My CFO client was lamenting the pace of progress on their innovation programs during a recent 1:1 session. I had an inkling that I knew what might be going on, so I asked her to show me the portfolio of project work they were funding for the current year.
And there it was.
Some background: we are talking about a healthy firm with a nice sustainable P&L, high-quality products and customer distribution systems. They have been in business for over a decade and are just shy of a thousand employees.
They had 16 priority programs in their plan, which when we drilled a little deeper, was driving four significant platform changes, and two that would require some real work to enable the channel to sell them effectively.
Now in the light of day, you are all saying they are trying to do too much, and you would be right.
So how do smart, high-performing firms get themselves into these corners where they have a full funnel and the group has come to gridlock trying to get them all done?
When I get to work with teams like this, I’ve found there are three things that usually contribute to the gridlock:
- An authentic desire to be highly customer oriented
- A gradual reduction in the ability of the key senior leaders to speak truth to power (as firms become more established it’s common for subordinates to be less willing to challenge their leaders, even when needed)
- An over sponsorship of bright, shiny object programs
Keeping the playing field clear is key to high-performance innovation work in firms. When key resources in the development chain are overloaded, it’s not just a small delay, it’s a major breakdown – think random toll booth on a superhighway.
The average firm of this size needs to have a razor sharp list of 3-5 key initiatives. When the leadership team is able to do the hard authentic work to agree and align, that’s when the magic begins to happen.
Let Your Yes Mean Yes
Early in a business’ life, it’s common for an organization to thrive by being very customer oriented. Usually these young and vibrant businesses have a culture of “yes” that results in a “do whatever it takes” effort. This works well when the firm is small and promises made are digestible for the team. As the firm grows and systems and teams serve large segments of the firm’s market, however, the capacity for custom work is greatly reduced. Usually the last person to realize this is the founder, who continues to pursue the pioneering work when the firm has moved to to scale.
The downside to this is that the sales team quickly understands that the product manager has lost control of the delivery dates, and escalates all the requests to the C suite. The answer they get is of course “yes” and our gridlock is now locked in.
The truth is that the delivery date cannot be given with integrity.
I’m shaking my head yes, but my eyes are telling you no.
The usual next step in this drama is an all-hands session to “sort out the priorities” and “get things back on track.” This meeting usually goes on for hours, involves lots of spreadsheets and results in clarity of the backlog, but not relief. Each item results in a passionate argument from the stakeholder and rarely is an effort set aside.
The crux of the issue is that this meeting has the wrong focus at the outset. That is, it’s a snapshot of what’s stuck in the system as opposed to a focused agenda or strategically-oriented action plan.
The hard truth is that some “no’s” need to be spoken to allow high integrity “yes’s” to be made. You need to create a fast lane for your priority programs and set strong decision guidelines to keep it clear.
Establishing a capacity and discipline for the repeatable delivery of new projects is the mark of a high performing mid-sized firm.
Bring Out Your Dead
The last piece of this is recognizing that the business case of the backlogged work needs to be re-examined to make sure it still holds water. Many times I find projects that are absorbing critical resources in the firm that have been “out of sight” for years, but are passionately pursued by their original sponsors.
What does dead mean? Somewhere between inception and current state, something shifted in the business model to make the program fiscally or technically unworkable. One of the most well documented of these shifts was the Iridium program documented in the book Eccentric Orbits by John Bloom. Smaller scale examples include AM Stereo radio, Ardis Data Network and a host of others.
I encourage firms to set up an annual portfolio review that includes a fresh look at the business case of the programs to make sure that they still make sense. This is best done by either hiring or borrowing an objective individual to help you sort it out. It is not uncommon to find 10% of your support staff engaged on these projects, which are typically interesting for the team, but ineffective for the business.
- Put a truth teller in charge of the review
- You need a decisive person with an unrelenting customer focus.
- The middle management will be the hardest to convince to let go
- Your middle managers will have developed a surprising identity based on their competence for these programs. When you begin to examine them, don’t be surprised at the pushback. It will take work to sustain the gain.
- Set up a small sandbox for the founder’s activity
- Founders need to have some reach out activity to feel like they are in the game. Sandboxes keep the “messy stuff” localized, and have the same effect for businesses. Setting up an area with boundaries allows the itch to be scratched without hurting the core.
- Honor the work & extract the learnings
- Honoring the work and those who completed it is both the right thing to do and necessary to allow people to move on. Having simple after action reviews with short crisp reports helps to build the strength to get in and get out.
The bottom line
It’s expensive to have your value delivery engine too full. When the pipeline is clogged, you lose control of your ability to prioritize, as decisions are being made in a very decentralized way about what moves and what does not – and many times the squeaky wheel is not the highest priority.
When you delay getting your products and services into the market it costs you top line revenue, as well as profit that will likely never be recovered. It also demoralizes your best and brightest as they are constantly shifting priorities to satisfy the demands of a key sales leader of noisy customer. Lastly, it reduces some of your most talented people to being frustrated clerks rather than skillful leaders.
Just like a weight loss program, it takes real discipline to not gain back the overlead after the spring cleaning. This is hard work that requires working through the underlying areas that got you here in the first place.
It’s hard to do this without an objective outside team member. If we have hit a nerve and you would like help to recover the vibrancy, it would be great to continue this discussion. Please send me an email or give me a call on 847-651-1014.
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