SCOTT PROPP http://scottpropp.com Equipping the individual, team and enterprise for growth leadership Wed, 21 Jun 2017 08:00:05 +0000 en-US hourly 1 https://wordpress.org/?v=4.7.5 From the Practitioners: Five Takeaways from the SCPD Conference http://scottpropp.com/from-the-practitioners-five-takeaways-from-the-scpd-conference/ Wed, 21 Jun 2017 08:00:05 +0000 http://scottpropp.com/?p=3776
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Augmented reality was one theme at this year’s conference

Picture a group assembled under one mantra: accelerating innovation.  It would be an eclectic group of industry leaders, thought leaders and others who make their living building value.  Mix in equal parts of dialogue, interaction and new experiences.

That’s what the SCPD (Society for Concurrent Product Development) conference is all about.  Set each year at the 3M Innovation Center in St. Paul, Minnesota, the event brings together leaders from around the world to hear challenging talks, listen to provocative panels and build new insights at the intersections of their work and the insights of others.

Given this background, let me share five provocative takeaways from this year’s 16th annual event:

1) We have reached “peak accelerator.” In their zest to become home to (or retain) their best and brightest, many communities have invested in the creation of new business incubators.  Included in these is a combination of collocation, mentoring, network building and investor exposure.  Through his research, Brian Abraham pointed out that we have more of these than the market can absorb, and in fact the real metric of sustainable businesses being created is going the wrong way.  In other words, while acceleration experiences are useful, they are not preparing groups for the long road ahead – much like a conveyor belt with a gap in the middle.

This teed up some insightful dialogue from later participants about their journeys, and how they used a combination of their day jobs, early contract wins and the shrewd use of scarce resources to get across this no man’s land.

panel2) Those best sellers are not helping. In a fun moment, Santiago Vallejo put up a slide with a number of the innovation best sellers on it and did a hand raise on who had read what.  The punch line was: “and none of these is useful to the corporate innovator.”  His point was that while books are filled with ideas and stories, it’s in the hard work of integrating and applying them that the real value is created.  

3) Your job is to edit your team. Mike Bollinger did a great job of sharing with us how he has built a great culture at LiveFront, with the insight that it is up to us to be constantly shaping, releasing and focusing our teams.  So many times we tend to dive deep, when what we really need to do is step back and make sure we have the right focus, the right team members – and have set the context up well.

4) Visual capture need not be pretty to be effective.  Jeremy Kriegel walked us through a number of exercises designed to prove those of us wrong who say we can’t draw.  The truth is that simple sketch visuals are the key to releasing lots of energy and new ideas in a team.  By stepping up to the whiteboard, we can bring order to chaos and represent the conversation in a very useful and transportable way.

5) 60% of “IOT” programs stall at proof of concept.  Jen Nowlin of Accredent delivered a great talk where she exposed a lot of the unspoken truth about doing Internet Of Things business case work in established firms.  The powerful insight is that if the business case is not compelling and very strong, when it is time to put real
weight into the work (i.e. Proof of concept and beyond), the work stalls.  This is a good note to all of us who practice in this area to not underestimate the need to create powerful momentum around these programs.

I’m hoping you have some provocative conferences on your agenda this year.  We can all learn from one another, and the need to create value has never been higher.

If you’d like to talk through how to improve your enterprise, team or individual strategies, it all starts with a 20-minute virtual cup of coffee.   To get started, give me a call at 847-651-1014, or click here to set up a no-strings-attached phone call.

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Becoming an Amazing Growth Leader: Building Strong Connections with Your Peers http://scottpropp.com/becoming-an-amazing-growth-leader-building-strong-connections-with-your-peers/ Wed, 14 Jun 2017 08:00:18 +0000 http://scottpropp.com/?p=3767

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It’s that moment.

It’s among the hardest things that growth leaders need to do.  After discovering and validating a new product or service (which seems like the hard part), they need to bring the people on board that can help scale and integrate the offering.  This is the point when many strong and well-built new services wind up getting put on the “technology shelf” while we “make the quarter.” 

It turns out that the internal sell is actually harder than developing external demand.

Why is this?  When you are doing something new in the firm, when you approach anyone with a need or an ask, it looks like an absolute side road that is at best a distraction.  It’s on you to be able to set the context and make the case of what’s in your mutual interest.

If you are the project sponsor, there is a delicate balance to be struck: you want to keep the team sheltered from heavy and restrictive demands that the larger firm puts on business units, but also have those same business unit leaders accept the new offering when it’s time.

A Surprise

In my coaching work with growth leaders, I use a term called the “connection fraction.”  My working definition is how much customer value is produced for every dollar spent in R&D.  It is not uncommon for firms to leave 40% of the R&D spend on the table by not getting the full cycle complete – that is getting that validated product and service all the way through their firm and into customer’s hands.

In my own product leadership experience, I was privileged to spend years taking projects from R&D and forming the connection through the firm to an appropriate market.  In getting several major wins, and some equally painful misses, I was able to hone some tools to complete this work, which I have now built and shared through my consulting business.

The surprising part of all this is that, while technical and product market fit issues abound, they are almost always solvable.  

What isn’t obvious at the outset, is that organizations are connected horizontally with weak forces . Click to Tweet

The introduction of new products and services stretches these weak forces and in many cases, progress stalls.

Leading Growth is all about Forming Great Lateral Relationships

There are four essential competencies of a Growth Leader.  Even the strongest growth leaders usually fall short in two of the dimensions, and by doing the work to shore up those areas, we are able to improve their ability to move the work forward.  

When you are getting ready to scale, the competency that is tested is what I call the Champion, and specifically, the role of influencer and diplomat.

Let’s drill down on three skills that help us release our hard-won research into customer hands:

1) Bridge Building – Growth Leaders who get to scale have the most unlikely relationships.  If they have a background in research, they may be best friends with the technical operations or manufacturing team.  By taking the time to invest in getting to know their upstream and downstream peers, many practical issues of scale are completed with much less  friction.

The fundamental, but usually missed in practice skill here, is that these relationships have a subtle and unseen mutual agreement.  That agreement is that the work we do is high value and serves our firm in a bigger way than our individual or functional agendas. By forming this agreement and routinely honoring and creating value in it (R&D on call for a production issue, Manufacturing creating some “beta prototypes”) these weak bonds get strong.  When it’s time to do a heavy lift, the pathway already exists.  True story: our team was once challenged by a client to deliver a fully-integrated system on site in ten days (which through normal channels would have been months).  By having these relationships in place, we were able to get it done.  More on that here.

2) Understanding we all have unique pressures and expectations.  Each function in the firm has different languages and sub metrics that can make this very challenging.  Sales has a number to beat, marketing gets paid to source qualified leads, production gets measured on everything, but primarily on the value delivered per day against cost it consumed to deliver that value.  The key to forming these great relationships is to take a walk in the other person’s moccasins.  Knowing that it’s impossible to get something into the production line the last week of the month is only possible when you know what kind of pressure your peers are under.  By doing this you can avoid asking for a heavy lift, when with a little planning, you can make it work smoothly.  

Second true story: early in my product development career, I had an engineer come in over the weekend to make some updates on some “special” customized units.  What I didn’t know is that he broke protocol badly by climbing the stockroom fence, making the changes to the units and then returning them to stock – with no paperwork.  Needless to say, I had a very interesting voicemail  with lots of adjectives and adverbs on Monday – along with a coaching session for my associate.

3) Being really clear in our communications.  When you work across the firm, you need to up your game in asking and listening.  Each group develops its own communication protocols and vocabulary, and anytime you make a request or set and expectation, you need to use the practice of asking for exactly what you need – no more no less.  A common area of contention is on budget – who is paying for the labor, materials, commission, shipping and a host of other items with P&L impact.  By developing the insight to have these specific items decided and ready to go, you won’t inadvertently throw your colleague under the bus by having them do you a “favor” that puts them in their boss’s office.  The second point here is to be clear that this is “early stage” and we expect some gaps.  By giving everyone a heads up, you won’t tarnish the reputation of your fledgling product or service.  

Final story about the impact of doing communications well: we had completed at great expense, the run of a new-to-the-world device that needed to be halfway around the world in a few days.  When it came time to pack them, both teams realized that no one had revised the packaging to be able to use our very robust logistics channel.  Long story short, those units had their own airline seat, and one of our production leaders got his first trip to a new country.

It’s in the white spaces, between boxes on the org chart, where the real work of bringing vibrant product and services to the customer is done.  If you’d like to talk through how to improve your “connection fraction,”  it all starts with a 20-minute virtual cup of coffee.   To get started, give me a call at 847-651-1014, or click here and set up a no-strings-attached phone call.

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Business Unit Leaders: 3 Unconventional Ways to Access Your Hidden Growth http://scottpropp.com/business-unit-leaders-3-unconventional-ways-to-access-your-hidden-growth/ Wed, 07 Jun 2017 08:00:51 +0000 http://scottpropp.com/?p=3758

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It’s that moment.

It’s when you are given that target for next year, and suddenly you feel a tenseness in your upper back.  It’s the “stretch goal,” and if you were doing athletics it might be fun, but in the context of your P&L leadership, this is a goal that if you miss it, the consequences will be real.  Meet it and you grow your team, generate bonus pools and maybe get a new job.  Miss it and you’ll be reducing your “costs,” slimming down your team and looking into a reduced role.

I have come to call the distance between organic growth and your target as “the gap.”  

The gap is the shortfall that you experience when the pace of your year-over-year P&L growth falls below the organic targets that are expected by your shareholders and senior leadership.  Most firms set an overall objective for the upcoming planning cycle, and then decompose the needed business results into sub-goals that are given to the P&L leaders as their targets.  Each of these goals then becomes that standard by which your performance will be measured.

In the middle of my manufacturing operations career, I was tasked with leading a product group that had enjoyed fantastic year-over-year performance, and then had fallen on much tougher times.  The senior team had set some very challenging goals, and frankly there was not a lot of patience to improve performance.  We had some new product on the drawing board, but nothing that would be ready to move the needle for some time. Because of this, I learned quickly how to find areas that would unlock some value pools that were embedded unseen in the firm.

So where do you dig in?  Well you may be tempted to call R&D and press them to move up all the dates on that new product or service.  But what I’ve learned, is that there are systematic, proven and repeatable pathways that can give your R&D team the time to do their work right, and still meet your needs for business results.

Keep in mind, that If you have this challenge, you need to be committed to make some dust.  

 

3 Ways to Unlock Your Hidden Growth

Run rates of teams are deeply ingrained and established over a long period of time, and you need to show up with your best diagnostic and influence skills to make progress.  Once you’ve made the shift and have the ability to connect with your team and acknowledge the mutual challenge that you face, you can use this list of ideas to activate some work to find the needed upside.

Issue #1: Your sales and distribution team works in “a zone.”  

If your firm has established channels, it’s a very good bet that the distribution team has settled into a pattern of serving those clients they know best, and have reduced their efforts in winning new leads that they don’t believe you can serve. We humans are pattern-making machines, and since it takes 10 times more effort to win the new account, the average distribution team will self select existing over new.

To go to work on your sales “zones,” you need to either go yourself, or bring on a skilled surrogate who will get out to the front lines and see what the value transfer and new client development looks like.  This involves deep customer interviews, forensic work at trade shows and conferences, and a look at substitutes to your current offerings from outside your market.

This work needs to be approached with a very open mind, as you will find great insights in the most unexpected places: for example, a radio shop leader in an influential transportation department was instrumental in opening up a large business niche by being a highly-engaged beta partner.  Through careful listening and a mindset of releasing new, mutually beneficial value, very significant new margin can be found.

In my case, we found that our successes had moved us to “farmers:” those sales teams who are good at working existing clients, vs “hunters” who are able to find a new path and client.

Issue #2: Your existing business metrics are hiding growth in plain sight.

I worked with a client who rigorously reported their market share using a vetted third party to deliver the data quarterly.  The reports always showed that they were in the top 2 for every category that they surveyed.  You know what’s coming next, right?  There was an adjacent product category that was a substitute for their own product that was not on their radar. And when it came out of their “blind spot,” it had revenues and margins that were eclipsing their own.  This other firm went on to develop a public market cap of a billion dollars, while this client remains a small fraction of that.

On the metrics, you need to periodically develop a completely fresh, organic view.  There are always ways to get an unbiased look, and by hiring people known for stepping out of the box to review the structure of your data collection systems, you will save yourself getting blindsided by another firm.

Issue #3: Your people are only bringing you a small slice of “what’s going on” in your market space.  

It’s not that they are doing it maliciously, it’s just that you have built systems that provide direct pipelines for information that confirms the “as is” strategy and path that you are currently taking.  Your customer service people are not bringing you requests for strange prototype offerings.  You are not looking over the returned or terminated products or services to find the deep whys until they exceed a certain threshold.

For your internal “listening,” you need to get exception reports in place – set up systems that absolutely bring all the crazy requests and unusual returns to your attention quickly. Either make the phone call yourself, or have a trusted right hand aid find out what’s up.  I have personally found multi-million dollar markets using this technique.  Best-in-class firms set aside time to receive minority reports and seek disconfirming viewpoints.  

In my example of the product line I was working with, there were several new low volume, high margin businesses that were lurking in that data. And frankly, we found enough margin to keep the team intact.

These are examples of pockets of potential growth that exist in nearly every firm.  The harder news is that it takes real work to access them and to get the potential growth to show up as real dollars and cents on the P&L.  Each of the above opportunities sits inside a well protected pocket of human behavior and established systems, and you need to go to work on creating new behaviors through cycles of insight, application and follow through.

The good news is that every one of the above actions will make your business more robust and will help you to be a better leader, as well.  If you found this conversation valuable, and would like to talk about how to access this growth potential inside your group or organization, it all starts with a 20-minute virtual cup of coffee.   To get started, give me a call at 847-651-1014, or click here and set up a no strings attached phone call.

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Key Insights From the Front Line: Top 10 Takeaways from the Global Water Leaders Summit http://scottpropp.com/key-insights-from-the-front-line-top-10-takeaways-from-the-global-water-leaders-summit/ Wed, 31 May 2017 08:00:13 +0000 http://scottpropp.com/?p=3748

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Water is the new key to security

I just had the privilege of attending and leading a panel at the 10th annual Global Water Leaders Summit held in Milwaukee on May 23 & 24th.  This year’s big idea, “A Secure Future Needs Water,” brought together thought leaders at the heart of water security strategy.  This was my first opportunity to join the gathering, which was attended by more than 200 people from all walks of the water industry, including large industrial firms, policy makers, technologists, academics and industry consultants.  There was a nice balance of powerful moderated panel discussions, informal discussions with very interesting and rich viewpoints, and vendors with a diverse array of services and products.

My official role was to lead an innovation panel that showcased two fantastic young entrepreneurs, (see their firms here and here) and unpack how their work intersected with the main conference theme of water security.  We had a dynamic discussion of the challenges of being an entrepreneur in the water space (think high regulation and slow adoption rates), as well as how their work in IoT and point-of-use water conditioning brings transparency and empowerment to the consumer who is then able to make more informed choices.  We wrapped up with the shift they both hope to bring to the conversation of how to make global access to clean water possible.

Here are my top 10 takeaways from the two days:

  1. panelThe re-use business is exploding.  Underscored by Snehal Desai and Emilio Tenuta, the new target for facility water use is zero net new water for large public and private facilities.  Harnessing this technology provides pathways for the growth of firms globally (that otherwise would have been capped by regulations), and has become a surrogate for good business practice.
  2. Water problems are not “me” problems…they are “us” problems.  You cannot fix water problems without a sense of community.  The creation and supply of water used to be a lowest cost game: people who run the utilities are dialed into providing their constituents with the lowest possible cost.  In the new view of water as a scarce resource, it has become very important for the dialogue to shift to a sustainable supply first, followed by cost second.
  3. Water issues are surrogates for government issues.  It’s actually a corollary of the above that when there are deeply entrenched water issues, those serving as designers to create and divide public assets have failed their constituencies.  The tricky bit is how the size of the group is worked out: see points 1 & 2 above.
  4. Only 1/10th of the world has 24×7 drinkable water on demand. Best-selling authors, Seth Siegal and Charles Fishman provided a rich global perspective based on their in-depth research.  A surprising percentage of the world lives with intermittent or low-quality water that is either supplied according to a regulated schedule (i.e, water in Mexico is switched off over the weekend), or through a patchwork of local resources (i.e., India).

  5. The US has made progress on usage. T
    he US has moved from 100 gallons a day per person to 89 gallons per day in the last 15 years, and that has allowed growth in areas like the desert southwest without increasing consumption.  In many cases, industrial consumers are meeting their expansion needs with zero net new water.
  6. We need better information on where we are using water in industry. Measurement and tracking of internal industrial usage within the enterprise is the next frontier in water utilization improvement.  Andrew Hobbs of Ford shared a remarkable body of work that has reduced the amount of water it takes to build a car by over 70% based on major changes in their plants and a substantial change to their painting processes. To make further progress, he shared that they will need to know much more about how much is consumed within the walls of each plant.
  7. Water is at the root of many regional and international political conflicts.  It can also be a huge tool of conflict resolution.  Key examples that were discussed include the Arizona area, Atlanta area, Iran and Israel/Jordan.  We had first-person accounts of the amazing negotiation journey from people such as Kathleen Ferris, Uri Shani, Lisa Downes and Stephen O’Day.
  8. panelHaving a real action plan for disruption is key.  Brad Ives reported a journey of interruption for the entire university of North Carolina Chapel Hill campus and hospital. You’ll find more on that here.
  9. Many incentives are inverted and conflicted.  Low-cost water has led to high usage, and there is a perverse incentive for each regional participant to not conserve prior to coming to the negotiating table, since they want to have a large starting position to anchor the negotiations to a higher absolute number.  Nearly every major urban center could find 30% reduction on conservation alone.
  10. Water security demands both cyber security and physical asset security. Caitlin Durkovich, Tom Kuczynski and Kevin Morley participated in a panel that was equal parts scary and insightful.  Rarely included in water conferences, the panel nicely put into perspective the uphill challenge for water infrastructure.  There are two major networks: the control side, commonly termed SCADA, and the business operations network.  The security of the physical assets is scary enough, but when we allow employees remote connections to the operations via broadband, we have just opened the “fences” to infinite global dimensions.  The consensus of the panel is that if a bad actor wants control of your assets, they will find a vulnerability. The role of the operations team becomes that of fast follower emphasizing, agility and response

The conference was ably facilitated by Charles Fishman as a series of lively, in depth conversations. The format was single room, and very conversational – no long Power Points allowed.  Rich Meeusen, CEO of Badger Meter, MC’d the event with wit and operational efficiency. This is not easy to do, so congrats the The Water Council for doing it well.

If you’d like to talk about the intersection between technical & business model changes in water space, please give me a call at 847-651-1014, or click here and set up a no strings attached, 20-minute phone call.

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Business Unit Leaders: How are you Doing at Breaking Out of the Box? http://scottpropp.com/business-unit-leaders-how-are-you-doing-at-breaking-out-of-the-box/ Wed, 24 May 2017 08:00:49 +0000 http://scottpropp.com/?p=3742

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As usual the real learning was in the application.

I was in Denver a couple of weeks ago with a group of colleagues for some strategic development and planning.  As part of our work, one of the team members set up some offsite time at a popular “escape room.”  In case you haven’t heard, these are all the rage; you and your team find yourself in a fun, well-designed puzzle room with a challenge and sequential clues that lead to a conclusion and allows you to “escape.” Of course you are competing with the clock…and in our case another group of colleagues, as well.

I’ll tell you how we did a little later. First I’d like share how much the process involves the same work we do with firms to help them find new markets that allow them to apply their strengths to earn higher margins with less competition.

Let’s start by talking about boxes.  We human beings are pattern-making engines.  We drive to work the same way every day, set our coffee on the same spot on our desk, and put our pencil in the same place in the drawer.  We have a calendar full of the same meetings, calls with similar customers, and trips to similar clients.

The reason for this, is because we simply need patterns to survive and thrive.  If we needed to do everything new every day, the cognitive load on our brains would be exhausting.  Patterns allow us to put a whole lot of life on autopilot so we can apply our fresh thinking to a small list of those areas that will give us good, fresh results.

In business, we tend to build and reinforce the same products and services to the same clients and customers, which leads to specialization around those tasks and activities.  We get so good at these specialized tasks that they suddenly become as important as the reason why we did them in the first place.

We promote these specialists, not so much for their creativity, but for their ability to bring efficiency and reliability.  This makes sense because our stakeholders like repeatable predictable returns – and who wouldn’t.

You’ve probably already gathered what this really does is build a “box.” Not only is this box a resilient one, but it’s hard to break out of as we are all cross connected around a tight “mission,” and work hard to eliminate distractions.

So guess how this plays out in the “escape room.”

Pattern Matching

When we are first put into a new space what is the most natural thing to do?  It’s to use the skills and patterns that got us here to help us get to the new place…“empty our pockets” so to speak of our individual skills and abilities and apply them to familiar patterns.  It was fun to see how we all did this: the IT person sat at the computer terminal, the operations person took inventory and the creative examined the photos, objects and artwork.

In business, this happens all the time when we are presented with a competitive threat.  We call our session, sit in the same chairs and build a solution based on the same patterns that are so familiar.  Most of the time it works well. However, eventually we get into the same thing that happened in World War I: even though enormous amounts of manpower were being consumed, both sides stubbornly competed at the same front, with the same tactics for months, with no progress.

Decoding Random Data

Well, back to the room.  We heard a teletype like sound, and a clue arrived on the terminal.  It was a helpful bit that allowed us to begin decoding a part of the room in a new and unique way.  It took all of us to do it, and once complete, we put the answer in the terminal and got the next bit.  It was remarkable how a snippet of data could allow us to focus and make progress.

In our businesses, random data bits come in every day.  I can guarantee you that after doing this for a while, the vast majority of these disconfirming clues are lost in your firm.  It’s not that you don’t have great people, it’s just that our human need for similar patterns pushes us to ignore and defer working on anything that doesn’t fit.

Retracing our Steps with New Insight

The deeper we got into the puzzle, the harder it was to use the clue and get the answer.  Our individual strengths became much less useful – even distracting at times.  We needed to have conversation, throw out insights, and describe what we saw (and how it might be useful).  We needed to have people who were integrators and were able to restate, allowing us to draw connections that none of us had seen.  Many times we needed to back up and try again.  This is a messy way to make headway, but oh so effective in finding our way with new challenges.

In business, when we need to find that new market, many times we reach those points when we hit an impasse.   The way forward is frequently a step back to reexamine our assumptions that got us to this point and do some careful focused experimentation.  By setting aside a small group and some focused budget, we frequently can unlock insights in a new way.

The real power to move forward comes from working as a group to unpack these insights, and having the trust to listen to one another’s observations…candid insights that only come from great relationships.  Great teams meet choices, put muscle behind intuition, and pick up on small but important threads that point the way through.

Those Times When it Gets Tense

I don’t mind sharing that we are competitive group, and we love to win.  We fought like family, and laughed like children.  We also saw people in new ways with new skills, and rich backgrounds that we didn’t anticipate.

Inevitably, when a business takes a new path, there any many significant hurdles that remain once the initial insight has been produced.  Finding the challenge and stamina to see it through is a key skill and need.  Ultimately, the firm moves from one box to another – we call this “unfreeze and “refreeze” based on the childhood playground game

So, Did You Make It?

Why yes, we did…and with only minutes to spare on our 60-minute target.  Did we best our colleagues in the adjacent room?  Sorry, sworn to secrecy.

Pulling it Together

A few takeaways from this experience:

  1. We all like patterns and they serve us well – until they don’t
  2. There are clues in your firms that are not being collected or acted on
  3. You will initially want to apply individual strengths and competency to finding the new space, but only collective group work will help you find it
  4. Once you find it, you will face resistance… and you need to keep the prize in sight to establish it.

If you are a P&L leader that needs to find that new box to complete in, we should talk.  I’ve spent decades helping teams through these challenges, and have assembled many tools and techniques to allow your team’s competence to accelerate the formation of new value.

You’ve probably gathered that there are a large number of process details, decision-making methodology and facilitation know-how that go into doing this well.  If you’d like to have a deeper dive on how this all works, give me a call at 847-651-1014, or click here and set up a no strings attached, 20-minute phone call.

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Growth Leaders: How to Punch Above Your Pay Grade http://scottpropp.com/growth-leaders-how-to-punch-above-your-pay-grade/ Wed, 17 May 2017 08:00:12 +0000 http://scottpropp.com/?p=3738

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If it wasn’t real, it could have been off a movie set.

I walked and walked…past the administrative and waiting area and inside the office.  I had never seen anything quite like this: enormous inlaid desk, conference table, glass cases full of expensive travel artifacts and carpet so thick you had to be careful not to scuff your shoes when you walked.  I had been “sent upstairs” by my Director, and I was at least five grade levels the junior of this senior leader whose office I had just entered. Yet, here I was.

Yes, I was the canary in the coal mine.

What got me here was an automation project we had been working on day and night for the past nine months. The project revolved around a badly needed process upgrade for a critical product line.  The prototype work all looked good, and we had negotiated with all the vendors to be able to meet the deadline.  All we needed was the final sign off, which was why I was here.  You see a few days earlier this project was brought up in a Corporate level review and summarily shot down because of capital “budget” issues.  I was on a mission to revive it.

I learned a lot that day….

  1. Never let something important be mixed into a meeting where it will be seen for the first time.
  2. When you’ve done your homework, you don’t need to be afraid to have the chat.
  3. Everyone has operational perspective. By not seeking it early, you deny yourself insight.

Now, for the rest of the story…

After hearing that the approval was not complete, I asked my boss what had happened.  Apparently, the tight, 10-slide deck that I had produced had been pruned down to one because it was to be discussed at the end of an all-day strategy review for worldwide manufacturing operations.

Because this project had an overseas destination, it needed to be reviewed by nearly a dozen people including both domestic and destination design and manufacturing.  We had done all that, but had not counted on the global head of all operations needing to be in the loop, too.  This was when being in the back end of a contentious day took its toll and he summarily and clearly told everyone that this project was now dead.

3 Lessons in Developing Vertical Influence

#1: Never let growth programs get mixed into operational review sessions for the core product

I had seen some strange outcomes, and this one just seemed to be way off from rational, so I asked my boss if I could set up a 1:1 with the leader who had nixed the project.  As I recall, he said something like “it’s your funeral”, which I took as a yes.  I was a bit surprised that this leader took the meeting, as he was notorious for being inaccessible, but I took that as a good sign.

The scene above played out and I was invited to that beautifully inlaid side table to talk.  As I went to roll out my drawings he stopped me.  “How much time have you spent overseas?” was his question.  I was able to share a number of recent onsite visits, as well as people I had conversations with.  A faint flicker of hope started in my mind.  He asked me many very detailed and specific questions about exactly who I had talked to, exactly where these devices would be used, who would maintain them, whether there was strong local vendor support, and more.  The more we talked, the more our relationship developed.

Finally, I unrolled the plans.  His only comment was this, “You are using way too much floor space. Cut your footprint by 20 percent and you have my signature.”

#2: You don’t know what the real issues are until you have walked a mile in your “roadblock’s” shoes.

It turns out they were driving a worldwide floor space utilization program and had a huge (financial) stake in making it a success.  No one had shared that with us.

So, we went back, burned the midnight oil, got the footprint down, and delivered the units – and ultimately the product – on time.

#3 – These issues were on me – every darn one of them.

When you are doing new things inside a large firm, EVERYTHING you do is going to be an outlier.  When it’s time to go to management – and we all do – it’s our job to make the case.

How does this help my development and coaching for Growth Leaders?

  1. Build programs more robustly. When you go to scale there is no such thing as having too much information about the impacts your new product and service will have on the whole firm – with specifics and deep detail.  The only way to get this kind of information is to take the initiative to go and get it. Meet the people and see the eventual locations – this is as true for B2B as it is for B2C.
  2. Build communications protocols that get the right information to the right people.  The only things more robust than your design needs to be your communications plan.  When you do new, you need to be prepared to go to the top of the house.  After all, you never know when you’ll get called into the C-Suite and need to compete for resources with other senior executives in the firm.
  3. Get pre-approvals based on performance benchmarks.  This is gold, and took me a long time to figure out.  Sales leaders call it the presumptive close and it goes something like this: if I am able to do X, X and X, do we have a deal?  If the answer is yes, confirm it in writing and then do it.  If I had done this earlier on this project, much high-wire grief would have been saved.

Doing new is hard (and rewarding) work.

If you are leading a new-to-the-world event in your firm, and would appreciate a neutral voice who has the scars to show for the real-world experiences I’ve had, we should talk.  Give me a call at 847-651-1014 or click here to set up a no strings attached, 20-minute phone call.

Related posts you can benefit from…

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The Trouble With Moonshots for Existing Enterprises http://scottpropp.com/the-trouble-with-moon-shots-for-existing-enterprises/ Wed, 10 May 2017 08:00:13 +0000 http://scottpropp.com/?p=3730

launch

It was a quest of nearly mythic proportions, and I had a front-row seat to the action: allow anyone – anywhere – to make a satellite-based phone call.  The program was dubbed Iridium (named for the 77th element when initial calculations showed the need for 77 satellites). It was conceived of in the 1990’s and took until 1998 for the first call to be made.  Once commissioned, it was clear that the business model had shifted over those nearly 10 years and the only way it would be resolved was to go through a very visible shift as documented in the book Eccentric Orbits by John Bloom.

I’ve seen this play out time and time again: the press and investors clamor for glitz and $1B dollar impacts and our boards ask for big moves.  I can almost set the clock by it; the calls always come after the First Quarter’s operations review when it becomes apparent that the core products and services aren’t going to make forecast.  Suddenly, there is intense interest in identifying something new  – and something now.

Many very good leaders have gotten pulled into an unfortunate cycle of chaining the success of their innovation agenda to the success of one big project (or moonshot).  Moonshots have lots of issues:

  • They consume a lot of fuel. For example, connecting vehicles has been around for more than 20 years. Patents have come and gone for the early investors and volume production is still a long way off.
  • They are hard to steer.  They are very hard to keep focused, because it’s very hard to measure progress.  How do you report to shareholders that multi-million dollar burn rates are moving you to a pay back?
  • The real issues tend to be obscured.  When you drill down on all visionary work, there is always one (or more) besetting issues; something that has held off the application for years.  Many moonshots don’t talk about these issues, because they are not the kind of thing that leads to press releases.
  • Buzz is prized above learning.  When you are running an enterprise moonshot, you are under constant pressure to create press, meet with analysts, and declare progress.

Big moves come from a portfolio approach of consistent and persistent work.  Consistent innovators know that calling which nascent experiments will be a success or failure is very hard.

The truth is that businesses don’t jump across chasms. Every sustainable business move is a pivot of the core.  Sometimes it’s a small part of the core, but a thread of the firm’s DNA needs to be there.  When the only connection becomes financial, you need to really take a step back and understand how this fits the enterprise’s mission.

For example, I worked in a firm that rode two historic trends – Moore’s Law and Digital Communications –  through multiple business incarnations such as public safety radio, commercial radio, paging, cellular and federal government.  Moore’s law drove massive reductions in size, and increased the performance of the devices, while digital communication allowed precious radio spectrum to be used even more cost efficiently.  There two trends resulted in the supercomputers in our hands that we call smart phones.

Good innovation practice involves using what you have and taking your learning forward into the next business model.

So just how do you avoid the moonshot trap?

Here are some best practice tips:

  1. Run strategy sessions for maximum impact using tools that are inclusive, bring in outside viewpoints, and drive the executive team to a short list of robust choices.  Be very wary of locking in on “destination” programs that don’t have any strong starting competencies in the firm.  If there is no business unit home, that too is a competence that will need to be built.  Be sure to build senior decision teams with both visionary and practical participants to bring balance to the dialogue (see this post for more).
  2. Set teams up for success by using processes which set realistic expectations and risk profiles that are achievable. Be sure to release investments for programs in a consistent cadence.  Once you have a well-founded program, give it every chance to succeed by ruthlessly focusing on high-impact risk items, not mere numerical progress (there is more about this technique here).
  3. Build bench strength in your team members so that when cross-functional opportunities come, you can execute on them.  It turns out that through experience, there are four essential competencies of a growth leader (see post here).  By making sure that you are building those up and coming leaders, you’ll have the depth to do a portfolio and not just one high-stakes event.

You’ve probably gathered that there are a large number of process details, decision-making methodology and facilitation know-how that go into doing this well.  If you’d like to have a deeper dive on how this all works, give me a call at 847-651-1014, or click here and set up a no strings attached, 20-minute phone call.

Related posts you can benefit from…

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Avoiding the Siren Song – Making it Good Before You Make it Big http://scottpropp.com/avoiding-the-siren-song-making-it-good-before-you-make-it-big/ Wed, 03 May 2017 08:00:53 +0000 http://scottpropp.com/?p=3725

launch

I recall it clearly: the pressure to get that first “deal”…as well as the relentless pressure to fill “the funnel” even though we were in a very early stage incubator within a large firm where our revenue wouldn’t have paid for the yard care.

That memory came flooding back last week at a professional society meeting. One of the members of the group was talking to me about how after working tirelessly for 18 months, they had just gotten their proof of concept devices into real customers’ hands.  We talked about how magical it is to get that first customer’s tangible feedback. And in this case, it was a paid for beta run, so she put some commission money into the sales team’s pocket, as well.

In addition to congratulating her on the win, I gave her some advice which caught her by surprise. I told her she was about to enter the danger zone that exists in larger firms: the zone that comes with a validated new offering.  I shared with her that in addition to being a tireless champion, she just got a new role: defender and chief of the team. Her goal within that role was to help the team make the device great before getting buried in demand.

To be a growth leader in a firm, you need to negotiate a subtle detente to hold the big and perfect machines at bay until you have high confidence and metrics that you have the killer product or service.

It’s the bane of large organizations – the minute the proof of concept is done, the pressure to release innovation via the core product development system is overwhelming.

Why is it Wrong to Put Ship Pressure on a Nascent Product Team?

The issue is this: within the core product development system of a firm, the larger issues of product market fit have all been worked out.  The products are moving into a proven and substantiated market, where the price, feature and performance expectations are well known.  The distribution system knows, likes and trusts the firm’s products, and has expectations of how they will behave with marketing incentives and the like.

Contrast this with the young internal team, where product market fit and business model discovery need to be job one. There is much to be learned, and in most cases, it’s been a long time since anyone has had to do the pick and shovel work of determining market fit.

You as the innovative leader need to be the articulate firewall until you are 100% sure it’s ready to be given full scale.  This should involve lots of testing, with carefully chosen audiences to be sure it’s ready for prime time.

Once You Have Product Market Fit, Then Turn on the Optimization Engines

There are two big guns in the established firm that are your friends once you’ve zero’d in on the product market fit: the tools of scale and variation reduction.  A start up can only dream of having an operations team that can build a supply chain, construct the product and deliver it at a high level of quality.  Similarly, established firms have distribution engines, that at the minimum, can provide a blueprint for the new product or service, and hopefully serve to get you to market at a significant ramp rate.

So How Do We Do This?

As growth leaders, we need to be consummate negotiators with the internal team and set expectations carefully.  I find the STRIDE framework useful for making sure that everyone understands that there is a reality phase that we need to get through that will be messy and require investment.

Large firms are known for short cycling the “reality” portion of the cycle, and this will deprive the team of the rich learning, significant know how and intellectual property that is necessary for long-term value development.

Specifically:

  1. Find the sponsorship you need to be able to get a clean offering ready.  This means equal parts of champion muscle and protective air cover.  For ideas on how to do this, see here and here.
  2. Shape your engagements early.  When doing your customer proof testing work, begin to design your dream team of beta clients, and keep nurturing them.  Choose them strategically to test all corners of features and performance of your product or service.  You can do this intuitively, or employ advanced methods.
  3. Develop your competence sequentially for maximum impact.  When you are working on perfecting your early stage products and services, choose narrow specific segments to get great feedback that allows you to crisply work out the details.  When you have achieved the net promoter status for that group, move on to the next one.

You’ve probably gathered that there are a large number of process details, decision-making methodology and facilitation know-how that go into doing this well.  If you’d like to have a deeper dive on how this all works, give me a call at 847-651-1014, or click here and set up a no strings attached, 20-minute phone call.

Related posts you can benefit from…

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Innovation Sponsors: Leave This Seat at the Innovation Table Empty and it Will Come Back to Haunt You http://scottpropp.com/innovation-sponsors-leave-this-seat-at-the-innovation-table-empty-and-it-will-come-back-to-haunt-you/ Wed, 26 Apr 2017 08:00:30 +0000 http://scottpropp.com/?p=3721

launch

If you are on the board, a member of the C-Suite or a P&L accountable leader in a larger firm, there is a common blind spot when launching innovation initiatives.

I was reminded of this during a phone call with a colleague whom I did several large-scale breakout programs with while in an op’s role at a global firm.  We were going over the ones that “made it” and talking about the advice and insights that no one tells you in the literature.  There was one project in particular that started to show great signs of promise (and suddenly had the rug pulled out from under it) that provided a lesson that I make sure my current clients don’t have to learn the hard way.

The truth is, that without thoughtful engagement planning, your colleagues who smile in the hallway are (without knowing it) quietly and relentlessly undermining your innovation work.  They are not bad people – it’s what firms do.

First, a bit of context. To paraphrase Dickens, being a growth leader in an established firm is both the best of times and the worst of times.  When the firm chooses a new direction, it’s usually all in. In fact, it over commits (see a post about that, here). Having the full resources of the firm to call on to serve the customers in new ways is intoxicating.  However, working within the boundaries of the organization’s current processes and structures can be agonizing.

For those who do it well, harmonizing those two extremes is extraordinarily satisfying, and when looking in the rearview mirror, all the stakeholders agree it was the right thing to do.  Anchoring this point, there are benefits for the entire ecosystem: For the investors and stakeholders of the firm, discovering new, less competitive spaces produces financial vitality combined with access to new talent and thinking.  Second, the leaders’ careers are given new life when new channels for growth are opened.  Finally, a region’s economics can be profoundly improved by having successful constituent firms – and those that have serial successful growth programs are among the strongest.

So with those three benefits, why the internal tension?

There are two deep and pervasive drivers of resistance:

  • The first is the incredibly strong drive of human nature to form patterns and eliminate ambiguity.  We humans are pattern-making machines.  We drive the same routes, buy coffee at the same stores and put our pens in the same spot, in the same drawer, every day.
  • The second is that a firm subtly and overtly rewards results for those who deliver well on the existing engine of growth with bonuses, positive performance reviews and promotions.

When these are combined with the need for organizations to produce repeatable results for shareholders, we build engines of consistency within our business.

If we don’t have a dialogue about how the firms are best served by both investing in the core and new projects at the outset, this strong engine will be set against those who are working to bring in the “new.” It is surprisingly easy to inadvertently set up a competitive internal situation with the new investment, and when you do, it may be some time before you realize that your peers are “drilling holes in your boat” while you are doing your best to create new value.

The most often omitted stakeholder is the balance of the firm that is not part of the “core” innovation team.

So as a sponsor of  growth, how do you set programs up in the best possible way with the firm as a whole? Let me offer three suggestions:

  1. Set a tight playing field for innovation efforts.  One of the major concerns of business unit leaders that are not involved with the innovation team is that those leading growth are allowed too much discretion and aren’t managed for performance.  This can be mitigated by using a process that provides a specific “box” for innovation efforts to take part in with well-design “tranches” of funding to complete specific deliverables.  Within that box, the innovation team needs to be free to exercise large amounts of discretion (make wide the narrow road).
  2. Use a strategy process that drives collaboration.  One of the best ways to assure the senior team is on board is to build out your core and innovation strategies as one holistic portfolio.  This deals with the shared resources conflict, as innovation is not optional, but “in the plan,” with solid structure and good risk management (see this post for more on a process to do this).
  3. When you communicate in large group sessions, highlight the contributions of those who aren’t driving the innovation team, but who are making the investment possible with high-performing products and services that allow the innovation effort.  Second, highlight the risks and rewards of the work the team is doing, and encourage the larger group to contribute their best efforts.

You’ve probably gathered that there are a large number of process details, decision-making methodology and facilitation know-how that go into doing this well.  If you’d like to have a deeper dive on how this all works, give me a call at 847-651-1014, or click here and set up a no strings attached, 20-minute phone call.

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The New Role of Corporate Development: Going from Powerful Ideas to Pragmatic Implementation http://scottpropp.com/the-new-role-of-corporate-development-going-from-powerful-ideas-to-pragmatic-implementation/ Wed, 19 Apr 2017 08:00:33 +0000 http://scottpropp.com/?p=3714

launch

True story from my ops background: When I was running through emails one morning, I found one that stopped me in my tracks.  The VP of a recently acquired product line had sent an incendiary note to the CFO and copied dozens of people internally, using coarse language to declare the integration systems team completely incompetent and their product flawless.  All this was in response to a very visible enterprise, large system-level roll out at a major multi-site client.

The crazy thing, was that each player was acting rationally, and the stage for this had been set months earlier. After all, most major misunderstandings occur when the relationship is just getting started…..

M&A is on the Rise as a Transformation Tool

In the last 36 months, the market for M&A has been red hot.  This helpful graphic from Deloitte shows what the high-level view looks like.  There are three key takeaways here: the deals are bigger, divestiture is on the rise and there is a big increase in technology acquisition underway.

This in turn has driven the complexity of finding, evaluating and getting to the table with the right firms more intense and complex.  Leaders in Corporate Development are the steely-eyed missile men (and women) of the team, listening to and interpreting the Corporate and business unit needs, and supporting the C-Suite in getting to the table with a deal that makes sense.  The higher stakes of bringing in less tangible value (IP, Know How, Market Presence), has required the work in this space to get more complex and require higher more diverse expertise.

The Odds are Stacked Against Smooth Integration

Here are the resisting forces that I’ve seen again and again in M&A driven innovation:

  1. The strongest resistance will come from the internal team that was closest to having developed the acquired know-how organically.  In every firm there is a small group that has been working (sometimes for years) on the innovative product or service.  While the senior team expects them to be supportive, many times the emotion of not getting the internal project to scale creates unanticipated push back.
  2. Even the best acquired products and services have been developed in a “cut and try” environment for a very specific group of customers.  Yet chances are very good that you’ll be using it in ways and at a scale they hadn’t anticipated.  The demands of a much larger distribution organization doesn’t allow the “tips and tricks” that smaller firms use as they are growing.  I have seen it over and over: the acquiring firm imputes much higher performance and quality to the acquisition…only to find that substantial incremental investment is necessary.
  3. The “earn out” (financial performance incentives) for the acquired senior leaders will work at cross purposes to that learning.  Many times there is a substantial compensation “hold back” for the principals of the acquired firm based on the continued sales performance of the product or service.  The dark side of this is that the acquired team works to make sure their product or solution is quickly written into every possible spec, and when issues arise, they make sure it’s “not their product” that’s at fault.
  4. The demand for support quickly exceeds the acquired team’s ability to provide it.  It is one thing to scale a product through a sales team going to market, it is quite another to effectively equip the multiple technical centers of an enterprise organization to build it into their complex web of systems and services.

It used to be about “getting the costs out,” now it’s about “getting the tech (and know how) in.”

Innovation Raises the Stakes

When an innovation agenda is part of the transaction, it makes the before, during and after work much more complex.  It goes without saying that the first gate is culture, especially when intangible value is on the table.  If the embedded culture of the potential acquisition target gives you any pause, it’s a deal killer.

Before: When M&A is on the table, it’s imperative that we have a more robust strategy process that allows everyone to get on the same page, as we discussed in this post.  Recall that the hallmark of this strategy is to build key domains of interest, informed by carefully vetted internal and external experts.  By co-developing the key insights and decisions cooperatively, when it’s time to do the hard work of integration, the senior leadership team is much more cohesive and focused.  This will allow the Corp Dev leader to be much faster and focused in finding and quickly vetting potential opportunities.

During: The pre work allows a much tighter deal team to go after the target, and not get bogged down in developing emergent strategy while trying to get a deal done.  While there are always blue birds and black birds, with the deal narrative well in hand, the Corp Dev team can move faster and with more confidence.  Forming the win-win mutual objective is job one: this serves to keep the overall transaction on track, and to make the cultural fit a visible asset.  To assure that the less tangible assets are captured, it’s important to make use of Subject Matter Experts (SME’s) to contribute to the deal dialogue, know how transfer mechanics and terms.  Timely and specific discussions can save months of painful post transaction revisions and misunderstandings.

After: This is the tricky bit – it used to be all about “getting the costs out,” now it’s about getting the tech (or know how) in.”  Tech transfer is hard enough when it’s done within the same firm, however when you introduce the complexity of two cultures becoming one, it can be easy to let value drain away.  So much to say here, but let me limit this to a few key points:

  1. Keep the prize in sight – Decide early on what the three most important and valuable reasons for the acquisition are and stay ruthlessly focused on capturing the value.  Build a joint steering team and a day-to day-ops team charged with learning-based metrics.  (More on that here)
  2. Build narrow value bridges.  Narrow means be very careful how much demand you put on the acquired organization – especially in the first 120 days.  At a minimum, look at hard value (operations), soft value (IP, Know How, Personnel), and systems (processes, tools, techniques).
  3. Be sure it’s good before it goes big.  Limit early scale.  Deliberately structure a couple of “sandbox” projects that allow the two teams to interact and build value for a client who will appreciate and value the new capability your team will bring.  The strategy must be to go slow upfront to allow a big ramp later – “earnouts” need to be longer term.
  4. Reward mutual success – By establishing some joint metrics and rewards for the value capture teams, you can work through the “I told you so” from the internal team, and allow acceleration and customer feedback to build the new and valuable capability that you put in the acquisition business case.

One of the privileges of having multiple decades of experience is seeing trend lines with clarity, and none is higher stakes or more interesting than the role of Corporate Development in innovation.  In the last three decades we have seen deals that were largely about building capability or market share morph to deals that were intended to have a strategic impact on both the parent and the acquired firm.

You’ve probably gathered that there are a large number of process details, decision making methodology and facilitation know-how that go into doing this well.  If you’d like to have a deeper dive on how this all works, give me a call at 847-651-1014, or click here, and set up a no strings attached, 20-minute phone call.

Related posts you can benefit from…

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