It’s going to be a long day.
I’m sitting in a room with my HR support lead.
We have a list in front of us.
It’s been vetted, approved by legal, and kept confidential by HR.
By the end of the day, more than two dozen people will be looking for new work.
The hardest part is, I know in my gut this day didn’t have to happen.
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I’ve had the above scenario play out four times in my career. For some of you, it may be happening today.
I want to be clear – I’m not talking about performance-related separations. I’m talking about the gut-wrenching, “great people that the business can’t support” reductions.
You have likely winced a few times in the run-up to this day – a customer makes an eerily on-point comment about a fresh feature that you have chosen not to do, or that it took longer than usual on the support line. Little things, seemingly small at the moment, that add up over time.
What we’ll talk about next, is how these days are locked in months and years before they occur. There are deep patterns, and with some insight into what to look for, you can have less of the days described above.
For today, let’s also set aside the MBA excuses and get to the roots. Yes, I know margins declined, the competition was fierce and product demand pivoted on a dime – these are the rules of competitive, vibrant markets. Financial metrics are always backward-facing, meaning that by the time they move, you are already behind the curve.
We need to have a predictive insight that predates financial decline.
The Context
In the last two notes, (here and here) I spoke to you about the formation of two main tribes in business. We’ve termed them the creative tribe and the ops tribe:
- The ops tribe lives to source, produce and deliver. They run by the clock, and each lost hour means less revenue, less margin, and less return on investment.
- The creative tribe runs on the calendar to find, form, and deliver new value propositions to the ops team.
Each group tends to keep to itself and needs process and structure to link up. In larger complex firms, they tend towards becoming more and more insular. Eventually, both teams get into a cycle of diminishing returns.
Each team has a role to play in keeping the offering to the client efficient and on point. The creative team designs the “shifts” in products and services. They interpret, experiment, and validate new offerings. The ops team optimizes both production and distribution. Both are vitally important and can move the needle some independently. But to build real value, we need them to work together.
The way to vibrancy is to re-forge the linkage through cross-functionality.
The Specific Pattern That Creates The Long Day
There is a pattern that precedes a day as I described above, and we can find it by rewinding the tape of vibrancy that every firm travels on. In our workshops, we explore each of these in rich detail, but for today, just let me say that every firm starts out small, integrated, and nimble. It then begins a journey of specialization where the two tribes begin to appear. Management emerges to optimize formalizing the two tribes. Then maturity happens.
It is very typical for firms to get very good at one business model and double down on it. As this is done, the need to cross communicate begins to appear less important, as everyone intuitively understands the business model. In fact many times there are “rules of thumb” that allow teams to quickly assess pricing, margins and new product requests without needing to collaborate.
A natural vertical alignment asserts itself within the firm. Since budget and metrics are done by department, this is reinforced by our financial systems, as well. As a firm gets deeper into this phase, almost all lateral interaction is done by the Senior Director and above. The dominant communication path becomes “up and over.”
As this sets in more deeply, the usual path is to “pitch” to senior management and let the cross-team decision making be done there.
Leaders who win “manage up” the best.
And then it happens – something breaks.
A product shift occurs, a competitor absorbs your offering or the category loses steam. You hang in for a while, but it becomes apparent that you are on the wrong side of the inertia – and budget and headcount reduction is your only option.
How to Spot It Early
There are leaders in the firm who will provide you with early warning on this. Typically they are those who are used to seeing into the future with clarity and a track record of predicting outcomes. They may be in sales, marketing, and customer service. The rub is that unless you go looking for it, the early warnings will stay hidden.
The issue is that these leaders’ insights can get overwhelmed by the ops team members who are more near-term focused.
The second marker is to watch carefully for what layer of your firm is doing the cross-team communications. When there is a robust level of interaction at the supervisor and management layer, things are well. When this goes away, it’s a sign that agility is being lost.
The Work
There is a threefold path to restore vitality:
- Diagnosis. This is best done in a cross-functional workshop environment where leaders can be trained on the model above in a specific way that includes self-assessment and insight development. Not every firm has every issue, and getting to the one or two key driving issues is very important.
- Workshopping. With this diagnostic awareness, we can use tools to reinstall the rich expectations and communications needed. Firms that lean into the work see improvements in client satisfaction, retention, employee engagement – as well as financially.
- Building it into the fabric of the firm. Once the workshopping work is complete, it’s important to put the linkages in place to reinforce the fresh behaviors through training, compensation, and performance reviews.
Assistance in This Process
I’ve built a client-tested, robust approach to helping you efficiently diagnose your firm’s ability to respond to shock or disruption in a way that can help you and your team to a much higher performance, resilience and output.
I frequently work with ops leaders who have technical backgrounds in pinpointing and unlocking fresh performance. If you’d like to have a conversation with me about heading off a day as we described above, please email me at scott@scottpropp.com, or use this link to put a call directly on my calendar.
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