be frustration with the need to realign government service and to downsize its presence.  Yet, seeing in a larger context, the requirement to publish a formal strategic plan offers an opportunity for proactive leaders to create markers, waypoints on a journey long journey of continuous improvement.

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Strategic Planning in the Public Sector

February 4th

Senator Mark Warner (D, VA) calls a new law for which he can claim some responsibility, the “biggest little bill that nobody has ever of.” With relatively little fanfare the GPRA (Government Performance and Results Act) Modernization Act of 2010 was signed into law in early January. Senator Warner (who was there to vote for health reform and financial services reform) believes that GPRA Modernization may be the most significant act of the 111th Congress.

The first GPRA (the law that’s being modernized) has a unique history. A Republican Administration (George H. W. Bush) worked with a Democratic Congress to pass a law that would require every federal agency to develop a strategic plan and annual performance plans. But there are laws and then there are laws. It was when Democrats took the White House (Bill Clinton) and launched a National Performance Review to create, as Al Gore used to say, “a government that works better and costs less,” that the performance reporting began to pick up steam. But in one of Washington’s ironies, it was when a Republican Congress seized upon the law to drive change in the (now Democratic) Executive Branch that the law took on meaning.

But that was then. Time has eroded the first enthusiasms, given the second Bush Administration (George W. Bush) the chance to create a performance scorecard and program evaluation system, and introduced new technology. The new technology in particular and the social media offer the government new opportunities to manage performance and drive innovation. So there is value in modernizing the planning and management process.

Sen. Warner believes that what will be most critical to making the new law work will be to improve the government’s collaboration skills. The new law needs to be implemented in a manner that will encourage government managers to adopt the best practices of others who have found ways to improve performance

The modernized law makes a number of changes that have long been needed (or at least codifies the directive to make the chances). Duplicative reports are to be eliminated for example. And the law directs agencies to do some things that most people would think were so logical that they would have expected that the government be already required to do them already. Strategic Plans, for example, must be aligned with the Annual Performance Plans and plans must be aligned with the Administration in charge.

What is perhaps even more significant, the modernized GPRA will create a number of mechanisms that are likely to dramatically encourage the practice of performance management. Each Agency will (1) have a Chief Performance Officer, (2) reports will explain why performance goals haven’t been met if there are shortfalls and there will have to be a performance improvement plan. In cases where goals are not met two years in a row, there must be a report to Congress. (3) There will be public web sites that are likely to dramatically expand the scope of the review and (4) a government-wide performance report will designate a small number of high level goals. Creating accountability, a governance process, public access and focus may still not be enough to dramatically change the practice of strategic planning and execution. But there’s no disputing the fact that these are all moves in the right direction, or as they might say in Washington “they’re directionally correct.”

The Sustainable Innovation Model, First Thoughts

August 27th

When I published “When a Turnaround Stalls” in the Harvard Business Review, (February, 2002) I found that I had never had an experience that offered quite as powerful a megaphone.  Telling my story of being recruited to start Internet businesses for the postal service, as some would later say, the Dinosaur of the Information Age, brought with it a long tail of lessons.

Perhaps best selling authors get to title their own articles, but in my case the phrase “when a turnaround stalls” had been a suggestion from the editor.  I had readily agreed because of the insight that it conveyed.  What had been stunning about my experience in the postal service was the speed with which we went from feeling as though we were on the top of our game to recognizing that we were in a financial crisis.  The GAO put postal transformation on the high risk watch list in 2001 and the Chairman of the Senate Governmental Reform Committee, Senator Fred Thompson, commented that he could see that “the Ox is in the Ditch, Big Time.”

Lesson 1 was that many people don’t read past the title, insightful or not.  Thoughtful observers who I would have anticipated would have given the article a more careful reading, interpreted the use of the word “stalls” as a slam.  In fact, probably the reverse was the case.  I may have gone a little overboard in writing about my respect for the postal management team.

I still think that its extraordinary that the organization can move nearly a half a billion pieces of paper a night.  In spite of modern automation technologies the network sometimes seems to be held together by the heroic actions of individuals.  And the leadership challenge that is entailed in guiding 650,00 people in this operational task is daunting.

The Harvard Business Review was a little less in awe.  When I objected to a particularly interesting anecdote about the Postmaster General using the example of Lance Armstrong and his coach as a model for talking about management, my story ended up on the cutting room floor in spite of my protest.

Lesson 2 was that even the most careful, interested readers have trouble connecting the dots when the subject is four abstract thoughts.  I was called by a consultant in Austria who wanted me to join him in working for the Austrian post.  A friend in New Zealand was called by a colleague in Japan and told he should read the article.  The Denmark Post (which is now a part of Sweden Post) used the article as a case study with their management team.   CEOs in the US told me that they were particularly interested in the Four transformation Truths that concluded the article.  I could see that the four transformation truths had resonance.  But in talking with people who thought that they offered value, I could see that they came as four independent data points.

The truths had emerged from the pressure that the Internet Tsunami inflicted on the USPS.  I felt at the time that there had been a mystical alchemy to the way that these insights about management had been created.

  • “Don’t Miss Your Moment” involved the critical element of timing, of understanding the urgency of the need for change.
  • “Connect Change Initiatives to Your Core Business” contained insights about the dynamics of innovation in a traditional enterprise.
  • “Don’t Mistake Incremental Improvement for Strategic Transformation” seems almost too simple today even though it might have been the most important insight of all
  • “Be realistic about your limits and the pace of change” captured the essence of collaboration and the modesty that has to become the foundation of sustainable change

These four points – timing, innovation, strategy and collaboration – are today the elements that form the essence of Transformation Strategy.  My friend who spent his career at Bain Consulting asked me whether I thought the “truths” were insight or anecdote.   Years later I still enjoy thinking about the speed with which he got to the core of the matter.  Knowing the difference is the refined substance that’s the feedstock of excellent strategy counsel.  When it grows thin you feel as though you are just telling anecdotes and listening to yourself talk.  When you can translate insight into an integrated story that has moving parts that illustrate the dynamics of the problem then indeed you can talk about “truths.”

I recognized that to tell such an integrated story about the Transformation Strategy that I had been given the privilege to see would require a picture.  In reaching for a picture that would illustrate the dynamics of the four truths and show how they related to one another, I had multiple influences – a speech that was once given by the postal service’s largest customer in which he talked about the “sinusoidal curve” and the need to invest in the future when times were good.  At the Institute for the Future I had met Ian Morrison who had talked about his “second curve strategy.”  But above all I was influenced by Jack Welch’s book “Jack, Sraight from the Gut

“In December of 2000, I was probably the only 65-year-old guy still drawing business charts for analyst presentations. I’ve always thought that chart-making clarified my thinking better than anything else.  Reducing a complex problem to a chart excited the hell out of me.  For every analyst I’d sit for hours with my finance and investor relations teams sketching out and tearing up chart after chart. (p. 396)”

Or “The vision [of the No. 1 and No. 2 Strategy] was simple, but I was still having a helluva time communicating it across GE’s 42 strategic business units.  I had been thinking about how to do it better for a long time.  Oddly enough, I found an answer on a cocktail napkin…I often drive people crazy by sketching my thoughts out on paper anytime, anyplace.”  And on page is the graphic that the drew with a black felt tip pen on a cocktail napkin to illustrate the vision that GE would be 1 or 2 in a market or they would fix, sell or close the business.

What lay beneath this simple picture of three circles outlining the Services, High Technology and Core Businesses was far more complex.  Being #1 or #2 implied the pricing leadership that came from having dominant market share and it held implications for operations, finance, human capital and strategy.

Most businesses and public institutions have problems that don’t look anything like GE’s world.  But the picture of the head of one of the largest most profitable corporations in the world drawing pictures to show the dynamics of his story and making up his own charts to illustrate it stayed with me.   The art in communicating a strategic vision across a complex enterprise was to find a way to convey insight with a picture that was simple and elegant.

The picture that represented the sustainable transformation model, a way of integrating the four truths, didn’t come for several more years.  That took a high alpine pass above Murren, Switzeland and the outline of the Eiger, the Monk and the Jungfrau, the mountain picture that appears on the blog.  Elements of the Brand (PDF)

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