In my conversations with key leaders across a variety of industries, I’m finding similarities in their responses to the extraordinary catalytic events that we’re all currently living through. In many cases, we are still working out the language for what has happened (and what is happening) to our upstream and downstream work partners – both internally and externally.
Just to sync up:
- Quick and rapid decisions have been made
- We are hitting the part of recovery where there are no easy answers
- Our pre-COVID strategy is not going to work
- Our next moves will decide whether we thrive or simply survive
Working with both operations and product creation executives, it’s getting clearer that two underlying issues are going to hamstring many firms. These two items are so baked in that most leaders don’t see them until they are pointed out, yet once described, they help with a clear path forward.
The Two Drivers That Impact Your Ability to Evolve
Assuming you were a healthy firm going into the early portion of 2020, you had two key teams driving value for your firm:
- Those who sell and produce the current product or service
- Those who create new value propositions and products for the future use of your market
Your corporate “software” was set up to link these two activities together, bridging the gap with analytic data, soft insights, and client feedback. This analysis and planning work runs on a clock cycle – typically annually – building a joint view of the end-to-end value chain within your firm and how it needs to evolve. The “ops” team is usually charged with the near-term view, not uncommonly twelve to eighteen months. Meanwhile, the team creating new value propositions is looking out 24- 48 months.
The firm’s ability to evolve is dependent on two deeply held behaviors: the clock cycle of planning and the focal point of each team’s sweet spot. During “normal times” these clock cycles work just fine, because things are not changing quickly enough to disconnect your products and services from your key clients. At this time, however, the needs of many clients are shifting – and well inside your usual planning window.
The powerful tendency is going to be towards the deeply embedded pace and roles inside your firm – and the one team that can help knit them together is typically R&D.
One Area to Avoid
Before I outline how to overcome these powerful drivers, let me provide one caution. One thing I see in some firms who are in good faith trying to preserve the historic roles of these groups, is an attempt to build a “leapfrog” project with a “big bet” of time, money and resources. There are times for rolling out the heavy artillery, but at this point in the business cycle, the chances of the target shifting are just too great to suggest a high probability of success.
Said more directly, it’s very important to build rapid cycle iterations than all-out bets.
Our friends in academia like the idea of the lone heroic leader, guiding to success with an enormous bet. But the truth is, that when these leaders were living the adventure real-time, most pursued a strategy of incremental bets (this article explores the history more fully).
As an example, during the evolution of mobile communications from wireless telco networks to large-scale hybrid, public-private networks, there were many, many firms that had exactly the same business case: to fully serve the mobile business leader, followed by the consumer. What evolved was an extraordinary set of overlaid solutions, offered by brands that we know now, who iterated in markets city by city to find the best combination of cell towers, in-building support networks and high bandwidth WiFi solutions.
We are in one of those zones where iterating and evolving will lead us to the next investable set of solutions.
How to Go to Work Building a Medium-Term Strategy
The key then is to build a hybrid ops/product creation activity that is focused on the mid-term, which in most cases is something like 12-24 months out (the weakest area of focus in most firms). Getting a clear focus on your intermediate goal is very important, as it will free up your most valuable resources to engage without the distraction of wondering if what they are working on is really going to make a difference. Without a clear picture in their mind, this group will spend a very high amount of time mentally second-guessing – and the firm will tread water.
To get this activity underway, we start by selecting a small, focused cross-functional group and providing them with everything we think we know about our target client. The most important leadership styles to be present are the Architect and Catalyst. Briefly, for those of you who haven’t worked with leadership styles, the Architect is the skillful vision caster, highly skilled at combining new ideas to create new opportunities. The Catalyst is a leader who relishes completion and forward progress. Together, these two styles create a powerful core of visioning and doing (for more information on leadership styles, see this article).
Their first activity is to sort these “facts” into three buckets – those things we know are true, those things we think are still true, and those facts that we know have shifted for sure. A strong facilitator is needed at this point, as the tendency will be to assert that more assumptions continue to be true than are really true – it’s not that people are knowingly trying to sideline the work, it’s just that it’s really hard to give up on deeply embedded learning.
Once the “need to check on these” list of assumptions is on the table, the leader helps talk through how to carefully get the needed information. Usually, this is a series of activities to check and cross-check using key sources – sometimes your own sales team, sometimes market watchers, sometimes insight drawn from examining the environment.
Once completed, you need to move from facts to ideas – an activity we call synthesis. The usual trap here is to have too small a group of ideas to work with, so I have external resources that help to source out-of-the-box thinking that can be used to open up the aperture, and give the team a fighting chance.
Once you have an idea pool, you need to look at real-world constraints. For instance, many firms need to add the constraint of using the existing channel for product or service delivery to be able to make a meaningful impact in the 12-24 month window. Other firms need to retain a subject expertise zone to allow sufficient depth of talent to be present.
A Couple of Areas to Watch For
It is important to do this work under some governing “must be true” guidelines.
- There must always be a bridge from here to there. When we are working on a new product or solution in the short term, as described above, we don’t have time for inventions. If we are missing a key component, you need to talk about where you could get it – right away. This might be a limited partnership or joint venture with another firm.
- The best thinking always starts one layer back from the “flagship” core product for your firm. Decomposing the value you put into your core product and looking at simpler versions for niche markets is usually a very productive pond to fish in.
- The corollary to this is that client insight follows the same rule. Check to see what conference presentations your client has made and what they were looking for pre-COVID. Chances are they were signaling a significant opportunity for you.
Working with Me
This may look pretty simple and black and white, but it’s not easy.
I take on a limited number of advisory and project clients, using facilitation tools, checklists, and processes honed through dozens of assignments. If you’d like to talk about how an advisory or consultative approach could help you through the muddled middle, please reach out to scott@scottpropp.com or put a 20-minute appointment on the books using this link.
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