Imagine this: you’ve just left your boss’ office and you were given the ball on a major, new, cross-functional project. You are buzzing with ideas about who you need, what you need, and the time and effort it’s going to take.

The question running through your mind in those moments is what should I do first? When I get asked this question, this is my response: first, build the raft. The raft will be the tool that draws the resources you need to you, rather than you having to chase them down.

You’ve got the ball. Now you need a “raft.”

The “raft” in this case is that simple vessel that will carry you, your team, and your project through the rough, uncharted waters of the next few months to completion. To create it, you lash together sturdy lengths of strategy and understanding, and you use your new ideas as the sail.

The 3 Key Elements of Your Raft

Your raft is a container or framework for your project that you and your soon-to-be-formed team can use anywhere, anytime, to recruit support and contribution.

A good raft has three things:

• A narrative framework
• A financial framework
• A visual framework

Let’s look at each of these elements in turn.

The Narrative Framework

The best narratives are based on good storytelling technique, which means there’s a hero. In your breakthrough project’s story, the hero is your customer. Good story structure has been studied for years, and has been summarized in numerous ways. For your purposes — running a successful, breakthrough project — you just need a very concise narrative that that covers:

A compelling statement of the current problem you are solving for the customer

• What triggered our catalyst, driving the need for a project
• The key insight and solution you are pursuing
• The ultimate benefit for the end customer and the enterprise

Here’s an example of the narrative when I was working on a project for wirelessly-connected vehicle safety systems:

(1) The current transportation system results in 40,000 highway deaths per year.

(2) The addition of passive safety in vehicles and infrastructure has reached a zenith in its effectiveness.

(3) By actively having vehicles communicate with the infrastructure and with each other we believe we can mitigate damage in up to 76% of the collisions.

(4) This could lead to 25-30,000 lives saved per year.

The Financial Framework

The narrative will get people interested and will keep your team focused. But you’ll need to back up the narrative with clear, tangible financial benefits. This requires research, but there are a multitude of sources for this kind of information, such as government studies, industry white papers and academic studies. In the vehicle safety system example, Cisco created a public white paper that laid out the financials:

Vehicle connectivity has the potential to unlock more than $30 billion in crash-related value for passenger vehicle owners, insurance companies, and society every year.

What you, the program manager, need to do is take this macro analysis and build a relevant model for your organization. Think along the lines of finding your specific role in the solution, your product or service contribution to that role, and ultimately what financial flow will accrue to your organization based on your participation.This takes some work, but once quantified becomes a very valuable tool to set priorities at the enterprise and functional level.

The Visual Framework

Every relevant program needs to have an easily understood sketch or graphic that instantly appeals to those who are too busy to dig deep in the narrative or financials. There are many ways to do this, but one that I have found effective is the business model canvas made popular by Alex Osterwalder.

A good, high-level visual for the vehicle safety systems is this graphic created by the U.S. Department of Transportation.

(For a fuller visualization of the system in a recent article take a look here.)

Now, put the raft to the test.

In order to start building this raft, it’s a good idea to do the homework that we talked about in the last blog post.

Once you have a basic raft — your rough narrative, financial and visual frameworks — start using it in every discussion you have with management, team members, and (under NDA) your partners and suppliers. Listen carefully and refine your raft as you get feedback. Quickly, your raft will begin to resonate with all your stakeholders.

A strong raft will allow your project to keep your momentum as the inevitable challenges arise, and as you need to have the hard trade-off discussions. While building a raft can be done internally, it really helps to get some objective outside help to speed up the process.

Which pieces of your raft do you have in place, and which are you missing? Let me know in the comments below.

Now that you know the value of growth leaders and how to spot the good ones, what do you do to keep them engaged? Entire books have been written on this topic, but let me touch on three key areas from my experience.

1) Ask them to go into new places and learn new things

If a request comes in from a customer that is clearly not in your normal line of business, but needs to be investigated, send them.  When I was in components operations, a very good opportunity arose in automotive devices, which was outside our core competence of communications equipment and I got tapped to go to Japan.  Good growth leaders are naturally fast learners and have the intuition to see around corners that much of your staff would struggle with.

When you give them these outside-the-box assignments, you are building your bench strength for the day when a critical issue comes up.  Having invested in these folks, you have someone to call on when that key customer wants to fire you, or a supplier has just had a catastrophic issue that threatens your supply chain and ability to meet your commitments.

You need to make sure that your growth leaders get to conferences and shows that are outside of your four walls.  You need these individuals to have an industry filter, and also to be on top of substitution threats to your product line as well.  Ask them to come back and brief your staff, using your existing business model map as the foundation.  This will allow your team to benefit twofold – they will be on top of the latest trend, and they will get to know the growth leader.

When it’s time to staff a growth project, you will have the talent ready to go.  In addition, if you’ve made wise investments, these leaders are bringing a steady stream of new ideas to the table for you to choose from.  Every good growth leader I know keeps a rolling stash of investible hypotheses – ask to see them.

2) Ask them hard, integrated questions

Growth leaders need hard problems to solve, and it’s your job to ask hard questions that serve to allow them to give their best.  When a paradox presents itself, share it with them, and give them a tight deadline to respond.  If, for example, a proposal request comes in that is outside your typical boundaries but attractive to the sales force, have them do due diligence and report results to you.  When you have a key issue to solve that involves multiple functions, quickly assemble a task force and have them lead it up.  Give them room to work, but insist on regular (sometimes daily) follow up sessions.  Do most of these 1:1 so you can coach as well as get informed.

It’s incumbent on you to not accept the first idea – not every idea a growth leader creates is going to be golden. Keep drilling in and leading them to think even more deeply and specifically.  Ask numeric questions from a couple of viewpoint;, examine strategy and tactics from a granular and high level – in other words cross up your line of inquiry.

Know that your best growth leaders may need time to think and may not be as verbal as some of their extraverted peers, so keep that in mind when considering the ideas and input you receive. Deadlines that allow some time to process are invaluable learning situations. You may also find that individuals who are quiet in group meetings may open up in a one on one setting, so mix up your formats to ensure that you’re getting the best from your group.

Lastly, don’t shield them from the complexities of the business issues raised by their out of the box thinking – maturity is formed in confronting the reality of what exactly a new line of business means for the company and workers. You should ask for careful impact assessments on current operations and staff before committing to any course of action.  Teach them to think very critically and design small, survivable tests to confirm the unknowable.

3) Keep standards high

One of the key things to motivate this type of leader is to set the bar high and keep it there.  You do the emerging leader no favors by backing off on an important objective, or rolling over to financial pressure that compromises quality or performance.  In meeting these demanding requirements (and make sure they are requirements) your growth leaders will perfect their craft.  Creativity in performance constraints is the forge where amazing personal growth occurs.

When they do step up to delivering to demanding requirements for an emergent market, these lessons will be the foundations for breaking through the inevitable issues and concerns of their team and the customer.  When you have done a good job of emphasizing persistence and attention to detail, you will be surprised at what can be accomplished. High expectation and high support environments are critical to the creation of high performing, talented staff.

We have only begun to touch on the key ways to challenge and retain your talented, cross functional talent.  What tools or techniques have you used?  Please send me a note or leave a comment below.

It turns out that while some business model work is done top down – most of it originates from an enlightened middle of the organization.  Who are these new franchise players and what do they do?  Short answer – they help you find and stay in the Growth Zone. (see link on top right)  These leaders are able to draw on experience and personality to guide the organization in ways that most top executives can’t.  What is it that these individuals have that others lack?

They See the Big Picture

Growth leaders usually have broad experience in their careers and seek it out early.  They tend to be people who like to drop into a functional area, master it and them move on to the next function.  This is driven by a passion to learn and a hunger to understand how all the puzzle pieces fit together.

In my own case, I was a mechanical engineer in a company known for its electrical engineering expertise.  I had a graduate degree in materials and fracture mechanics, allowing me to think differently.  When I became a business director I was able to hold the deep technical needs of our customers next to the shifting economic needs of moving from vertical integration to an OEM model.

Growth leaders are insatiable learners and ultimately this will lead these individuals to interact with either customers or partners or both.  Spending time in the parts of the organization where economic commerce takes place is very valuable, and is one of the key pieces of experience to look for when evaluating whether to support someone as a growth leader.

Their cumulative experience allows them to understand the enterprise from top to bottom.  With support from their organization, they can have an understanding of the company and in much the same way that an air traffic controller can see both the movements of individual planes and the larger ebb and flow of air traffic.  Having this support and experience allows them to communicate empathetically with other organizations and customers, which in turn allows them to tease out the finer points and requirements of customer needs. They will also have a good set of starting-point questions to drill deep and know when someone is giving them a line of well-crafted fiction.

They Ask Big Picture Questions and Communicate Visually

Growth leaders lead visually – they sketch Business Model Canvases.  They draw ecosystems on white boards.  Instead of working with the status quo, they ask “what’s possible?”, envision the possibilities and work from there.  They invite collaboration and give the organization a clear picture.  They build the bicycle as they ride it.

Using metaphor to bring simplicity to a complex discussion is the hallmark of a growth leader.

When you get a meeting and someone totally resets the expectations by asking a grounded ‘what’s possible’ question – you may have just found a growth leader.  The same curiosity that takes the growth leader on a horizontal path to gain experience comes hand in hand with a tendency to ask questions that are significant and challenging.

Good leadership will see these questions as useful, both to shape the understanding of the person that is asking them and to provide pathways for improvement that may have not been apparent.

Some leaders find people that ask these questions to be challenging to lead and see them as disruptive.  The better approach is to recognize that positive dissonance is the energy that leads to change. If the questions being raised are missing some insight or lead to other hard questions – make those apparent.

They Build Coalitions

One of the other attributes of a growth leader is that they are natural coalition builders. They are constantly refining their mental operating model of the enterprise. By sharing their observations, opinions and questions, they build a cumulative set of relationships that can quickly form into a change coalition.  A growth leader will know where the best talent in the organization is, what the points of resistance to a given change will be, and how those individuals might be able to be persuaded to not only participate in, but advocate for a given change.

An example – when the economic recovery act money was released, the organization I was part of needed to quickly produce a solution that was oriented to the smart grid market.  I was tasked to pull together researchers, product engineering, systems engineering, marketing, sales & distribution into a high functioning unit to deliver products and solutions.  This charter was assembled and sold to management, the team was assembled and delivered its recommendations something like 100 days.  Ultimately, we built an effective solution that proved to be useful and profitable.

What’s the value of all this?

Simply said, effective growth leaders are valuable because:

• They give voice and form to changes the organization needs to make to experience growth.
• They are master communicators, and can quickly and concisely nail the customer need and the organizational response.
• They use tools like narrative, business model maps and financial analysis to communicate changes to others in the language that makes the most sense.
• They manage up well, and know how to engage a group of senior stakeholders as sponsors and air cover.
• They build diverse, effective teams, held together by common objectives and understandings.
• They build financial models that lead to large new profit pools.

A growth leader has perseverance and confidence to see the process through, a keen eye towards execution. They are conversant with Project Management, but their scope is significantly larger than a traditional product line extension – as they usually need to open the hood and rewire the business model.

Sound too good to be true?  It’s not. Evolving organizations who consistently reinvent themselves instead of blowing up have known how important this function is for years.  Now that we are facing a new economic reality, its time to find, nurture and cultivate this role once again.

What are your experiences with being or working with a growth leader?  What attributes or capabilities do you see as most important?

Please send me a note or leave a comment below.

Finding someone with just the right combination of qualities to lead a growth project for your organization can be tough. To make matters worse, they can be hiding right under your nose in the most unlikely places.

The search for under-the-radar growth leaders is not unlike the story of the Detroit-based musician Rodriguez — while his U.S. career wasn’t quite adding up, he had become an icon of the South African anti-apartheid movement without ever knowing of his success. This unsuspecting rockstar had all the talent, charisma and tunes he needed — but his audience was half-way around the globe.

Your next rockstar growth leader might be  languishing in a similar manner, but this article will help you identify them and rescue them from obscurity.

A rockstar growth leader is:

• Someone who can grab the reigns of a major cross functional team, charter it, staff it and get results.
• Someone who sees the customer as a person, and with rich experience, who knows how business happens in your organization.

Rockstar growth leaders come in three varieties:

• Pre-discovered
• Discovered
• Re-discovered

Type 1: Pre-discovered

Recognizing great growth leader talent before they have had their breakthrough requires a keen sense of observation for three reasons:

1. Potential growth leaders rarely show up on the list of functional leads because they are much more interested in cross-functional learning.
2. They are very likely to be introverts, since their best work demands high levels of independent thought, perseverance and highly developed intuition.
3. They are usually very good at staying off the radar, since that is where they get to do their best work.

So how do you find someone who is good at not being found?

Would-be rockstars are best found by getting to the bottom of unexpectedly good results from an operating team.  Did one of the business teams just best a competitor for a major account based on tweaking a product line?  Was there a favorable change in operating costs that was unexpected? You may be seeing the as-yet undetected the influence of a budding growth leader.

Who to look for:

• Anyone who willingly crosses organizational boundaries out of innate curiosity for knowing how the whole enterprise works.
• Someone that relishes being sent out to customer calls, even the contentious meetings, since they know that’s where the real understandings are.
• The person the sales staff asks for by name when they have an issue in the field.
• People who have a sense of cautious adventure, who view life as learning and seek to broaden and embrace new things.

More than likely, when you find this person he or she will be a self-confident individual that seeks out hard problems and rotations into other functions early in their career, allowing them to develop deep intuition about an organization and its capabilities. This is what gives them a very keen sense of risk and organizational capability, which will be essential when they take the reigns of an important breakthrough program.

Type 2: Just Discovered

Just-discovered types often become apparent to mid senior management when the chips are down and some major customer centric event needs to be addressed. Suddenly this below-the-radar guy or gal is on everyone’s screen — and will be for some time.

It is at this point that management needs to make some shrewd decisions, because growth leaders are inherently change makers.  If you put them in operating roles that require optimization and predictability they will quickly grow weary.

The number one way to lose these individuals is to accept mediocrity.

Rockstars don’t easily tolerate environments that don’t require their best. Very good organizations recognize this and feed these people a steady diet of high stakes change work across the organization.

The second most common path that leads to loss is not to keep them on the hottest program in the organization — if it’s big change they need to be given the ball.

Type 3: Re-Discovered

When a rockstar change leader takes on a growth challenge and sees it through to its success or failure, it’s not uncommon for them to enter a less active stage of their career.  If their venture was successful, they may find themselves caught up in overseeing the day to day details of transitioning the new idea into a stable place within the company.  If their venture failed, they may take on a lower key role elsewhere to recuperate and find their feet again.  After a period of time, they will likely be ready and looking for the next complex, high value opportunity that they can form into a breakthrough challenge.

Task your HR team with keeping tabs on these dormant growth leaders so that they are not unknowingly spun out with a divestiture or poached by a competing organization.

If you must give one of these folks up, be sure to have a good alumni program in place that allows their impact and mentorship to remain in place as much is operationally feasible.  Bain Consulting does a great job on this front.

Keeping your growth-oriented bench strength up is one of these ways I know to keep your organization innovating and your results headed northeast.  I’ll be writing more on growth leaders and would very much like to hear your experience and observations.  Please send me a note or leave a comment below.

I was meeting with a colleague this week and we were commenting about the relative rarity of meeting with people who have truly done their homework prior to holding a discussion.  How many times have you met with someone who is clearly “winging it,” and starting with the sketchiest of intentions?  We used to call this the “call a meeting to plan a meeting syndrome”— and it’s a time and productivity killer.

Time is our most valuable commodity.  

When we ask someone to share it with us, we need to make sure we are showing up with fresh ideas backed by actual research — not a few hunches and a hope that someone will come up with the connections.

What does good research look like?

1. Research starts with a clear intent.

“If you don’t know where you’re going, any road will take you there.” ~George Harrison

Sometimes the musicians know how to say it best.  Whether in life or in a meeting, if you don’t know where you’re going then you’ll end up wherever the strongest personality in the room wants to go.  Since that may not be the outcome you want, you need to do some thinking beforehand to set a few goals and intentions.  Ask yourself some questions:

• In one sentence, what is the goal of the meeting?
• What is the best possible outcome of the discussion?  Is the scope of responsibility of the people I asked on track with the meetings highest purpose?
• Have the right people been invited?  Do they have the ability to implement if the goals of the meeting are reached?
• Who needs to contribute to this besides the principals who will be present?
• Can I get this outcome without a meeting?
• Is there need for a pre-read prior to this discussion?

2. Research is done best with an open mind and a clean sheet of paper.

Many have found that the best way to do this is to step away from your normal environment and to go somewhere that stimulates some new thought.  This could be the local coffee shop, a bench in the mall or under a tree in a park.

Pull out a pencil and start writing and sketching.  Mull on these questions:

• What is the goal you’re trying to reach?
• What is the simplest path to getting there from here?
• What has happened prior to this point in time?
• Who or what is the point of greatest resistance to your hoped for outcome?
• How can I work most effectively on that?
• Who knows about this stuff from an unrelated field?
• Who is the most out of the box person I can talk this over with?

3.  Get out of Google

Traditional Google searches can can draw us to a pretty shallow pool of well worn digital space.  Unless you’ve taken steps to prevent it, Google’s algorithms use your browsing history to eliminate results from your google search before you even have a chance to see them.  Marketing teams have SEO’d the keywords you are likely to use to assure that their content and products are high up in the results.  The irony is we have this enormous pool of information, and the world is conspiring to serve up only small portions of it.  There is a lot you can do to avoid these pitfalls digitally, but the simplest way is simply to go analog.

• Go to a library – yes really.  
  • Go to the reference desk and ask them for what you are looking for.  Modern librarians are very (very) skilled clinicians –  and they have databases and search tools that you cannot afford.  I can’t recall the last time I didn’t learn something amazing in this process.
  • Go to the book stack in this genre and grab an armful.  Look at the indexes, browse the right chapters and study the figures in all of them.  You will quickly come to know the basics of common and uncommon viewpoints.
• Ask someone totally unrelated to your work about their view.
  • Talk to the cab driver – yes the cab driver.  Sometimes they have a view that is gleaned from listening to 100’s of smart people talk on their cell phones – and oh by the way –  stop talking on your cell phone in cabs.
  • Talk to the guys on the loading dock.  Grab some donuts and coffee and walk in through the back door.  You will learn a lot.
• Go the local college campus
  • Check out the campus bookstore.  What are they reading and teaching about what you are interested in?  Who has the latest publications in the faculty sections for your area of interest.
  • Walk around the academic department and find a professor who is in their office.  I have never been turned down and rarely disappointed with these discussions.

You get the idea.

4. Understand that research moves in spirals.

If you do the above, I guarantee you the that you will revise your topic sentence from step one, which will then open new lines of thought in step two, thus prompting more research in step three.  Somewhere in this process you will hit the top of the learning curve for effort and payback. Only then is it time to call a meeting.

When you finally do have the 1:1 or lead that meeting, you are going to blow them away.  Preparation is an uncommon activity these days – and a huge opportunity.

Make a decision to stand out.  Do the homework before you hit the keyboard.

What are your best research techniques? Please send me an email of leave your thoughts in the comments below.

This is the sixth and final post in my summer series is intended to help you map your external and internal environments and let you hit the ground running after summer vacation.  If you have missed any of them, you can find them here – and don’t forget to enter your name and email at right to get my biweekly update on leadership, growth and strategy.

To recap, we have found that the external environment is understandable and runs on very long, predictable waves of discovery and implementation.  By studying these change waves you can time your investments to be in the Growth Zone and not on the bleeding edge.  We have laid a foundation of understanding the internal cycles of growth and renewal that all organizations go through as part of the natural cycle of growth and development.  By understanding the cycle you can avoid sending your team on a premature cycle of innovation and coordinate internal growth with external change, keeping your organization relevant and profitable.

Today in our final post we bring these ideas together with a tool for keeping innovation rich  and productive.

Agility is the new normal

The strongest organizations going forward will be sending well prepared probe teams into forward-looking areas of market and application to provide direction and growth for the entire enterprise.  These teams will be cross-functional, tightly scoped and highly self-directed.  Their high-level role is to discover what we don’t know that we don’t know, using a technique first described by Joseph Luft and Harry Ingham in 1955 called the JoHari window.   (For further explanation & application of Johari in principle listen to Les Mckeown’s audio on strategy )

Real options, a discipline revived in the mid 90’s, is the conceptual tool of choice to rank the options for growth.  The core tenet is that an organization’s value is predicated on its existing cash flows (and businesses) but also the cash flows it can access through incremental investments in new endeavors.  The real options tool allows organizations to configure their business models into cash flows and probabilities of their occurrence, based on the most skilled intuition of the analyst.

The knock on this approach has always been that is extremely hard to accurately model these in analytic financial terms.  The uncertainty of the inputs rapidly overwhelms the validity of the outcome.

There is good news, though.  The recent work of applying lean principles to this thinking has flipped this issue on its back.  We now know that the key to overcoming this is using lean startup techniques to de-risk the hypotheses through carefully designed experiments.  Stanford has some good work in this area, recently articulated by Steve Blank at South by Southwest. (There are two twenty minute videos, worth the time to watch in full.)

The key learning: Start ups are not little businesses, they are tools to de risk the business model.  Blank argues that standard, large scale business roles such as sales representatives or product managers are doomed to failure in an environment where basic definitions such as the customer profile and value propositions are changing on a daily basis.

Startups are business model discovery machines, not little business operations.

The bottom line is that current best practices for startups and probe teams are focused on measured and purposeful experimentation to discover facts and prove or disprove hypothesis in the proposed model.  The end goal of these actions is to determine the emergent business model – which is a very different set of practices than executing proven business plans in a proven market.

When you have a powerful portfolio of projects and programs that have been shaped and tested, you truly have rich and deep value – and a sustainable enterprise equipped to deal with the future.

The Growth Leaders’ Action Plan

6 takeaways from this summer series:

1) Improve your observation skills and keep notes

• Keep a rolling list of ideas, and update it often.
• Maintain another page for data and observations – text chunks and links.
• A great way to do this is with a shared Google account using Docs or Drive.
• Consider Evernote for capturing real time updates.

2) List your emerging ideas and strategies

• Form business hypotheses
• Begin high level value mapping using real options techniques
• Chunk the business models down to expose core assumptions that need validation

3) Design purposeful validation experiments

• Use business model mapping and find the gaps in your best ideas.
• Come up with a list of key things that you don’t yet know for the positive hypothesis you have come up with.
• Design a reasonable experiment to go and de-risk that assumption.
• Start with the biggest leaps first and then proceed down the list.

4) Build tiger teams

• Give them very clear mandates and limits to keep them focused on de-risking.
• This is fieldwork – get outside the walls of your organization and talk to suppliers, customers, editors and end users
• Do NOT fall in the trap of breathing your own bus fumes.

5) Pivot as required

• Take a very sober look at what you have learned.
• Be willing to change approach as necessary.
• Repeat steps 2 & 3 with the pivoted model.

6) Build the beta team

• Only once the hypothesis is 80% cleaned up
• Size the beta team carefully and control its cash burn rate.
• The deliverable of this team is the scalable business in its minimum viable state

In other words: Synthesize, Analyze, Select, Learn and Scale.

I hope you have had a restful and insightful summer.  I enjoyed writing this series and look forward to hearing your observations via email or in the comments section below:

This is the fourth post in a series to amp up your ability to see and exploit massive external change waves.

Up through this point in the series, we’ve looked at how to map and forecast change cycles that are happening in the world around us. Going forward, we’re going to look at what an organization can do internally to capitalize on these insights. This post marks the shift from external understanding to internal actions.  I firmly believe that most major issues in programs are made in the first few hours of their life.  Those early decisions are very important, and depend on having a good team and solid commitment in place for the project.

For this post, I am going to focus on the human structure needed to carry out the change.  In other words, I am assuming at this point that you have clarity around objective and scope of the work that needs to be done.  If you need a bit more background on planning, please take a look at this post on getting clear on team objectives.

Meeting the change wave begins with a team

Insightful analysis only profits the organization that takes the risk and commits resources to harness it.

Pencils down – planning complete.  Now it’s time to invest in the human resources and organizational tools you need to deliver improved profitability and growth opportunity for your investors and employees.  You need to build the breakaway team that can land on the next island of profit, then establish and nurture a new center of growth.

Over the arc of my 30 years with Fortune 100 players, I’ve observed patterns that provide a map of the murky territory before us.   Once you have clearly articulated the challenge, outcomes and benefits, the next thing you need to do is put together that breakaway team.

A breakaway team that can create an outcome that scales is more in demand than ever, but change leaders, beware. Many well-intentioned efforts to send a team out to harness change waves do not work. This is because when well-intentioned change meets a resistant, embedded culture, usually the culture wins.

What follows are the five key elements that will plant and water the seeds of new growth — and give it the muscle to hang on for dear life as these change waves take off for shore.

Organic step change is about crisply and intentionally building new internal capability to deliver either a new product to your current market or a your current product to a new market.  Done well, the new revenue flows will dramatically increase your sales and profitability.

Here’s what you need to start a process of organic step-change in your company:

1 – The Leader

Every change team needs a well-grounded, visionary leader with the ability to “manage up” and the persistence to execute.  This person needs to be an expedition leader, not a tour guide.  He or she should be the best company has in three quadrants: vision, people and results with a track record of making solid intuitive decisions. They need to seamlessly move across organizational boundaries and develop rapport quickly. They should know the “system” and be able to use it, but have the common sense to work around it as necessary. This person attracts good team members and has access to the top ten players inside and outside your organization. Finally, they should be promotable since, if successful, you’ll want to recognize them and place them in a position of more influence.

Don’t make the mistake of choosing the person who likes to play with shiny objects as the leader if they don’t have the basic skills.  The right person is likely the highest potential individual on your staff, someone you can see in your chair.  Don’t make the mistake of thinking someone is too busy to take on this role, always ask him or her and be willing to find someone to take over what they are doing now.  If you don’t do this, you run the risk of your best candidate jumping ship down the road.

For further reading on building great teams my colleague LesMcKeown‘s work on the predictable success based teams has more great insights on this topic.

2 – The Senior Team

Truly organic change also needs senior team that recognizes the need to continually move the business to new models with higher option value. Corporations are constructed from multiple profit centers that are either acquired or grown internally.  The strongest pull inside corporations is investing in the core value proposition because it’s well-traveled territory and forecasting ROI is usually a linear correlation.  But the processes that got you to your current state won’t propel you to new profit centers.  Entering new territory requires developing new ideas and systems.  If you would like to study the breakthrough process more deeply, pick up a copy of The Breakthrough Company.

The true role of a senior leader is guiding the organization to new markets, products and solutions that keep the organization vibrant.

New profit centers in growing organizations are planted on purpose.  Intuit Software is a solid example of planting serial value propositions. The company was founded on DOS-based Quicken, made several quantum leaps to Windows, Mac and then the web. Turbo Tax was a great portfolio addition that required a large shift, and finally as the small business market was booming, so did Quickbooks. These were not linear steps, but leaps that were intentionally chosen.

It is the responsibility of senior leadership to create the culture and provide the guidance to take the risk to move from one island of productivity to the next.

3 – The Air Cover

New ideas need effective air cover from the day-to-day demands of the existing enterprise.  Very good academics have documented that planting a new value proposition inside a business is a full-time job.  You need to have the best and the brightest members of a lean team waking up every morning to move this work forward.

The senior team needs to run the breakthrough activity with a different set of leadership structure and incentives.

• Set the plan and let the team execute.  Agree in advance with specificity on the outcomes that engender success and give the group late latitude in how these are completed.  Provide disciplined, regular high-level reviews where all stakeholders get an opportunity to review progress and recommit.
• Do not over commit funding and investment until you have systematically invested in removing risk.  One of the big mistakes is to set up a large team predicated on success of the full effort, assuming that the critical path issues will be resolved.  A much better plan is to focus all your resources on the critical to function problems sequentially, setting very specific investment limits.
• Keep the usual overhead of the core functional organization off the field in a make-sense way. Things like lengthy customer acquisition processes, quality systems, and financial systems enhancements need to be set aside.
• Be a blockade removal tool as necessary.  The core organization will test management’s resolve directly and indirectly.  Make it clear that tradeoffs need to elevated and resolved quickly.

4 – Leanness

This should be a lean team, with a very specific role for each team member and a minimum of management.  These teams are addressing complex change issues and the communications need to be clear, simple and direct.

In large organizations these initiatives can attract non value added managers like moths to a flame.  Management needs to be strong and present to keep the team small —  but at a minimum-viable level.  A good model for a medium-sized program is to establish the leader by finding the best player-coach on the team, and then establishing a “mini Board of Directors” made up of the sponsoring senior leadership team.  This mini BOD needs to include all areas of organization that would be affected if the new business model runs to completion.

Once the above is done and a plan is completed, the leader needs to be allowed to recruit the best talent available to participate on the team. This will be hard, but consider that getting a top team is the first proof-point to success.  It speaks volumes to the rest of the organization if the staff of your breakthrough team is not the best of the best.

The maximum size of the team, even for very large projects, should be capped at 150 (Dunbar’s number).  That has been shown to be the largest organization that a very strong leader can guide and maintain razor-sharp effectiveness.  One team I spoke with has the two-pizza rule – if it takes more than two pizzas to feed the team, break it into two groups.

5 – Commitments

The seeds of change require a commitment of resources that go beyond simply financial for a sufficient duration to ground the new value proposition in the existing structure.

• This is a time to be lean, but not stingy.  You need to pull your best growth-oriented people in to lead and contribute to this effort.  It will be painful at first, but the dividends will be huge — you will find that if the depth chart in the core business is robust your best and brightest will be energized like you have never seen before.
• You need to give the team the tools they need. If they need consultants, find them. If they need lead customers, make sure sales opens the doors. If you need new skills, use your own network to find them. If the option value is high enough, make the investment.
• There will be a dark night of discontent. They will hit a wall, and your resolve will be tested.  It’s at this time that you and the men and women that are part of the team will grow the most.  Nine times out of ten you will find your way through, or in the rare case you cannot, you’ll likely find what lean practitioners call a pivot into the right next step.

Building change muscle in your organization may be the best investment you ever make.

You have the analysis tools to understand the external change waves your industry is in, and a high level road map to build a team to capture them. Next, I’ll go into more detail on internal growth and renewal and the final post in this series will tie the waves together: matching your internal change wave to the external change wave.

Are you finding useful insight here?  Please drop me an email or leave a comment below.

Everyone wants to transform, but nobody wants to change. — Frederica Mathewes-Green

Right now, there is a dynamic at work in your organization preventing innovation — ideas are getting lost in translation.

In technology-driven businesses, there are two functionally and physically separate teams: the one that does the R&D, and the operations team that turns technology into a product to take to market.

When I was running the R&D portfolio program for a Fortune 100 company, I was charged to facilitate the transfer of technology from the R&D lab bench into the product operation. There was usually some intense resistance to accepting validated research from R&D into the product group. I would often see two groups of very talented people locked in a vehement argument about why or why not the researched product change would or wouldn’t work.

Different teams, different pressures

There is real value in tapping into those tensions and facilitating shifts in viewpoint.  A breakthrough program can transform a portfolio and perhaps a company.  What is the Post It Notes business worth to 3M, or microprocessors to Intel? If tension is allowed to restrict innovation, friction ultimately costs your organization time money and energy that could be much better spent.

But too often it can be like watching travelers lost in a foreign land who were trying to communicate with the natives: it was fruitless and frustrating for both parties. When two camps are incomprehensible to each other, they just get louder and more entrenched and get nowhere.

The reason conflict erupts at these team boundaries is because each faces different risks and pressures. For example, the product design people are under deadline and cost pressure, while the manufacturing engineer is under conversion cost and and quality pressure, and sales just needs to hit the numbers.  Put them all in a room with a proposed innovation and watch the mayhem begin.

So how do you get everyone on the same page?

The power of “boundary objects”

What is needed in these situations is a “boundary object”. Boundary object is a sociological term to describe something that has meaning on both sides of a boundary and that can be used to facilitate communication. This is a common ground from which communication can start.

For example, if the lost traveler needs to locate a business, pointing to the image of its logo can easily get the cab driver pointed in the right direction. The logo is a boundary object.

I was at an MIT program where a program manager for the military described an application that has stuck with me for years. He was charged in taking manufacturing costs out of a fighter jet program.  He described the lack of progress that occurred for months as the design team would roll out large full scale drawings of the airplane in meetings with the manufacturing team and the heated discussions that would ensue.  He described this ineffective ping pong game and his personal frustration.

Finally, after a long stretch of this — he had a breakthrough thought.  The project manager called his next meeting in a hangar with a live aircraft.  He had equipped the meeting with rolls of butcher paper, tape, markers and post it notes.  The productivity of the meeting soared. For the first time, there was a 3D object to point to, have discussions about, and leave notes on — an object both groups understood.  The avalanche of breakthroughs began, and they more than made their goal.

Characteristics of great boundary value objects are:

• It can be described in a shared language. For example, when you see teams invent a new language before your eyes – real communication is starting to happen.  One of my favorites was when a cross functional team started to use the term “form factor” to describe positive attributes of a design.
• Provides a concrete way for individuals to identify their differences and dependencies.  e.g., reducing the number of parts by using standard fasteners makes the manufacturing so much easier, but must be taken into account very early in the design process or it will drive a huge delay in design.
• Facilitates a process where both parties at the boundary can jointly transform their knowledge.  This is one of my favorite things to be part of – for example, when a brilliant researcher and engineer come up with something that is so elegant that neither would have anticipated.  An example of this kind of shift is the move from drum to disk breaks — an improvement in costs, parts count and performance all in one step.

Transformation: the key to high-value transactions

The key to high-value transactions is transformation: the point where two bodies of backgrounds and experience come together and develop a new, shared understanding. I’ve had the experience of being in the room the first time that a paper design has become a prototype — a tangible form — hundreds of times, and it always a cleansing, almost surreal moment for the team.  While many surrogates are used in the design process, there is nothing like the touch and feel of the user interface, heft of the device or speed of operation in real life to solidify deep understanding and feedback.

Let me give you a recent example. One frequently overlooked parameter when using remotely-controlled cameras is latency, the time between when a command is sent from the control center and an action occurs on the remote camera. I was reviewing an installation that was rendered unusable because the feedback loop was so long that the operator would overshoot both ways attempting to focus in on a point of interest. By bringing together a network designer and the operator, they found that a few point-to-point wireless links were all that was needed to make the system useful again.

Truly agile organizations value this rich input highly, and go out of their way to make sure that the work teams gene pool is sufficiently deep to bring out these new and insightful views, and ultimately raise the bar for the organization.  They get the end user involved early and don’t allow their concerns to be overlooked.

Really good business cases do this for an organization, one layer removed from the actual product.  Great business cases have narrative, analysis and pictorial representations that allow each key stakeholder to evaluate the effect of the investment in that product or proposal from their unique viewpoint.  A well-crafted business case is essential to seeing the innovation happen in the organization.

Have you put the innovation prevention department out of business?  Please share your thoughts below.

© Marvel Entertainment, LLC

The much-awaited Avengers movie is due out this summer, based on the 1963 Marvel Comics series about a group of superheroes teaming up to defeat evil — Iron Man, the Hulk, Thor and Captain America among them. I have fond memories of going to the drugstore to buy some of those issues. I was especially fascinated by Iron Man and the idea of a suit that could make a man fly — the beginning of my lifelong fascination with both aviation and engineering.

If you have been reading this blog, you know my predisposition to look for the top ten percent team members — the ones that truly make an organization run. The way Steve Jobs put it: if you were going to a new planet to start your company over, and you could only take 100 people, who would they be? Those are the people you want on your team — your Avengers.

The reason the Avengers story is such a fascinating one for business leaders is because it’s about a group of exceptional people using their extraordinary skills to achieve a common goal.

Power alone isn’t enough. No matter how many superheroes you assemble, their powers are worthless to you if they’re not the right ones for the task or if your heroes are at odds with one another. Great teams need smart leaders.

Choosing your Avengers: Strategy

Which superpowers will we need? When you’ve got a project in mind —  a villain to defeat or an innocent to save, you need to decide which skills and strengths are the most important. You may need the vision that Iron Man brings with his ability to fly at 30,000 feet and as an operator that can drive things to completion. You may not need Thor’s hammer, but you may well need a financial modelling ninja, who can keep track of the business case and make sure it stays together.

Superheroes only function well in their areas of strength. While Captain America has amazing feats of endurance, he is human.  He needs to avoid bullets just like the rest of us. In working on a breakthrough project, be aware that your visionaries are rarely persistent enough to drive the details and certainly not the ones to lay the process tracks.  The reverse is also true — assigning a super detailed processor to the task of strategy usually results in burnout and stress.  Building a team with talented people also means that you have big egos to manage as well.

Understand the context of the coming battle. Each of our superhero comic books takes place at a specific point in history with its own challenges.  There is rich study of how history plays into the comics.  Do you understand the fabric of the place, time and space in which your project will playout?  Will it be fought out on store shelves, on the internet or with a procurement process?  What resources do we have?  Items here include funding, management support, competition, urgency and positive and negative sides of the outcomes.

Gearing up for action: Motivation

Know your fellow superheroes. This is much more that reading LinkedIn profiles, it means reading between their lines. Which achievements did they choose to list?  When did they experience the growth and pivotal events that elevated them to to be a decision maker and leader? What are some potential weaknesses? What is their hometown, sports team affiliation or charitable cause?  This will allow you to put yourself in their shoes and create analogies that resonate with them. For example, if you have a team member who was a swimmer in college, and you need them to push through the last 10% of the project, they understand what it means to “reach for the wall.”

Superheroes are people, too. What’s important outside of business hours: family friends, some key event or achievement? What do they do when they’re not out saving the world?  Are your team members raising a family, completing a degree or perhaps volunteering their time at a worthy not for profit?  All work and no play makes for very dull superheroes.  Sharing these completely human moments builds team cohesion in a big way.

Develop a good plot. Paint a detailed scenario and give it a solid title or aim. In the heat of the battle it is easy for team members to easily begin to develop sub-agendas and having a focusing sentence and analogy keeps things on track.  To give you an example from my background, when I was doing work in the area of connected vehicle safety one of the stickier metaphors we used was that we were making “cars that can’t crash.” We had a tongue-in-cheek concept sketched out of two crash dummies lamenting the day that they were put out of a job by advanced vehicular safety systems.

Saving the day: Execution

Engage your audience. Every good comic book helps its readers become invested in the story by sharing bits and pieces of back channel planning and strategy.  Suspense builds when the reader has background of which the central characters are unaware. Outline those insights that will allow your stakeholders to commit fully to the outcome. Let them know you have thought deeply about the plan, and you are looking for them to contribute to it, that you need their best to succeed.

What happens when the flying suit runs out of power? No battle plan survives the first shot, and no business plan can anticipate all that will need to be done to execute it.  This is where heroes are made, and their expertise challenged, expanded and grown. This is where your leadership will be tested as well. Can you pivot, rapidly replan?  Hold the line even though it’s tough?  Capitalize on advantage when it presents itself?

Who is the villain and what role does our team play? A good comic discloses the villain’s super powers layer by layer. It takes a strong villain to have a great story, and how the business team leader frames the challenge is important.  In my earlier example of vehicle safety, the villain is death. Improve the system, cut fatalities and we all win.

Help team members pair strengths and weaknesses. Captain America does not have x-ray vision and deflect bullets, but he can use his shield in amazing ways. If you have an amazing statistician on your team, don’t send them to do an interview on a hostile customer. Team complementary skills together.

Bring the party to you. Do what you can to make sure the work comes into the team in a way that allows them to use home-field advantage — the environment where their superpowers are the strongest.  Remember the man-behind-Iron-Man Tony Stark’s workshop?  If you have an amazing R&D facility, use it as the context for your project — they call them war rooms for a reason.  Bring in customers, competitive products, journalists and anyone else who can help them. Give the team the air cover it needs to do its work — be the buffer and give the management briefings and do other overhead related tasks.

After victory: Reflect

Regroup before planning the sequel. Resolving well is an overlooked phase. Many times in business we start the next big project before we reflect on the outcome of the one we just finished.  One of the powerful ways to build culture it to have what the military calls an “after action review.”  Capture the learning — what did we anticipate well?  What surprised us?  What process or tools would we change up for the next time.  Who did a great job and deserves a timely reward?  Who needs some more development work before the next battle?

Do these things well, and you’ll be on your way to having your own superhero adventure.

See you at the movies!

One of the great things about the technology business is that you invent your company’s assets by harnessing the global brain power of your enterprise. At the end of 2011, Strategy+Business published their annual survey of the 1000 companies in the world that spent the most on R&D. What they found has important implications for innovators who want to outperform their peers.

S+B found that spending more on R&D did not equate to increased financial performance.

This study represented $182 Billion of spending — these are the biggest and the best companies. How could there not be some effect?

The expected output of more spending would have been a waterfall of new and innovative products emerging from these companies, yet from this large statistical sample, this was not the case. In engineering, we call this decoupling. The analogy here is from electronics — when the interaction between two circuit elements are so weak that they do not pass energy to each other they are said to be decoupled. In this case, when more spending in R&D fails to result in passing “energy” to the cash-generating operating groups of the business, its a very big deal.

So what is driving results? An excellent OS.

S+B pinpointed the pattern of success to a combination of culture and alignment. Specifically, this means creating a culture consistent with the overall innovation strategy of the organization. Think of this as your company’s operating system (OS). The S+B researchers grouped respondents into three different OS types:

• Tech Drivers: These companies drive innovation via technological achievement. By design, this is the least pro-active at engaging the customer.
• Market Readers: These have a fast-follower strategy, and favor a “baby steps” approach via small, low risk projects when possible.
• Need Seekers: These organizations strive to be first movers by pro-active customer engagement

The upshot? Need-seeking is a highly profitable OS.

Need seekers far outperformed their peers in both enterprise value and profitability. Need seeker’s live to find what I describe in my ebook as the Growth Zone. This is the innovation area where customer information is mined to find your next set of product requirements.

The cultural attribute that drives need seeking is openness.

It is openness to ideas from customers, suppliers, competitors and other industries. Many organizations find that once they open their research filters to look for the “aberrant” customer requirements, there is customer investment, which has already largely validated the business case for the next product. Finding and capitalizing on these emergent needs leads to high ROI’s and efficient market discovery.

Need seeking creates highly-correlated business cases for the organization to build into.

It is much easier for the enterprise to make the necessary investments when all the stakeholders can read the well documented needs of key customers and see how meeting that need will result in a well received and profitable new event. It relieves the R&D team from the tyranny of never being able to “sell” their project to product operations teams.

Need-seeking is what gets you from breakthrough to breakthrough.

There is a time and a place for tech drivers to revolutionize the industry and take the customer to a place they never imagined. Bell Labs took us there, Noyce took us there. It is difficult to capture the impact of the integrated circuit in a year-by-year survey. Somewhere on the globe, a group of researchers is developing the next enormous industry inflection (for instance, in biotech). Between these seminal peaks, there is much value for the need-seekers to capture.

Upgrading your OS: the culture-strategy connection.

Over half the companies in the S+B survey reported that their innovation strategy was misaligned with their business strategy. Need seeker companies, on the other hand, had innovation strategies that were driven from the highest levels in the organization. This emphasis naturally led to a highly coherent agenda of innovation between research teams and product operations, allowing extremely efficient utilization of research resources.

What does this mean for leaders?

It means getting serious about the culture-strategy connection — in many cases your organization’s OS may not be functioning at it’s best. Here are four ways to give your company’s OS an upgrade:

• Culture trumps investment, so invest in culture. There are certain capital-intensive or highly-regulated industries that will always require larger investments to play, but a remarkable number of industries are now more accessible to disruptive startups than ever before. This means that culture is the differentiator and should be built as carefully as any other intellectual asset.
  
• Take the alignment between R&D and the rest of the organization seriously. There is tremendous value in managing this boundary well. Invest significant time in moderating the discussion between your research teams and product teams there will be a tremendous payoff. Too small to have in house R&D? No issue, in this day of open innovation, there is solid research and lessons learned from the open source community that can help you get engaged.
• Endorse some decoupled efforts. There are times when the R&D team must pursue an agenda different than the business team, such as when passing through market inflection points as described by Christensen et. al. These times should be the exception and not the rule.
• Get everyone on the same page. When you have locked in your innovation agenda talk about it everywhere and all the time. Talk about at all hands meetings, in your written employee updates and newsletters. This will allow everyone in the organization to make great trade off decisions – key to new product cycle time.

Culture is a high-stakes balancing act.

Every day the operational team makes key tradeoff decisions. The manner in which those decisions are made reveal the true culture, regardless of what it says on the wall in the conference room.

There will always be strong tensions between researchers and product operations personnel — they have distinctly different missions and motivations. An overly-aligned R&D lab becomes a very expensive product development operation. A decoupled R&D lab might as well be a university. Keeping the agendas and egos sufficiently aligned and in service of the customer’s needs is a knife-edge balancing act that requires constant calibration.

OS upgrades are always a big event and are sometimes disruptive but they’re also essential and worth it — if you’re upgrading the right systems. Enterprises that do this serially build massive value for their participants, customers and shareholders — be one of them.