The “workshop zone” is the term I give to those firms and businesses that irregularly pursue growth projects.
You might think this would limit the category to smaller firms, but that would be wrong. It turns out that some surprisingly large firms only truly activate growth programs – defined as new activities that are built to meaningfully impact the firm’s financials or contribution to the larger firm – on an infrequent basis.
There are a number of reasons for this, the first being human nature. We humans are pattern-making machines, and if possible, we tend towards the lowest energy activity that meets our needs. If a firm is doing well in the businesses it has built, there’s very low energy for investing in the hard and low percentage work that is developing new value propositions. Secondly, the work it takes to scale a firm tends to move it toward specialization, and specialization tends to lock in patterns and capabilities.
Certainly the firms I work with that are led by the prototypical founder owners can find themselves in this cluster as they are largely driven by the intuition and cadence of their leaders. When the leader is on a tear, it’s all hands on deck. But when they are not, everyone keeps their heads low.
Larger firms that have large separation between R&D and Operations can find themselves here if they only rarely activate those projects to be fully-scaled client solutions. It turns out there is a very common and natural barrier between those who explore and those who are drawn to build scale (and this led me to build services that lower this boundary – see links here, here and here).
There are multiple ways to know if you are in this zone:
- The first is to take a step back and think through the major efforts pursued in the last five years. When we do this exercise, we frequently find cost reduction, quality or technology upgrade programs, but rarely anything that ties out to having a bigger share of a market or transporting the firm into a new, better competitive arena.
- The second is to review your financials over a multi-year period by product. Have there been any material changes? Did you proactively change your product road map or react to demand?
- A third is to ask your ecosystem. Sometimes best done by a third party, you can pretty quickly get the lay of the land by surveying your upstream and downstream partners. One effective way to get this done is to, through an anonymous party, seek a ranking among your industry peers for quality, cost and adaptability.
Effects
As you might guess, this irregularity has substantial consequences for the firm:
#1: Talent
It’s hard to be the hero. Forming and leading cross-functional teams is a significant skill set, and is incredibly hard to learn anywhere but on a real project. Firms that only tap leaders infrequently wind up with large gaps in their teams’ skills to be able to do this work. With the talent shortage we are experiencing, the best players in this space are spoken for, which makes in-house talent development the strongest option.
Some consequences of this infrequent tasking is that the leaders in these firms frequently burnout trying to lead these teams because they haven’t had to lead a team through the ambiguity that a typical growth team encounters. They can feel unsupported, as they don’t often have the coaching and mentoring that is normally available on the firm’s more mainstream work.
#2: Results
When you are not in the batter’s box often, it’s hard to choose a good pitch. The results of these projects tend to be very mixed for several reasons. One big factor here is that since the firm does not charter these often, they are missing the connectedness to choose projects from their clients’ point of view. A related issue is that these tend to be internally driven, and usually only brought to clients late in the game – and push projects typically don’t land on the sweet spot in the first iteration. This can also lead to a weaker, more intellectual commitment, that can fall away quickly when resistance is inevitably met.
Lastly, it’s really hard to budget for and manage these activities that are only undertaken periodically. Leaders will feel it’s “unforecastable,” both in budget and in outcome, when in fact, firms that have this as a competence can do both.
#3: Adaptability
Firms who only do this occasionally tend to form very strong vertical functions that resist cross-firm teaming and support. We know as client expectations continue to move in both quality and match of solutions, firms that can quickly “morph” to meet these expectations will win.
It is easy for firms to develop “atrophy” of the skills to adapt to these changes. The parallel issue is that internal resources that try to keep pace with these changes wind up with very large workloads and attendant burnout potential.
How to Escape This Orbit
The bottom line is that it’s not easy to escape the pull of this zone. There are powerful cultural and behavioral reasons for why this pattern exists in your firm. The deep hunter gatherer in all of us want to solidify the base camp and feel safe, and reaching out for new opportunities runs counter to the perceived safety of the familiar.
The truth is that the skill of reaching out and doing new is now a survival skill for firms.
My colleague Rita McGrath has documented well that this is the age of temporary advantage, and reinvention is the new normal.
If you are a leader who want to move on, here are a couple of starting points:
- Drive Customer Curiosity and Focus: This starts at the top and cascades out into the firm. Make sure meeting agendas allow for regular opportunities to talk about the clients’ evolving needs. Get out in the field and lead by example, visiting your peers at both upstream and downstream partners. Document the discussions and get them into the leaders’ hands.
- Watch for Natural Talent: Keep a sharp eye for those team members who have a real interest in moving across the firm. You are looking for the deal maker who is always in engineering, the marketing leader who is always in the field and the CFO who knows the competition inside and out.
- Make a Real Effort to Short List and Activate Cross-Functional Projects on a Regular Basis: Make it a point to seek the best inputs from the firm, your supply chain partners and customers, and form an effort behind at least one annually. Make sure it’s resourced and has air cover to support its remit. Keep a personal eye on it and celebrate wins publicly.
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