Imagine this scenario: a small plane takes off in a gorgeous mountain area at a lower altitude with the intention of doing some sightseeing and begins to explore the upslope scenery. While taking in the beauty and enjoying the day, some subtle things are happening that reduce their safety minute by minute. First, the higher the altitude, the less power a traditional piston-powered airplane makes, so if there is a sudden need to climb, the power just isn’t there. Secondly, higher altitudes and tight bank angles create a situation where the stall speed (when a plane loses lift and falls) increases, making it increasingly difficult for them to turn around.
With the pilot too busy exploring the sights, these two factors are compounding quickly. Many pilots have flown too far upslope and have been forced into making a tight turn around to escape and wind up impacting the trees (with tragic results).
This can also happen in the “too busy” organization.
This is the 5th post in a series answering the questions around the five key reasons that firms defer on starting valuable work. If you’d like to start at the beginning, look here.
When You’re Too Busy to do Innovative Work
This scenario usually presents itself in organizations made up of very bright people who have built businesses by making very smart decisions that are independent of the market they got started in. In doing this, there becomes a “welded in” culture of confidence in the firm’s internal focus and intuition and their ability to make the right resource trade-off decisions regardless of the markers that may be flashing yellow.
Usually in these firms, all their resources are “sold out” to the existing business model. Since they don’t have a powerful business model view of the next adjacent product that will take off (we rarely do), they can’t make a truly strategic choice, and instead opt for quadrant 1 (existing product, existing market) of the Growth Zone product market matrix.
I’ve had the privilege to work with leaders who have carved out a very plausible next step, but when presented to the operation’s management, get pushed back – typically because of the team being more confident in their own intuition than data and insight brought in from clients and the supply chain.
In defense of these management decision makers, the dominant business model always predicts the highest probability outcomes – until it doesn’t. Just as the pilot flying upslope just as tacitly assumed that the aircraft and flight were not in peril, these leaders don’t see that the safety factors for their business model have eroded.
This erosion is quite subtle and easily missed. It usually shows up in a launch or two that doesn’t return the development investment. When this happens at first, the leadership team shrugs it off as poor product feature choices or poor partner performance.
When you come back later, you almost always find that the market is sending you a signal, but in your bias, you were missing it.
So What Can we do?
- Listen carefully to the full leadership team – Surprisingly, some of the best early warnings teams get are from their CFO’s. It turns out that when you look carefully at the by product (or service) P&L’s, you can spot declining ROI pretty quickly and objectively. Just as a sharp pilot will begin to feel mushy controls and a reduced rate a climb, the CFO will see lower returns as a really important issue and be persistent until it’s solved.
- Set up a Red team / Blue team exercise – I have helped teams take a step back and design their perfect competition – that is the competitor that could completely take them out of the running. Surprisingly this exercise can release candor and openness for the whole group to honestly consider whether the next increment of spend should go to the new service or to the maintenance of the old business line. Just as a firm co-pilot can ask the captain the hard questions, setting up the “loyal opposition” and taking it seriously can get you to take earlier action.
- Create a culture of deliberate immersion – Leadership teams that take themselves out of the building and purposely seek out best of breed experiences outside their market perform much better in making these kind of decisions. When running strategy center work, I’ve come to appreciate just how important it is to bring relevant outside examples to the sessions as viscerally as possible. Getting the key leaders of your firm into other firms (in many cases, well outside your core), can lead to significant openness to new branches of lines of business.
In each of the 5 cases of deferral, the leadership team makes a reasoned choice to set aside investments based on a premise that a non decision has at worst a neutral outcome. Experience tells us that this is simply not the case, and in fact time is the most important non-renewable resource we have in our firms. Just as the pilot in the opening story assumes that the flight will continue and they have options before them, these leaders are opening themselves up to the erosion of their opportunities – and a sudden disruptive reversal.
If you recognize eroding safety margins for your firm, the good news is as long as you’re still in the air, there are actions you can take. To get started, please give me a call at 847-651-1014 or use this link to set up a 20-minute (no strings attached) consult.