21 April 2014 Brent A Fisher The important thing is this to be able at any moment to sacrifice what we are for what we could become Charles DuBois The difficult task of leadership is to make sure the organization raises its ability to handle growth as rapidly as it does its re ID: 290758
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Slide1
Strategy to Scalability
21 April 2014
Brent A.
FisherSlide2
“The important thing is this: to be able at any moment to sacrifice what we are for what we could become.”
--Charles DuBoisSlide3
The difficult task of leadership is to make sure the organization raises its ability to handle growth as rapidly as it does its revenue line.
(The Breakthrough Company, pg 14)Slide4
small entrepreneurial firm
toEntrepreneurial EnterpriseSlide5Slide6
The LadderSlide7
The Ladder SurveySlide8
Advantages of Sovereign Company
Better able to recruit and retain:People want to be part of something
bigger than one
person.
More
highly committed
to sovereign company vision than “go back to work and leave the driving to us” senior management.
Can adapt and make
decisions more quickly
since people throughout the organization have an understanding of the vision and how it plans to get there.
Like George Washington who didn’t accept a crown, breakthrough leaders are motivated by a sense of confidence in the
potential of people
to accomplish great things.Slide9
Upping the Ante
Progress always involves risk; you can’t steal second base and keep your foot on first base.--Frederick WilcoxSlide10
Upping the Ante
Understanding when to up the.Bet big
in order to grow big.
88% reported their success was mainly due to “
exceptional execution of an ordinary idea
.”
Willingness to place bigger and bigger bets actually
decreased
its risk, making the firm’s
long-term
prospects even
safer
.
Only companies that continue to
adapt
through
progressively bigger bets
will reach breakthrough.Slide11
Peeling the Onion
Thinking deeply about where the market is going.Does this bet help us change the field of play in our market?Refuse to see other companies as bit players.1+1+1=6 is the power of the exponential bet relation to other bets.Slide12Slide13
Placing Big BetsSlide14
Company Character
People seem not to see that their opinion of the world is also a confession of their character.--Ralph Waldo Emerson Slide15
Company Character
Bedrock foundation: Lining up what people say with what people do.Success . . . Focus first on the way their company treated its people and its customers.The leaders of breakthrough companies put enormous faith—and power—in the hands of their employees.Slide16
Company Character
We were struck by how carefully and precisely the companies had defined their business models so that they could build jobs in which people know exactly what was expected of them and also had the tools to achieve high levels of performance.He found that people tended to be most creative, effective, and connected to their work when they were challenged without being defeated.
People flourish, he found, when they are given, “clear goals, unambiguous feedback, and a sense of control
.”Slide17
Company Character Leadership
What one characteristic did all of the breakthrough leaders we studied share? Charisma . . .But it turns out that the word “charisma” doesn’t mean what many people think it does . . .Charismatic leaders inspire with their character.For these companies character is sacred.Slide18
Company Character
Strategic Miser:They scrimp on the frivolities so they can spend real money where it counts.Slide19
Navigating the Business Bermuda Triangle
We cannot direct the wind, but we can adjust the sails.--Bertha CallowaySlide20Slide21
Bermuda Triangle
Often have to spend some money.Avoid premature diversification – companies often move on to the next product before fully mastering the ones they’ve already got.When it is time to diversify, let the
customers be your guide
.
Nothing kills speed, hurts customer satisfaction, and erodes a cost advantage faster than
unnecessary layers
of management.Slide22
Erecting Scaffolding
Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination do so.--Douglas AdamsSlide23
Erecting Scaffolding
“Our biggest risk is that we stop listening to our customers and start reacting to our competitors instead.” SAS CIOEveryone . . . should have people to turn to for support when they are faced with a challenge.Too many growing companies continually try to reinvent the wheel instead of seeking out the very best wheel-makers.Slide24
Erecting Scaffolding
Net Promoter Score: Ask customers, on a scale of one to ten, how willing they would be to recommend a company’s product to their friends: 9 & 10 Promoters, 7 & 8 Passives, 1-6 Detractors. Zero in on the detractors and find out how to turn them into promoters.
“There are only two requirements for growth,” Cook has said. “
Happy customers and profitable customers
. NPS was exactly what we needed to get back in touch with our customers and make the kinds of changes they wanted us to make.”Slide25
Erecting Scaffolding
Peer Networks: The research shows that one of the main reasons people participate in peer groups is to hold themselves accountable for improving the performance of their firms.Boards and Advisory Boards that challenge management thinking
Serving on Boards – access and learn from fellow Board members
Professional Associations & outside mentors
Investors
Customers and Vendors: “…new technologies and ideas they provide us for our products are critical to our success.”
Colleges and UniversitiesSlide26
Insultants
It is difficult to lay aside a confirmed passion.--Caius Valerius CatullusSlide27
Insultants
Not only are they open to people questioning the fundamental assumptions of the business, breakthrough companies encourage people to buck the system.Consultants from the inside.
Someone
willing to ask the tough questions
that cause a company to think critically about its fundamental assumptions.Slide28
Why Companies Need
InsultantsIdeas the CEO initially doesn’t like are regularly implemented at our company: True or False (90-60)Our CEO encourages thinking that challenges our current beliefs: True or False (77-47)Slide29
Insultants
Insultants are masters at getting their ideas heard, and they never resort to insulting someone. They work quietly within existing systems to get the organization to question its assumptions and change its thinking.The power of insultants is directly proportional to the free flow of information in a company.Slide30
Insultants
: Strategy DevelopmentExpand beyond the CEO and senior management team.Created strategy faster and with much higher levels of commitment and follow through.Slide31
Three Leverage Points Leadership
There are three places a leader can have the greatest impact on an organization: strategy, people, and execution.Slide32
Reinventing Strategy
The purpose of strategy is to help the members of an organization learn to triage issues, to sort out what is truly essential to the firm’s success.Executives kid themselves that they are better at strategy than their troops, but fail to recognize that they have one key advantage—they are drinking from a very large data pipe. Give people on the frontlines
access to key strategic information
and train them how to use it, and they’ll surprise you every time.Slide33
Compressing Strategy Cycle Time
The faster a company can accumulate and prioritize insights, convert the most important insights into decisions, and translate those into actions, the more readily it will outpace competitors.Slide34Slide35
Strategy Learning Cycle
What have been our most important strategic accomplishments during the past ninety days?What are the most important ways we fell short of our strategic potential during the past ninety days?
What are the most important things we have
learned about our strategy
during the past ninety days?Slide36
Getting the Most Out of People
When people are enrolled at all levels of the organization in crafting a strategy, those people invested more of themselves in making sure the company reached the goals it outlined.Hire people that you think can scale.Breakthrough leaders understand it is their responsibility to develop new hires into the right people.Slide37
Getting the Most Out of People
The breakthrough companies we visited were filled with great coaches—people skilled at helping people do their very best.Slide38
Execution
Relentless focus on improving the company’s ability to execute.Effective execution is vital to breakthrough.Don’t wrap up the strategy meeting until the group has distilled the top priorities into specific, measurable initiatives and action plans, ones that have both a deadline and a person responsible.Slide39Slide40
Strategy Cycle at Work
Those companies that follow the 90-day dynamic approach to strategy, focus on getting the most out of its people, and drive effective execution are at a significant advantage.Slide41
The art of progress is to preserve order amid change and to preserve change amid order.
--Alfred North WhiteheadSlide42
Strategy
Ethos
Management views
its job as
Organizations that crowned the leaders
Organizations that crowned the company
CEO/Founder makes major strategic decisions, often with the input of a handful of close advisors
Strategic issues openly and actively debated throughout the organization; all the major functional areas (product development, finance, operations, sales) contribute meaningfully to strategy formulation
Personal loyalty to the
leader and his vision
Commitment to doing the very best job possible for the organization, even if that means “bucking the system” or questioning the firm’s fundamental assumptions
Running the business
Creating an environment where people get better at spotting what is important, and at making and implementing decisionsSlide43
Culture
New Ideas
Interdepartmental
conflict is resolved by
Organizations that crowned the leaders
Organizations that crowned the company
Often purely a reflection of the personal characteristics of the leader or founder
Though strongly influenced by the leader, tends to more broadly reflect the people who make the organization, as expressed in their stories of shared experiences
Come primarily from senior management
Regularly and systematically come from throughout the firm
Kicking the issue upstairs
Affected departments sitting down and discussing the issueSlide44
People are
celebrated for
Biggest no-no
Organizations that crowned the leaders
Organizations that crowned the company
Heroics (saving the customer, solving the big problem, etc.)
Bricklaying (helping to build robust and sound processes that make organizational heroics less necessary
Act in a way that might be misinterpreted as disloyalty
Fail to have the best interest of the company at heartSlide45Slide46Slide47
Successful Change Management
Duration (D)Integrity of Performance (I)Management CommitmentCommitment of Senior Management (C1)
Local Level Commitment (C
2
)
Effort (E)
DICE Score = D + 2I + 2C
1
+ C
2
+ ESlide48
Successful Change ManagementSlide49
Sources:
The Breakthrough Company: How Everyday Companies become Extraordinary Performers --by Keith McFarland http://www.breakthroughcompany.com/“The Hard Side of Change Management,” Harvard Business Review
, October 2005.