archive-portfolio.php
content.php

Coefficient of Fiction

 The Story of You and Your Customers

 There’s a funny (but entirely accurate) little book out there called Systemantics, The Systems Bible, by John Gall. In the book, he refers to this Theorem:

“If the system says it happened, it happened.”

The net effect of this is to ensure that people in systems are never dealing with the real world that the rest of us have to live in, but instead live within a filtered, distorted, and censored version created from the limited sensory organs of the system itself.

The theorem has two corollaries:

#1 – A system is no better than its sensory organs. 

#2 – To those within a system, the outside reality tends to pale and disappear.

It also has a mathematical component (sort of) intended to reveal the amount of information that reaches, or fails to reach, the attention of the relevant decision-makers. It goes like this:

Ro ÷ Rs = The Coefficient of Fiction 

Ro is the amount of Reality that fails to reach the decision-makers 

Rs is the Total amount of Reality presented to the System

When Ro ÷ Rs is equal or close to zero, there is full awareness of outside reality.
When Ro ÷ Rs is close to one, no reality is getting through. 

 Positive feedback competes with Reality for input into the System, and the higher the positive feedback, the less Reality getting through.

The larger the System, the worse this gets. It’s critical that companies consistently and continually do reality checks with the outside world (their customers and the customers of those customers) to avoid a high Coefficient of Fiction. 

In this respect, COVID may have just given us all the gift of a lifetime… the ability or need to take a step back and check out some assumptions! 

What do you genuinely know about your customers? And what, if anything, do you know about their customers?

If you were to direct a documentary called The Day in the Life of My Main Customer, what would it look like? If you were to map out the current reality of your customer, what would that look like?

It’s so easy to see your customer from your perspective. Unfortunately, it usually ends up being some version of: “We make this _____ that does _____ and we sell it to _____.”

But today, products and services are bought, not sold. 

As a result, the model is changing and has changed for many companies. Seventy-two percent of B2B influencers are now under the age of 45.

Why does that matter?

Because most people under the age of 45 are astonishingly great at getting the information they want and need without ever talking to anybody. In fact, for many, talking to someone is the last thing they’ll do when making a buying decision. Heck, if your Buyer can purchase any of your products or services directly from your website, be sure that’s an option. Even if the price tag is $100k or more, you’d be surprised at what Buyers are willing to buy before they talk to anyone. 

This boils down to the fact that the vast majority of the buying process is complete before anyone is aware there is a buying process. 

This means it’s an excellent idea to know exactly what your buyers are looking for. What do they need or expect to see to know you might be an option? Where will they find this information? What proof are they looking for?

A great place to start is by doing an unstructured interview with buyers. When we do these for our clients, we mostly want to speak with buyers who did not buy from our client. 

Why?

We learn so much more. Just hearing the words they use, the process they go through, and how the decisions are made is fascinating and invaluable. 

Here’s an example. In this example, assume the Company (our client) is a Salesforce Implementor and Integrator. We’ve spoken to five Buyers who did not buy from them.

We gathered the following specific quotes, and we’re going to group them into a category called “Decision Criteria — Details that prove the Company can deliver on the needed benefits.” 

Quote One: We’re a relatively small group with limited time to manage this process. We need things spelled out for us – A, B, C. We need to know what we’re responsible for and when and what they’ll be doing along the way.

Quote Two: Our existing systems are not very sophisticated, but we need to make sure our existing data goes over correctly and that we’re able to integrate with our accounting program.

Quote Three: I want continuous but concise insight as to what’s happening with the installation throughout. I don’t like surprises and don’t want to find out at the last minute that we are way off schedule or that more budget is needed to get it done. 

Quote Four: I want relevant communication and transparency. I don’t want to have to guess at what’s happening. 

From these statements, we can summarize and create a headline. We’ll call this — “The Implementation Process Will Go Smoothly With No Surprises.” 

What can we do with this? What proof will we need to offer the Buyer?

How about something like this…

Our No Surprise Guarantee means: 

• Project scope is easy to understand and requires 100% agreement by all parties involved.

• Weekly check-in calls – 10 minutes max! 

• You’ll always be included in decisions.

• We install fail-safe test & feedback loops throughout.

• You get our 360 Data Migration expertise – which means no info is left behind. 

• Our proven process is designed to deliver exactly what you expect, if we fail to deliver you’re covered with our 100% money-back guarantee.

What we like about this…

First off, the promise. A 100% money-back guarantee is powerful and places the burden of delivery squarely on the Company, with no wiggle room. The key is in the project scope – it has to be easy enough for everyone to understand and agree with. This means the Company must do all the work necessary to fully understand the Buyer’s needs and present them in an easily understood way. Second, it addresses the Buyers expectations if they say, “We’re a relatively small group with limited time to manage this process. We need things spelled out for us – A, B, C. We need to know what we’re responsible for and when and what they’ll be doing along the way.”

We would suggest the Company provide an If-Then analysis for areas where there is likely to be confusion or the outcomes are not obviously apparent. Create a visual diagram so that the Buyer can easily see how things are connected, and the consequences if the connection is broken. This will further reduce the risk to your Buyer of not understanding and not getting what they thought they were getting or need, and of the Company not fully understanding what the Buyer needs and is expecting. 

Requiring a 100% project scope agreement by all parties places the burden of scope creep directly on the Buyer’s shoulders. Anything outside of the 100% agreed upon scope will need a decision from the Buyer – either they spend more time and money now, or they table it for later. 

Weekly check-in calls, the promise that the Buyer will always be included in any decision, and fail-safe test & feedback loops throughout… all work to take away surprises. This speaks directly to both Buyer expectations – “I want continuous but concise insight as to what’s happening with the installation throughout. I don’t like surprises and don’t want to find out at the last minute that we are way off schedule or that more budget is needed to get it done,” …and… “I want relevant communication and transparency. I don’t want to have to guess at what’s happening.”

Promising ‘no data left behind’ with the Company’s 360 Data Migration expertise addresses the Buyer’s expectation when they say “Our existing systems are not very sophisticated, but we need to make sure our existing data goes over correctly and that we’re able to integrate with our accounting program.”

Suppose the Company is confident enough in its ability to produce the right scope document and is disciplined enough to follow the protocol outlined (calls, decision making, testing & feedback). In that case, a 100% money-back guarantee is very realistic, and most competitors will be unable to match this offer – at least not in the short term. So it’s a real competitive advantage. 

With all the information you get from your Buyers (especially those who did not buy) you’ll have a powerful way to look at all your communications and even your internal policies. 

You will quickly see the gaps and will also have the solution to fill those gaps. Literally, the Buyer will tell you exactly how they want you to approach them, what to say, and where to say it. 

To see if you really need to do this, go ask everyone in your Company “What do we do for our customers?” 

If you hear a lot of answers that follow the formula “We make this _____ that does _____ and we sell it to _____” then you know you need to go find some Buyers to talk to. Preferably Buyers who did NOT buy from you. 

Or hire a company to create a documentary for you. **smile**

Thanks for reading this!

Your happy, dedicated, results-driven friends at The Business Lab.

content.php

Exploring The Potential Of Risk – Part One

Is risk the next big thing?

 In their paper, What doesn’t kill you will only make you more risk-loving: Early-life disasters and CEO behavior, Gennaro Bernile, Vineet Bhagwat, and P. Raghavendra Rau wrote that “CEOs who experience fatal disasters without extremely negative consequences lead firms that behave more aggressively, whereas CEOs who witness the extreme downside of disasters behave more conservatively.”

Interesting. And, I remember listening to an interview with Steve Jobs1 where he talked about such an experience – “I was walking across the grass at my schoolyard going home at about three in the afternoon when somebody yelled that the President had been shot and killed. I must have been about seven or eight years old, I guess, and I knew exactly what it meant. I also remember very much the Cuban Missile Crisis. I probably didn’t sleep for three or four nights because I was afraid that if I went to sleep I wouldn’t wake up. I guess I was seven years old at the time and I understood exactly what was going on. I think everybody did. It was really a terror that I will never forget, and it probably never really left. I think that everyone felt it at that time.”

I reached out to Mr. Rau, asking if he saw any correlation between COVID and future risk-taking CEOs. Here is his note back to me:

Not really, Kathy. Our paper examines formative influences on CEOs during a period of time when they are most receptive to these influences (i.e. between the ages of 5 and 15). Covid was a relatively short term unexpected disaster that had differential effects on different forms of companies in different locations. So I would not expect any casual influence from Covid on current CEOs. — Best, Raghu

While COVID isn’t the same kind of disaster the authors reference, I do believe COVID is generating plenty of current risk-taking CEOS. 

Here’s why…

Think about risk in general. In fact, think about the opposite of risk.

The essence of a thing never comes into existence by itself and as itself alone. It always manifests itself along with and by means of its own opposite. – Novack, 1986

What’s the opposite of risk? 

Safety

Secure

Certain

Protect

Invulnerability

Fixedness

Inaction

Firmness 

Idleness

Immunity

Asylum

For many, COVID has wiped out or lessened much of the safety, security, certainty, protection, and invulnerability we had or thought we had. 

So, do we have fixedness, inaction, firmness, idleness, immunity, and asylum?

Is fixedness, inaction, firmness, idleness, immunity, and asylum really the opposite of risk? Or, could you argue that every word on the opposite side is far riskier than risk? 

Has America and the small businesses and corporations who drive it lost its mo?

Why don’t employees want to come back into the office? Is it really the fear of COVID, or could it be something else? Could they be unhappy? Could they be bored out of their minds? Could they be craving a change?

Maybe they’re secretly begging for transformation. Something new, better, more exciting to focus on.

Joseph Campbell said, “People say that what we’re all seeking is a meaning for life. I don’t think that’s what we’re really seeking. I think that what we’re seeking is an experience of being alive, so that our life experience on the purely physical plane will have resonance within our innermost being and reality, so that we actually feel the rapture of being alive.”2 

Is there a connection here? Are employees and companies looking for the experience of being alive? 

I wonder, if companies were people, what would they say? What truths and confessions would they whisper in our ears?

Would the company’s original soul recognize itself anymore?

What about the people inside?

The 2015 Gallup poll3 found that 68% of employees are disengaged (United States). 68%…That’s a lot of uninterested people.

Are they just crappy employees? Or, is there just not that much to engage with at work? Is their interest wasted with too many mind-numbing activities that have no purpose? Are they set up for failure and boredom? Are they all in a vicious cycle and just exhausted? 

To me, here’s an example of how the soul of a company can wither. It’s not as sexy as the absence of some insanely great purpose or an initiative to save the world, but it’s one of those things that can eat away at a person’s morale and enthusiasm for their work. 

Example:

The company is an engineer-to-order company – a project environment.

They have a product development group that consists of six departments: 

Product managers 

Engineering 

Engineering services 

Industrialization 

Production 

Support services

Product managers are measured on profit volume, milestones, and due dates. This department is run as a profit center where each department charges for their services. The way product managers are successful is to reserve resources to protect against uncertainty and minimize the hours used for a project – to improve profit.

Engineering, engineering services, and production are measured on the efficient use of employees or resources. The way they are successful is making sure all resources are always busy – maximizing the hourly rates they charge the product managers. 

Production also is measured by having the right materials on hand. To do this, they are very careful to choose the most reliable suppliers and have enough stock on hand (maybe even a slight excess). 

Support services such as procurement, IT, and human resources are measured on minimizing costs. And for procurement, keeping stocks low.

Here’s the position they are all in:

So, in this case, employees are asked to be fully engaged while – all simultaneously – they maximize and minimize employee’s time and rates, they keep inventories high and low, and they use low cost and higher cost suppliers. 

The assumption here is that efficiencies and improvements in individual departments equal maximum efficiencies and improvements for the whole company (the sum of the parts equals the whole). 

These sort of tug-and-war scenarios are more common than one might think. 

In manufacturing, employees are often measured on the ability to keep machines running as fast as possible as often as possible. So, when they have to stop a machine for a new setup, they are dinged for the reduction in machine time. This can mean they keep running more and more of what they already have set up. This leads to way too much of what isn’t needed, using raw materials that have been allocated to another order, and often delaying other orders. So, these employees are under pressure to simultaneously keep machines running and stop machines running. This also puts them in direct conflict with the sales and purchasing folks (if they ‘stole’ raw materials that didn’t belong to them). 

The assumption here is idle machines equals waste, and waste is bad. 

Speaking of sales, salespeople are often paid on commissions. The more they sell, the more they make. This often leads to them selling the wrong things – things that are easier to sell but far less profitable. They are under pressure to sell what’s profitable or sell what’s easier to sell and get paid faster. 

The assumption here is that all products and services have the same value to the market and to the company selling them. The assumption may also be that the way products are priced and accounted for is helping profits. 

In addition, salespeople are held directly responsible for almost all aspects of the sale – they are the ones management turns to when things go wrong (the deal doesn’t materialize, or the client is a slow pay). They are the ones responsible for communication between engineering and or manufacturing. They are the ones responsible for keeping the customer happy when things go wrong on their side. They are the ones that are often responsible for further qualifying the prospects and for prospecting in general. They are pressured to sell more stuff while simultaneously do all these other things. Research from InsideSales.com estimates salespeople spend only 37% of their time selling. This means the majority of the time, they are not selling. 

Salespeople are asked to keep the company afloat by selling more while keeping management and customers happy by not selling. 

The assumption here is that salespeople are solely responsible for the clients. Another assumption is that asking them to do other things gives management control. The particular measurement itself may make sense from the tried-and-true wisdom-nugget that ‘what gets measured, gets done.’ 

But that brings up the question – what do we want done? And, do we, or should we, all want the same thing done? 

From the customer’s viewpoint – yeah, they want everyone focused on getting them what they bought and need. Their ‘done’ is the product or service promised. 

That brings up another tried-and-true wisdom-nugget goes something like – “the faster the flow, the more the dough.” This makes sense because it matches what the customers want – the product or service to flow to them as quickly as possible. 

It would be interesting to see what would happen if a company tossed out its current measurements and tied all activity to flow. 

Would that be risky? Would it be worthy enough to gain the engagement of most all employees? 

How risky would it be to conduct a significant assumption review, a cause-and-effect exercise to see if the hip bone really is connected to the backbone – or find out that it’s really connected to nothing the body needs or even wants. 

It seems that eliminating some of the vicious cycles for employees could bring light back into their eyes. If nothing else, I’m sure they’d feel ‘heard and understood.’ 

It could be something to explore. 

No, it’s not earth-shattering.

It’s pretty down-to-earth and can be tedious. But, we do know it does make a difference and helps get everyone focused on the health of the same body. If you need help building cause-and-effect maps, please buzz us at 281-610-8631.

Continued success,

Kathy

p.s. – Part Two focuses on the “higher (or at least more interesting) purpose” potential of risk.


 1 — https://americanhistory.si.edu/comphist/sj1.html

2 — Joseph Campbell and the Power of Myth will Bill Moyers

3 — https://news.gallup.com/poll/188144/employee-engagement-stagnant-2015.aspx

content.php

Uncertainty

Uncertainty-unsmerentity

If you own or are the CEO of any business, uncertainty isn’t a thing; it’s a way of life. We deal with it every day. Uncertainty is just another way to say – we have a problem to solve.

Being American is what makes dealing with uncertainty a specialty of ours. Though some will argue, America is still the most innovative, risk-taking country in the world. Yeah, our status is being threatened like never before, but we are far from out of the race. 

It will be just this type of innovation and risk-taking that will “heal” our country and positively influence the world. 

President Trump had the right idea, “Make America Great Again,” but his approach was somewhat polarizing. 

America could certainly use another Mission to the Moon to galvanize and bring us all together again. Maybe President Biden has a plan.

But, we business owners & leaders cannot wait for someone else to take the lead and control our future. Maybe it’s a little like, “we have met the enemy, and he is us,” but regardless, it’s “us” who will figure it out. 

It’s not about trying to predict something that cannot be predicted – the future. It’s about which way to lean and to react faster than your competitor, being in a position to respond when the market tells us something. 

Like many countries, America hasn’t replenished its population with youth as fast as improved life expectancy has aged her. Rapid replenishment in manufacturing is a sort of “holy grail” and one worth pursuing. But, it’s not all that transferable to supplying enough young to offset the old and dependent. Declining birth rates come with affluence. And America is, for the most part, affluent – certainly an advanced economy.

The slow and declining birth rate is bad for the economy – and not favorable for the youth. Mauro F. Guillén, in his book, 2030 – How Today’s Biggest Trends Will Collide and Reshape The Future of Everything, puts it into perspective. 

A few more numbers for you:

By 2030 here’s what will be happening: 

  • US Demographics are changing: Hispanic Americans aged 15 to 34 will be the majority. And Hispanic Americans are more likely than any other group (white or otherwise) to be self-employed or own a business. 
  • There will be more grandparents than grandchildren.
  • For every baby born in America, 4.4 are born in China, 6.5 in India, and 10.2 in Africa.
  • Women will own more than half of the world’s wealth. And women are different than men when it comes to making decisions. 
  • While America and Western Europe age on, the centers of innovation, invention, and disruption will move to emerging countries.
  • Middle-class Asia will be larger than middle-class America and Europe combined. 
  • The Asian markets (even excluding Japan) will be so large that the center of global consumption will shift eastward. Most new products and services will be reflecting the preferences of Asian buyers. 
  • African agriculture is predicted to become a trillion-dollar sector by 2030. They are about to experience what happened to us in centuries past – a dual agricultural and industrial revolution.
  • Kenya is one of the world leaders in mobile payments, and Nairobi – it’s been dubbed the “Silicon Savannah.” 
  • YEP: By 2030, we will have more industrial robots than manufacturing workers, more computers than human brains, more sensors than human eyes, and more currencies than countries.

By the way, 2030 is less than ten years away – it goes by quickly. 

Assuming the above is reasonably accurate…

Boom or Doom? That probably depends on how good a company is at following and taking advantage of market trends. It also depends on mindset – taking actions competitors will not take or taking a wait-and-see stance, “let’s see how this whole post-COVID thing turns out.”

Either way, the future must be dealt with.

Market demand is shaped by customers’ tastes, habits, and preferences – whether that’s the 2030 view or the 2021-22 view. One of the biggest things taken from us during COVID is intuition. Of course, not entirely, but our intuitive sense of what the market is likely to do in the near future is diminished. So, yes, while Americans are ready-built for uncertainty, the level of uncertainty is much higher than anything seen in a long time, maybe ever.

What do things look like for a company’s customers and their customers – tomorrow or in 2030? 

When global consumption moves eastward, what does “Asian preference” mean for an organization and its products/services?

When women own more than half of the world’s wealth, what, if any, adjustments will be necessary – products, offerings, services, capacities, capabilities – what can reasonably be expected? 

On the consumer purchasing side, most companies understand that women make the majority of the household decisions. But will female CEOs make decisions differently than their male counterparts? If so, how? What is most likely to happen, and what does that mean for the organization? 

As America and other countries age (including China, which is aging faster than the US), how will their habits affect consumers and businesses? If you manufacture plastics for the healthcare industry, you will probably thrive. If you manufacture for or are in the housing industry, an aging population will create different demands than a younger population. This affects the demand for single versus multi-family properties, for owning versus renting, and for residential improvements that allow older adults to age in place. Older people do not spend in the same way younger people do.

When African agriculture becomes a trillion-dollar industry, can or should an organization be part of that? If so, how?

What do things like near-shoring mean? Will it help reduce lead times and inventory? Will it minimize the risk of future COVID-like disruption?

If a significant percentage of the workforce (the US or otherwise) never sets foot inside a high-rise office building again, what does that mean for the business? 

Many intelligent people predict inflation and that the Fed’s have worn out their qualitative easing bullets to combat it. Unless we can figure out how to turn all the current and rapidly increasing debt into equity, we are caught in a concerning debt trap.

What does any of it mean for an organization, for the organization’s customers, or for the customers of the organization’s customers?

When assessing uncertainty and the future, tracing the company’s product or service to the final consumer/customer can bring valuable insights. Thinking up and down the supply chain as far as possible and stopping to think how things are most likely to change can point in the (new) right direction. Of course, all assumptions need to be validated as much as possible to avoid wishful thinking, group-think, or rabbit holes.

It all boils down to understanding cause and effect and the company’s position with that dynamic. This, along with understating optionality, will make things much easier for companies in the short and long term. Most companies already understand their business ecosystem – suppliers, customers, their customers, their customers, etc. No one has to be a true prophet to figure out the general direction of what’s happening. Using cause and effect will give you a pretty good idea of how the system will or likely will respond. This, in turn, will present a good idea of what to do – which way to lean. Validating the underlying assumptions and then adding indicators or triggers when things are going out of bounds will make the picture clearer on an ongoing basis. 

Example: If a company manufactures steel products for car manufacturers and it knows that 50% of the vehicles are made up of plastics – and that plastics only contribute 10% to the weight – and that a 10% reduction in weight can lead to an ~8% improvement of fuel emission, then, this company can factor that into future product and market segments. What can be done to insulate the company from ‘being caught off guard?’

Understanding optionality can be as simple as segmenting markets so that the company has a good presence in several markets and that there is little chance of all those markets going down at the same time.

Adding buffers to protect the goal and signals warning if the market is taking a different direction than anticipated are critical. Re-planning may be necessary. Trial & error and failures will happen, but buffers and triggers can limit the damage, and the company will benefit significantly via more clarity. These more minor mistakes are likely to prevent or mitigate much larger ones.

Establish a very high/ideal filter, then run things through that.

To get clarity, research is needed. To find the best sources, ask customers what research they pay attention to – this is an excellent place to start.

In systems thinking or the thinking process, tools called Current and Future Reality Trees are used to map out cause-effect relationships.

Tools like this have been responsible for many highly profitable breakthroughs. Its power lies not just in finding the direction but in understanding why. From here, a Transition Tree can be built to get from A to B. It involves all key people and brings insights from their perspectives – this tends to expose any negative consequences that would have been left out. It also gives the team the tools on how to deal with those potential negatives and turn them into positives – or the need to re-think the solution.

To take it a step further, companies can create a sales pitch – not for their company, but a pitch of their customer’s company. It’s a pitch that pitches their customer’s products and services to their customers. This will bring a new and essential perspective to what the customer needs and how to help them get there.

Included in the pitch:

  • Clear, concise, compelling overview/idea that states what’s facing this customer – the problem, what’s changing, the forces behind the current situation. What is stopping them from increasing sales or profits? It might start something like this, “What happens when an industry unintentionally forces its customers to make bad decisions that hurt their profitability?” Or, “What happens when a company breaks its promises to its customers?” 
  • Spend most of your time on the problem. Understand their problem to the degree that they agree with you that, yes, this is the problem. In Chris Voss’s excellent book, Never Split The Difference, he refers to this as the “that’s right” phrase, which means you’ve broken through and you now have their full attention. 
  • What’s changing in their world right now?
  • Why is the problem so hard to solve? 
  • The solution, value prop, and how it will remove the limitations and help the company get more of what they want.

In our next article, we’ll present a Current Reality Tree.

You can also call us at 281-610-8631 (Kathy) if you’d like more information.

Continued success!

content.php

Just one more thing….

Forty years ago, if you wanted to stop product shortages or missed due-dates, the solution was there. It was clear, it was fast, it was simple, and it was pure common sense. You could do it with the same people, the same machines, the same resources you currently had. 

The results were staggering — some, exponential. 

Things like… Within four years, net profits equal to total sales… Going from the brink of bankruptcy to shares reaching 7300% of their value within seven years… Profitability improved to four times the industry average… Lead times reduced from 40 hours to 8… Seventy-six percent increase in annual sales… In less than 18 months, market share up by 25%, sales up 23%, total supply lead times reduced 90%, new products as a percentage of sales up 50%, OSHA recordables down 86%, and millions in CAPEX deferred… Sales increase of 62%, expenses reduced 67%, net profits up 531%, and return on assets up 403%… In 12 months market share goes from 15% to 80%… On-time deliveries improve from 60% to 96%, inventory decreases by 30% while doubling sales and reducing the cost of quality from 6% to 3.5%.

…Crazy results. 

And not just the Fortune 100. There were donut shops, furniture manufacturing with $3M in sales, warehousing, cabinet makers with $9.5M in sales, spring & wire companies with $12M sales. Small, medium, large — manufacturing, logistics, and projects all saw the same kind of results. 

It favored no specific industry, product, or service. If a company was producing X, Y, or Z to serve their client and the market, then it worked. 

Every company who used the solution had the same staggering results — a preeminent position because of their decisive competitive advantage. 

What’s fascinating, and what caught our eye, was how few companies took advantage of the solution. 

It wasn’t a secret. It was in plain sight. 

You could buy a book for less than $10, authored by the creator, with an easy to digest and very clear do-it-yourself outline.

You could attend events for less than $1000, where companies who used the solution would tell you how they did it. 

Experts trained to help companies use the solution were available and willing to work on results-based performance.

Why didn’t everyone who knew about it take advantage?

Was it inertia that grew out of a commitment to what they knew? Was it fear of risk? Was it disbelief? Was it, ‘yeah, but we’re different’?

Was it leadership okay with being just a little better than the competition — relying on the existing benchmark to judge their performance? 

Turns out, there were two kinds of leaders who used the solution. 

  1. The true, competition-leapfrogging, order-of-magnitude-seeking visionary leader who believed that significantly better performance was possible. And they believed it wouldn’t take a herculean effort. They had a simple but profound belief that more, a lot more, was doable.  

“And the minute that you understand, you can poke at life, and if you push in, something will pop out the other side, that you can change it, you can mold it. That’s maybe the most important thing. To shake off this erroneous notion that life is there and you’re just gonna live in it, vs. embrace it, change it, prove it, make your mark upon it.” — Steve Jobs

  1. The visionary leader with their back against the wall. Things weren’t going well….at all. A crisis, the inheritance of a poorly managed company with severe declining market share, a pandemic, oil at negative prices, a BIG and painful need to do something NOW.

 “Never let a good crisis go to waste” — Winston Churchill

In reality, these are the same because visionaries are always in a hurry — almost crisis mode — they see opportunity in terms of windows of time…and they see those windows close, time and again, very quickly. 

Far different than the ‘If it ain’t broke, don’t fix it!’ mindset.


It’s the bear story — A bear is coming after you. You stop to change into your running shoes. The competitor who happens to be with you asks, “What are you doing? You can’t outrun a bear.” You answer, “I agree, but I really only need to outrun you.”

So, here we are, some forty years later. 

No big surge of solution takers. No world-wide ‘how to’ solution woven into the fabric of corporate America.

The mighty, transformational, order-of-magnitude, competitive-leap frogging advantage is just limping along.

Of course, more and more companies of all sizes and industries have found and used the solution: again, the visionaries and those compelled to take full advantage of a crisis.

So again, we ask, why? 

Why haven’t the vast majority of manufacturing, logistics, distribution, and project-driven companies used this solution? 

Why does it seem so hidden to the leaders of these companies?

Well, it’s not because they are unaware. 

It’s a simple and perfectly understandable reason.

While the solution works with the company’s existing people, machines, and resources, there is one absolute necessity required.

It’s this necessity that stops companies from using the solution.

The necessity?

The company must change how people and ‘things’ are measured. 

That’s it.

And it’s a big IT. The bigger the company, the bigger the IT. 

So how do they do it?

How does a leader deal with this kind of change? 

They shift the focus. 

Because it’s not ever about how you measure someone or something, it’s what matters to the market and your clients. 

They turn the company’s entire focus to one or two (and no more) very clear and easy to see metrics. Maybe it’s product outages. Maybe it’s poor due-date performance. Maybe it’s fill in the blank_______. 

You can name one or two critical things inside any company that drives everything else. 

These leaders use those metrics to change their world. 

They put a flag in the ground and say… “We will reduce product outages to zero, and we will do it in 12 months. We will do whatever it takes to make that happen. Let’s find out what it’s going to take, and those are now what we focus on.”

Is that different than a crisis? No, not at all, really. 

In a crisis, you face doing whatever it takes to get out of that crisis. 

The only real difference is the crisis.

If you are in crisis with everything to lose, that’s different than not having products on the shelves or slightly less than industry norm delivery dates. 

It’s the visionary leader who treats the ‘one or two things to fix that, for certain, drive our company’ as a crisis. 

Now, we’re not talking about panic. That’s different. 

Maybe we replace crisis with intense, laser, don’t mess with me, focus.

It’s the burning of the ships mentality. “This is where we are going; there are no other choices if you choose to be here.”

The visionary leader’s true gift and that of their direct reports lie in how they focus this focus internally. 

Everyone must be on board, and everyone must understand why it’s a crisis and understand their part in getting us out of the crisis. 

They must be so well indoctrinated and aligned that they intuitively ask and answer, “How will what I’m doing affect the crisis?” They must map it out so they can see the cause-effect. They must work as a team, like firemen faced with a burning building and children trapped inside. No one has to ask, “What should I do?” And no one wanders off to grab donuts. 

It takes a visionary leader who can transpose the intensity of the burning building into their one or two key things that need fixing; their crisis; their laser-focus. And one willing to replace all current methods of measuring people and things with measurements that matter to the crisis/goal/focus.

It takes tremendous conviction and a deep understanding of preeminence.

It also takes a deep understanding of why the crisis is upon them and what’s necessary to fix the underlying core problems. 

It’s easy to see how focusing the company on the burning building transforms it and eliminates the barrier of how people and things are measured. 

New measurements will emerge. Those measurements will be in perfect alignment with the singularly-focused objective. 

Is it quick? Probably not. 


Is it easy? Depends on the visionary, their personality, and leadership skills. It depends on the support the visionary receives from those above them. With the right visionary and the right support, it not only can be easy, it can also be fun and breathe new life into the organization. 

Just one more thing…

Where there is crisis, there is opportunity

If COVID 19 isn’t enough of a crisis for you, then indeed that plus the pace at which new technology is emerging will be. 


You’re either on one side or the other of advances in the industry sparked by a crisis and their visionaries, breakthrough technology, oh, and a simple solution created some forty years ago. 

We hope you are well on your way to leapfrogging over to the more profitable side. 

-k

Peter Falk image permission details — This work is in the public domain in the United States because it was published in the United States between 1925 and 1977, inclusive, without a copyright notice. For further explanation, see Commons: Hirtle chart as well as a detailed definition of “publication” for public art. Note that it may still be copyrighted in jurisdictions that do not apply the rule of the shorter term for US works (depending on the date of the author’s death), such as Canada (50 p.m.a.), Mainland China (50 p.m.a., not Hong Kong or Macao), Germany (70 p.m.a.), Mexico (100 p.m.a.), Switzerland (70 p.m.a.), and other countries with individual treaties.

content.php

Fisher Kings, Complexity and Enchantment

Deep in the forest, far away from most others, a widow governed by fear raises her second son. She is determined to keep this son safe from the fate that took her husband and first child. But, boys will be boys, and at the age of 16, this boy steps across his known threshold and comes upon five knights from the Arthurian court. Now, he’s never heard about or seen anything like these knights, and he is mesmerized. He is now determined to become just like them.

Of course, he has to tell his mother, whose greatest fear is just this. She faints with the news, comes to, and sees his determination. She lets him go but insists he wears the homespun shirt she’s made for him and gives him a set of rules to follow along the way.

After some time of riding in the forest, he finds King Arthur’s castle. He makes his way inside, lands before the king, and asks to be knighted. The king is quite amused until the damsel who has not laughed or smiled in six years bursts out laughing. Legend has it that this girl will only laugh in the presence of the greatest knight the world has ever known. Taking notice of this, King Arthur knights the young man, gives him a Paige, a sword, and tells him that “Adventures make the knight.” And, off he goes.

His first encounter is the Red Knight — the reigning king of knights who is so powerful that he rides into Arthur’s court once a year, throws wine in the queen’s face, and leaves again with no one able to stop him. The young boy doesn’t know this but what he does know is that he wants that red armor this knight is wearing. Upon telling the knight he wants his armor, the knight replies, “Sure, if you can get it.”

The Red Knight doesn’t really want to fight this skinny young boy because he sees it as a waste of time, but the young boy insists. They ride at each other. The young boy falls to the ground but is unhurt. Instinctively he reaches for his dagger throws it at the Red Knight, and it pierces him through the eye, killing him.

The young boy struggles to remove and put on the Red Knight’s armor. His Paige helps him but tells him he should not place this armor over his homespun shirt. The young boy refuses to cast the shirt aside and puts the armor on himself.

Along the way, he finds his way to Gornamont, who teaches him how to be a ‘proper’ knight. Like his mother, Gornamont gives this young boy a set of rules to follow, of which one is “To not ask too many questions; otherwise, you’ll look foolish.”

The young boy sets out to go back and see his mother. Along the way, he meets many adventures and defeats all challengers. He never kills them; instead, he sends them back to serve King Arthur.

One day he finds shelter in the Fisher King’s castle. The Fisher King is the Grail King, and even though he has possession of the Grail, which provides endless abundance, he and his kingdom cannot partake. He has a wound that will not heal. He is in agony but cannot die. His kingdom is a reflection of his inner self and as such, is also in agony. It’s in dire straits — nothing can grow, and nothing can thrive — it is wounded. This is the wasteland. 


The people inside are enchanted, and they know they are enchanted. Their lives are in perfect symmetry — they can have different viewpoints, but the situation is always the same. They are deluded and so entrenched in their wasteland, they cannot see the bigger picture. They can only offer cliches of responses. They can only react and cannot create.

Creative acts require a new level of understanding of a relationship to life, others, the landscape, etc. An understanding of what this relationship might be. Creative acts require innovation.

The inability to take creative action is the wasteland—people living only in terms of what has always been, unable to see anything else — enchantment.

As the young boy enters the castle, a ceremony begins. The Fisher King is paraded out, in agony and close to death, but cannot die. The young boy feels the urge to ask about the situation but remembers he is not to ask too many questions and risk looking foolish. He remains silent.

Everyone leaves, the young boy is taken to his room for the night. When he wakes up, his clothes have been washed, and his armor shined, but no one is in sight. He is all alone. He leaves the castle, which evaporates behind him. 

Wandering along, he meets a damsel who scolds him and tells him, “A spontaneous question from you would have healed the king and the land.”

It is here that the young boy knows his name for the first time – Percival. For he chooses the middle – of the valley, of a pair of opposites, of everything.

It is here that Percival realizes he has not achieved the heroic task. He’s told that he can never enter that castle again because of his failure. He dismisses this and sets out to right his wrong. He wanders around for five years. During this time, he has found his own way. He realizes he failed his task because he too closely followed the rules given to him — he fell into natural cliches.

He now knows he must shed his mother’s shirt, follow his own heart, intuition, and belief in himself instead of following the herd. He must take creative action, stick his neck out, and go against the norm. He must see things anew with a beginner’s mind.

“A man must consent to look to a foolish, innocent, adolescent part of himself for the cure. The inner fool is the only one who can touch and heal his Fisher King wound.” — Robert A. Johnson

Percival finds his way back to the castle, asks the question, and becomes the Grail King — allowing the Fisher King to die, the land to heal, and the enchantment to be broken.

The proper response to healing wasteland situations is to heal the wound by following one’s own nature; by being authentic. This is what Percival did — he achieved the kingdom through his character, his loyalty, his courage, and his one-pointed resolution. He inherited the kingdom but not the wound.

The Grail and its many benefits are obtained by people who have lived their own lives. It is a symbol of an authentic life. The former Grail King, the Fisher King, was given his position instead of earning the position, and thus the wound.

Nothing can be healed if it remains in the old Fisher King mentality. To be cured, cliche responses and status quo enchantment must give way to something entirely different from what currently is. The beginner’s mind, the inner fool, is what can heal the wound.

“In the beginner’s mind there are many possibilities, in the expert mind, there are few.” — suzuki

For many companies, COVID has forced the issue of giving way to something entirely different from what is. And it’s the companies and mindsets that approach this force with a beginner’s mind, with the courage to look foolish, stick their necks out and create, who will achieve the Grail.

We are in unprecedented times for innovation and growth. Growth and innovation do not come free; they must be earned through adventure. Throughout, leaders will increasingly find themselves in the forest with no clear path and a new magnitude of complexity. The comfortable, linear-enchanted business world falls quickly to the new, asymmetrical mystery of innovation.

In traditional hierarchical organizations, linear thinking is common and non-linear responses clash with a linear mindset. In operations/production, non-linear (asymmetrical) responses are often tackled with optimization (efficiencies) — operating close to maximal capacity with minimal redundancies, idle capacity, and of course, optimal costs.

The problem with operating close to maximal capacity with minimal redundancies is the unknown. One small blip can give rise to chaos and lots of unhappy people — especially customers. There is a dark shadow, a hidden effect tucked inside the unexpected. 

The unknown (a.k.a. variation) can cause havoc to a beautiful, overly-linear system. When it’s not accounted for, the errors compound and multiply. It’s what P.W. Anderson terms as “More is Different.” It’s what happens when things are added, and the sum of everything becomes increasingly different from its parts. Complexity starts to rear its challenging head. When complexity is involved, it becomes quite challenging to predict how even one action will affect the entire organization. It isn’t easy because of the overwhelming interactivity and interdependency that happens between people, departments, processes, and functions. Throw in a little uncertainty, and you’ve got quite an adventure.

The cliche response to complexity has typically been to break it down into manageable parts and focus on the parts, describing them in a complete, objective, and deterministic way. If every part is made more efficient, the entire company will be more efficient. But with interdependent systems, this is not actually feasible or even possible. There are emergent properties (More is Different phenomena) that cannot be reduced to their parts’ properties. And even if they could, this breaking down does not imply that the system can then start with these parts and rebuild a more effective system (reductionism does not imply constructionism). 

Leaders who find themselves in this forest of complexity can take refuge in a relatively simple approach — instead of trying to manage and make sense of the complexity, focus only on the areas that can benefit the company the most and de-focus, de-emphasize everything else. 

Use the tools of the Grail message — these are the questions Percival finally learns to ask:

  1. Whom does the Grail (our company/genius/gifts) serve? This is translated into the singularly-focused goal of the company. 
  2. What ails you? What is limiting our ability to achieve our goal? 

Most companies see themselves in service to three entities: customers/market, employees, and shareholders. All three require that the company be and stay profitable; otherwise, they all three evaporate quickly. It’s not only okay, it’s very smart to make profit (maximize return on stakeholder equity) the primary goal, with satisfying the needs of the customers, employees, and shareholders as the necessary condition. It keeps everything in check. 

Now, increasing profits is not at all motivating for the vast majority of employees. So while we can put a number on the goal (increase profits 10x in the next 12 months), the ability to translate this into something more meaningful is the key. Profit is the vehicle we will use to _________(purpose-driven goal). In today’s environment, jobs, and meaningful work sound like great purpose-driven ideas. 

It’s the job of the company’s vision (via leadership) to ensure the needs of the customers, employees, and shareholders are met and exceeded in concrete, measurable ways AND in aspirational ways. There is little doubt that the “right” vision will drive success and profitability, but you cannot separate the two. One’s vision can be to “make insanely great products,” but if those products are perpetually unprofitable, vision aside, the entity will parish. 

To avoid being dragged into the firefly dragon-mouth of complexity, a single goal must be identified, and the other things that you’re tempted to call goals become necessary conditions in achieving the goal. One goal with a few (ideally, very few) necessary conditions is the key to surviving and thriving in uncertainty. Keeping everyone and everything focused on this goal is the ultimate quest and test of the leader. 

This last part, keeping everyone and everything focused on the goal, is by far the hardest to disenchant. Hierarchical organizations are born enchanted. It’s their nature to break things down into manageable parts (e.g., accounting, marketing, R&D, operations, H.R., sales, logistics, I.T., etc.), describe these parts in a deterministic way, and reward them for their part-specific goals & efficiencies. 

To keep everyone and everything truly focused on the single-pointedness of the goal requires disenchantment from their nature. It requires the un-focusing and de-emphasizing of the parts to emphasize and focus on the whole. This is the ultimate Fisher King wound that hierarchal companies face. The key to healing this wound lies in how people and departments are measured. To test this out, take the key measurements of how marketing, sales, and operations are judged and see if they are harmonious with one another and focused on the single-pointedness of the goal. If there are gaps, there lie tremendous opportunities.

Once you know the singularly-focused goal, it’s fairly easy to figure out what ails you — what prevents you from achieving that goal. 

You will arrive at the real answer to what ails you only after you’re able to whittle it down to a single or very few causes. If you acquiesce to a hundred differently-perceived causes, you’ll be wandering in the forest for a very long time — enchanted by the notion of complexity and unable to see what others, who are disenchanted, can see.


Systems Thinking and The Thinking Process are very effective tools at identifying the culprit cause(s) that limit goal achievement. It takes effort and time, but the clarity and focus will radiate and invigorate the entire organization. And while everyone in the company will experience the adventure in their own way, leadership ensures all paths lead to the common goal — obtaining the company’s Grail. 

Keep in mind that when someone is involved in the conception, they are eager and determined to nurture, protect, and support what’s conceived. This doesn’t mean it’s a good idea to get 5,000 people in a room for three days while you go through a ‘what ails you’ session. It does mean it’s a good idea to get as many people involved as you can somehow. 

Ride on brave knights — the kingdom is yours.

KE

P.S. The two questions (whom does the Grail serve and what ails you) are also about compassion. These hero stories were written in the 12th century when the world was in tremendous upheaval. The religious wars were tearing countries and people apart. The words were written to serve as guides. Just as in the 12th century, our world in the 21st is in tremendous upheaval. For some, their paths have been completely destroyed. Business owners who’ve been successful for 20+ years have lost their businesses. Many are struggling to pay utilities. Like a tornado, COVID has destroyed many while others were saved. Compassion is a great equalizer. If you can do anything to help another during this time, this is your greatest gift.