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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