Strategy formation is important – but implementation is key

A strategy is of course worthless if the only ones that care are the board of directors. While the board is responsible to ensure that your company has a strategy, it doesn’t really help  if your strategy stops there. Having a strategy isn’t even half the effort and IKEA knows this.

If the strategy is going to be executed, the company has to have resources enough to follow through and all employees have to know how. Make a few practical rules for your employees to live by – to tell your people how the strategy is going to be implemented. This is how IKEA is leading the way and Ingvar Kamprad (the IKEA founder) has 9 commandments:

1) Product ranges – IKEA’s identity is simple, bright. This is linked to the lifestyle you want to convey. Functional and good quality, but at a reasonable price.

2) The IKEA-spirit – strong vital reality. Enthusiasm. Countinous renewal. Helping one another doing an even better job. Humility.

3) Good profits – provide more resources and more oportunities. We need money to reach our goals. Everything has a price tag on it – e.g. the catalog. Saving money is a virtue – even small amounts.

4) Good results desipte limited resources. Reaching your goals with limited resources is a virtue. Waste is a mortal sin.

5) Simplicity is a virtue. Simple procedures and policies are powerful. Simplicity in our behavior gives us strength. Excessive planning is also waste. Concentrate on the execution.

6) Think – what can be done differently? Why are we doing it like this? Beware the curse of knowledge and experience. Prior experience can dampen your thirst for knowledge and willingness to experiment

7) Focus – is vital to all prosperity. You cannot do everything, everywhere all the time, all at once. Strategy is choice – choice is deciding what NOT to do.

8) Being responsible is an advantage – being accountable is taking action. Fight the fear of failing. Making mistakes is the privilege of the action oriented.

9) There is more to be done than has been done so far – there is a wonderful future. A company that has reached its goals, will stagnate and lose its life power. The sense of being done is the best remedy for sleeping.

Regards,

Austin

How to build accountability or “Who’s got the monkey”

These key ideas in this post are taken from the Harvard Business Review article “Management Time: Who’s got the Monkey?”  by William Oncken, Jr., and Donald L. Wass

How to identify the situation – “you have the monkey”:

Imagin the situation: You are racing down the hall. An employee stops you and says, “We’ve got a problem.” You assume you should get involved but can’t make an on-the-spot decision. You say, “Let me think about it.” You’ve just allowed a “monkey” to leap from your subordinate’s back to yours. You’re now working for your subordinate. Take on enough monkeys, and you won’t have time to handle your real job: fulfilling your own boss’s mandates and helping peers generate business results. How to avoid accumulating monkeys? Develop your subordinates’ initiative, say Oncken and Wass. For example, when an employee tries to hand you a problem, clarify whether he should: recommend and implement a solution, take action then brief you immediately, or act and report the outcome at a regular update. When you encourage employees to handle their own monkeys, they acquire new skills—and you liberate time to do your own job.

How to return monkeys to their proper owners:

• Make appointments to deal with monkeys.
  Avoid discussing any monkey on an ad hoc basis—for example, when you pass a subordinate in the hallway. You won’t convey the proper seriousness. Instead, acknowledge the problem and schedule an appointment to discuss the issue.

• Specify level of initiative.
  Your employees can exercise five levels of initiative in handling on-the-job problems. From lowest to highest, the levels are:

1. Wait until told what to do.
2. Ask what to do.
3. Recommend an action, then with your approval, implement it.
4. Take independent action but advise you at once.
5. Take independent action and update you through routine procedure.

When an employee brings a problem to you, outlaw use of level 1 or 2. Agree on and assign level 3, 4, or 5 to the monkey. Take no more than 15 minutes to discuss the problem.

• Agree on a status update.
  After deciding how to proceed, agree on a time and place when the employee will give you a progress report.
• Examine your own motives.
  Some managers secretly worry that if they encourage subordinates to take more initiative, they’ll appear less strong, more vulnerable, and less useful. Instead, cultivate an inward sense of security that frees you to relinquish direct control and support employees’ growth.
• Develop employees’ skills.
  Employees try to hand off monkeys when they lack the desire or ability to handle them. Help employees develop needed problem-solving skills. It’s initially more time consuming than tackling problems yourself—but it saves time in the long run.
• Foster trust.
  Developing employees’ initiative requires a trusting relationship between you and your subordinates. If they’re afraid of failing, they’ll keep bringing their monkeys to you rather than working to solve their own problems. To promote trust, reassure them it’s safe to make mistakes.

As I’ve used this framework at work (yes, I have to admit I’ve even used in my personal life), I’ve found it both easy to apply and effective – it requires some effort but mostly simple behavioral change on your part.

However, what I’ve found equally valuable, is that this “process” over time reduces the amount of “monkeys” your employees give you.  At least that is my experience.

Regards,

Austin

When should I NOT use Best Practices?

As “we all know” Best Practices are techniques, methods, processes, activities, incentives or rewards that are believed to be more effective at delivering a particular outcome than any other techniques, methods, processes, etc. The general idea is that with proper processes, checks, and testing, a desired outcome can be delivered with fewer problems and unforeseen complications.

I find it somewhat problematic to buy into the term “Best Practice” as the term has implications of generality and universality applicability. I sense that some universal source has settled all disputes and the matter is closed decided, set and resolved. In addition, because of the wide spread use of best practice as a buzzword, I’ve found it easier and more precise to use this term or sometimes “better practices”, or “current thinking in the industry”. At least these terms may imply that the practices are not universal, but depends on the specific situation.

For deciding when to apply best practices, I have found it to consider two axes:

• External service provider vs. Internal service provider
• Degree of reward for differentiation (doing business significantly different from your competitors has a high return and lies within your expertise – or at least it should)

This creates a matrix with four quadrants.

Q1: The first quadrant describes the sitation where differentiation pays off and the services and competence is contained within the company, i.e. produced internally. This is typically where your core business is and where most of your competence and effort should be built around. I see no reason for applying Best Practices here. You should probably go for “best in class”.

Q2: The second quadrant describes a situation where differentiation pays off, but the service is produced outside your company. Here’s where you rely on close partnerships and probably some kind of shared rewards.

Q3: The third quadrant describes a situation where differentiation doesn’t have a significant benefit (your aim should be that it is “good enough”) and often where work processes are standardized, volumes high and economies of scale significant. Here’s where you give it to someone who makes a living from doing this kind of work as efficiently as possible.

Q4: The fourth quadrant describes a situation where differentiation doesn’t pay off, but for some reason the services are produced internally. This could be because of regulatory issues (e.g. safety or social responsibilities) or for historic reasons (e.g. a lot of competence in this area). I have found this situation to be generally “unstable” and tend to die out.

By mapping your business functions or processes in this matrix, I believe you can easily sort out where to focus your effort. A humorous friend of mine once said, let’s not become the  “United States of Generica”. I tend to agree, especially now that you know how to consider when to use Best Practices…

Regards,
Kevin

Yesterday is history, tomorrow is mystery, today is a gift, that’s why they call it present

Yesterday is history, tomorrow is mystery, today is a gift, that’s why they call it present!

A lot of  quotes touch upon this subject. This is my favourite. It is poetic, gets the message across nicely and  links by association two words that are not really related, but the relation still rings true…

Case In Point: Carpe diem – no-one will cease the day for you!

If you really want to do something, you will find a way. If you don’t, you will find an excuse.

If you really want to do something, you will find a way. If you don’t, you will find an excuse.

Author: Anonymous

I have found that more often than not, it is about MY choices. It is about my DRIVE, not what limitations I see or excuses I can find. Any task, no matter how large or small can suffer from me “not wanting to”…

Could positive thinking have negative consequences for “those who need it the most”?

Cover of The Power of Positive Thinking

Browsing the news this morning, I found myself waking up when reading this article in The Economist. It made me realise some things that may have broken some of my fundamental values and beliefs… I really don’t know yet…

Say WHAT…?

Recent research, however, shows that for some people, optimistic thoughts can do more harm than good – to those some of those we traditionally think “need it the most”.

[...]

“I CAN pass this exam”, “I am a wonderful person and will find love again” and “I am capable and deserve that pay rise” are phrases that students, the broken-hearted and driven employees may repeat to themselves over and over again in the face of adversity. Self-help books through the ages, including Norman Vincent Peale’s 1952 classic, “The Power of Positive Thinking”, have encouraged people with low self-esteem to make positive self-statements.

Since the 1960s psychologists have known that people are more accepting of ideas close to their own views and resistant to those that differ. With regard to self-perception, if a person who believes they are reasonably friendly is told that they are extremely gregarious, they will probably accept the idea. But if told they are socially aloof, the idea will most likely be met with resistance and doubt.

Wondering if the same tendencies could apply to making positive self-statements, Joanne Wood of the University of Waterloo in Canada and her colleagues designed a series of experiments. They questioned a group of 68 men and women using long-accepted methods to measure self-esteem. The participants were then asked to spend four minutes writing down any thoughts and feelings that were on their minds. In the midst of this, half were randomly assigned to say to themselves “I am a lovable person” every time they heard a bell ring.

Immediately after the exercise, they were asked questions such as “What is the probability that a 30-year-old will be involved in a happy, loving romance?” to measure individual moods using a scoring system that ranged from a low of zero to a high of 35. Past studies have indicated that optimistic answers indicate happy moods.

As the researchers report in Psychological Science, those with high self-esteem who repeated “I’m a lovable person” scored an average of 31 on their mood assessment compared with an average of 25 by those who did not repeat the phrase. Among participants with low self-esteem, those making the statement scored a dismal average of 10 while those that did not managed a brighter average of 17.

Dr Wood suggests that positive self-statements cause negative moods in people with low self-esteem because they conflict with those people’s views of themselves. When positive self-statements strongly conflict with self-perception, she argues, there is not mere resistance but a reinforcing of self-perception. People who view themselves as unlovable find saying that they are so unbelievable that it strengthens their own negative view rather than reversing it.

Given that many readers of self-help books that encourage positive self-statements are likely to suffer from low self-esteem, they may be worse than useless.

[...]

…like always – there is no single cure for ALL

CONTEXT is KING!

Regards,
Kevin

Context and Our View of Self and Others

Sometimes, and probably more often than we like to admit, a heavy emphasis is put on personality characteristics (internal factors) to explain someone’s behavior in a given situation, rather than thinking about situational factors (external) contributing to the results. This phenomenon is often referred to as the fundamental attribution error. The flip side of the fundamental attribution error is the actor-observer bias, in which people tend to over-emphasize the significance of a situation in their behaviors and under-emphasize the role of their personality characteristics. My guess is that the latter bias, is quite useful as a defense to our self esteem – but also a hard nut to crack when it comes to self-improvement. In combination, these two thinking patterns are and explosive mix which. In the following I’ve made some personal notes on how to avoid these traps and try to assess situations and results more objectively.

What can I do avoid making the fundamental attribution error?

Being human, I believe it is virtually impossible to avoid making attributions from time to time. It is probably a combination of brain efficiency – .

To avoid making the fundamental attribution error, one of the best things you can do is “put yourself in the other
person’s shoes,” as the old saying goes. By thinking about what you might do in the same situation, you might come up with some situational factors for a behavior which could shed more light on the subject.

In addition, asking the question: Why would a intelligent, rational and decent human being do this?

I think awareness of a common cognitive bias can help you look for hidden behavioral factors, making you a better observer and better able to read people and situations. Finally, when you are trying to explain your own behavior, avoid indulging the actor-observer effect, and make sure to give your personality some credit for your actions.

“Some things have to be believed to be seen.”
- Ralph Hodgson

After all, it is about respect and decency, isn’t it?

Rgds,
Kevin

Strategy well defined – is it really necessary?

People older and wiser than I am, have tried to define what the term strategy means in todays business. I even have to admit that some of these definitions, are quite good. Yet they all seem to bring in ONE aspect or application og strategy and none of these seem to be comprehensive.

Somehow, I find that strategy is ultimately about making choices, and so, you I have found that you easily detect if a strategy is really a strategy by posing the question:

By applying this strategy, what have you chosen NOT to do?

When asking this simple question, I have found that a lot of strategies are not more than a collection of nice words which doesn’t provide any real direction. I find this situation sad, as in my experience a strategy is important to most organizations – but only when the strategy is made relevant.

Etymology – back to the roots

According to wiktionary.com, the word strategy is derived from two ancient Greek words – “stratos” and “ago”. “Stratos” indicates some kind of military activity (“army”) and “ago” carries with it some form of guidance or leadership (“to lead, to conduct”).

In my experience the image of successful strategy as winning a battle is a widespread notion. However, I find that winning over competition is merely ONE aspect of strategy. It also raises important questions such as; WHO are we fighting and WHO are your allies.

An excellent framework: Process, content and context
In exploring this area I happened to stumble on the brilliant book “Strategy Process, Content, Context an international perspective” by Bob de Wit and Ron Meyer. As opposed to other books on the topic who take a stand and state their view on the topic of strategy, de Wit and Meyer have put on display a collection of well known and well written articles from renowned academics and other subject experts. But collecting these articles is not by a long shot what makes De Wit & Meyer’s book so important. Their systematic and comprehensive framework makes the essence of each article stand out clearly clear. It also makes you aware of the assumptions, weaknesses and shortcomings, but most of all your own biases and inclinations. This is in fact what I found most fascinating about the book.

De Wit & Meyer’s framework in a nutshell

De Wit and Meyer have divided it into three sections:

Process – The processes of strategy is constituted by the strategic formation (how the strategy came about) and implementation (how you ensure it is rolled out in the organization) and views on strategic thinking (your mental model when approaching strategy)

Content – the content of strategies as seen from BU level, corporate level (these two looking at the firm) and network level (taking a broader view – the system)

Context – the context in which the strategy is formed – is this in the view of the industry context, the organizational context or the international context

There is also a short chapter on organizational purpose which is worth a read-through, but it is not the core of the books message.

Within each chapter there are 4 parts:

1. The Issue - describing the issues contained in this part of the framework
2. The Paradox - describing the apparent paradox
3. The Perspectives - a summary of what are the different perspectives are
4. The Articles - relevant articles describing one perspective in further detail

Concluding remarks
As you may have discovered by now, I am quite excited about this framework as it gives a good understanding of the different aspects of strategy. This for two reasons:

1. This is very helpful to make conscious choices about the aspects you need when creating or analyzing any strategy
2. It gives clarity as to what aspect of strategy you are addressing in any discussion.

For me this framework has proven clear enough to be useful and still open enough not constrict the content of the strategy or its general applicability. So, if I have to choose I would rather have a:

well defined strategy, than strategy well defined.

Further blogging
In the future, I have intentions of writing about each paradox on this blog, but I cannot guarantee that I will write in any given order. However, promise that I will return and stay true to the structure of the book.

Please let give me feedback on this blog. I am always ready to listen, review and learn.

Best regards,
Kevin Faber