Category Archives: Management

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What Does Winning Look Like?

If you’ve ever been in a planning meeting with me, you are familiar with this question: What does winning look like? This is how I like to frame decisions around initiatives we are considering. If we can define success in advance, we will know if we achieve it. If we have no idea what winning looks like before we commit resources to a project, how do we know if it was worth it once we deliver the work product?

We all know what winning looks like in sports. If one team has a higher score than its opponent, that team wins. Simple enough, but is it also winning if there were so many injuries in the latest game that half the team can’t play in the next game? What if the team’s coach coach delivers the win, but on a series of controversial decisions that damage team morale for the rest of the season? What if someone cheats? Some of winning is straightforward, but not all of it.

Let’s consider a working example in business.

Let’s say we have an idea for a new set of features we think we want to create for our e-commerce platform. One way to decide what winning looks like is a simple ROI (return on investment) calculation. Suppose the project cost is a million dollars. The first thing we want to do is get back that million dollars through incremental profits. Remember always that revenue is not profit. We have to take all our fixed and variable costs out of sales before we achieve a contribution to earnings. A million dollars of revenue does not pay back a million-dollar investment, but if our contribution margin on those sales is 20%, then we need an incremental $5m of revenue to produce $1m of incremental cash (presume that general and administrative costs are unchanged to simplify things).

Let’s say then we’ve articulated the minimum payback to break even we need on $1m of investment is $5m of incremental sales (that is, revenue we would not have received without the new initiative). Of course, no one wants to break even in business, we want a multiple of that investment back. Do we want 5x, 10x, or more? A lot of that depends on the scale of the business, but let’s say we want 5x our investment to call it a win. That’s $25m of sales generating $5m of cash for a 5x return.

The next question we might ask is how soon do we want that return. Some of that will depend on the numerous initiatives competing for investment. If two potential initiatives are evaluated to deliver the same 5x return, but one can do it in six months and one can do it in a year, I’d say we go with six months. So the cash we produce is important, but so is the time we have to wait to get it back.

Does winning end there? Is selecting an initiative solely based on return on investment and time? Seldom are those the only factors in play. We need to think about the strategic value of our initiative. Does it lift our customer count? Sometimes that is even more important than the incremental cash we are producing, particularly if we are focusing on the lifetime value of a customer. In this case we might set a goal that the new initiative increases our customer count by 5% in no less than a year. If we know what those customers are worth to us in the long run, we might go back and pick the initiative with the one year return on investment over the six month time frame if the additional customers we are acquiring are all the more valuable.

Another factor in winning might be market positioning in the competitive environment. Let’s say we’re convinced the feature we’re considering is something our customers have been requesting in customer service feedback, because no one else does it very well. Winning in this instance might be about acquiring market share above other metrics. When we launch the feature, if we see our online orders increase by 5% while a competitor’s volume stays the same or declines, we might call that winning, particularly if we can translate that gain in market share into higher customer count or improved lifetime value.

The point here is not to enumerate all the ways we might factor winning, but to force a robust dialogue ahead of committing to an initiative that builds a consensus around the work we will do together. If we collect data in advance, set goals for the improvement of key performance indicators (KPIs), ardently debate the relative merits of the various initiatives before us, and then make an informed choice, we can clearly measure the success or failure of the initiative. If we just reach to heaven for inspiration, how can we know if we won or lost?

Wise business leaders know that if we discuss upfront what winning looks like and then fail to achieve it, there is no blame to be assigned. We haven’t failed at all, we have learned in an experiment that mattered and held consequence. The argument is for better process management, to spend the time in advance discussing what winning looks like so we know it when we see it or don’t see it. Failure to invest that time ahead of committing resources to an initiative is indeed a form of failure, even if the initiative happens to succeed (how you know it succeeded when you didn’t address that in advance is another story entirely).

Don’t move forward without deciding what winning looks like. Crafting a thesis of the change you are trying to affect and the benefits you intend to bring establishes a benchmark for measurement. Insisting on this step early in product development will not only improve the odds of success, it will improve the teamwork and ability to share in the success a team creates together.

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Photo: Pixabay

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A Brief Reflection on Hope

One of the most rewarding moments of my life came when my wife started teaching one of my books in her college classroom. It wasn’t something I asked her to do or ever expected. She decided on her own that my short business parable, Endless Encores, was a good fit for her English language learners to be exposed to my particular take on management practices.

I can’t well enough convey the joy I experienced visiting her class on occasion as the guest author, usually surprising her students. If you ever want a jolt of self-confidence, listen to a group of others talk favorably about something you’ve written and what it means to them. There then came a point in the discussion where my wife quoted one line which she said was her favorite in the book:

”Hope is the strength that keeps us going.”

I never thought of it as particularly profound or even important. In the context it appears, it’s a bit of a throwaway phrase to transition to the next set of reflections. That’s the thing about writing, once you put the words in front of others they aren’t yours anymore. They belong to others and whatever resonance they may carry is beyond your control. We’ve all experienced that in song lyrics, poetry, and similar expressions. What we read and hear is often more significant than what the writer might have intended.

Hope is as good a proxy for interpretation as any abstract idea. Hope is enlightening, uplifting, motivating, and rejuvenating.

When I think about hope, I think about optimism. I think about all the daunting challenges we face in the world and why we don’t throw in the towel and admit defeat. I think about the more specific problems that land on my desk and whether it’s sensible to think about effectively meeting the needs of all of them.

Hope is a universal theme with centuries of literature beckoning its light. Hope can be melodramatic and miscast as a broad archetype, but it is seldom invoked without some kind of passionate foundation. Hope is resilience, not bluster. Unless misappropriated, it is not silly or trivial. Hope is meant to be heartfelt, which gives it credibility and sometimes surreal power.

We call upon hope when we are down, when we are exhausted, when answers are not apparent. We often look to hope when we are lost or wandering. We can come to hope as a first or last resort when more logical or empirical paths elude us.

For me, hope is not cynical. It’s not sardonic. It’s less an argument and more a rallying cry. It can bring us together because it is understandable and limitless. The emotion is complex, but the unifying impact is tangible.

While hope is too often in short supply, in dire times it is difficult to dismiss in significance. As I think about so many of the impossible conflicts surrounding us, I return to hope for its healing power. Hope is important, sometimes essential, regularly underrated in consequence. If your work involves motivating others, hope is always in your toolbox. I am not embarrassed to say it is high on my radar as a unifying force when the opportunity is relevant.

Maybe that’s why I wrote that simple line so many years ago and why my wife chose to share it every semester with her students. The lack of intention on my part is perhaps central to its celebration.

Hope is the strength that keeps us going. If I could say it better today I would.

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Image: Pixabay

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Getting Your Shot

This month Kamala Harris got a step closer to one of the most coveted jobs in the world. It was anything but a predictable path. The preceding weeks were filled with anxiety and uncertainty. Through it all she remained fiercely loyal to her boss and the inside circle that provided her with the opportunity to someday be considered for the gig in the spotlight. Without much trumpeting, the door then opened and she proudly walked through it. She was ready.

That is not to jump the gun and offer any conclusions about whether she will be president. This isn’t even meant to be a piece about Kamala Harris. It’s about readiness. It’s about preparation. It’s about truly knowing what you want and putting yourself in a position where you might get there.

That kind of readiness is harder than most people think. Way harder. Exponentially harder.

If you’ve ever been in second position in any leadership capacity, you understand the difference between advising the person making a call and making the call yourself. They are both tough jobs requiring objectivity, empathy, careful analysis, diligent consideration, and consensus building. A bench coach in Major League Baseball is a vital and respected member of the coaching staff, but he’s not the team manager who will take the fall for a failed season. The provost of a university has a vast impact on the institution’s administrative and financial condition, but if the university fails to meet the goals of the governing board, it’s the president most likely to be under fire.

Often these second-in-commands long to succeed their bosses, and often they do. When the time comes, the key questions those in a selection capacity will ask encompass whether the candidate understands the gravitas that shifts in this role change, and whether that candidate is fully prepared for the unknown roadmap in their future.

I have written often that mentoring might be the best part of being a leader, but also one of the most difficult. We do our best to share perspectives, but each of us has a unique approach to things that may or may not be useful to someone else. Of all the gratification I have enjoyed in my career, none has been greater than watching younger careers flourish. Sometimes I have been able to offer guidance to a rising star looking to shore up his or her toolbox. Sometimes I have been able to explain the nuances of navigating a particularly counterintuitive negotiation.

I have seen ambition tempered by learning, and ambition undermined by hubris. I have listened to people lobby for a big promotion, asked them to consider fully if they understand the change in expectations once they get it, and watched the results go both ways. We do our best as leaders to ready the next generation for the ladder ahead, but ultimately that readiness is in their own hands.

Opportunity knocks when it wants, not necessarily when someone wants it. That can come in the form of a crisis, an unexpected competitive swing in the market, a change in surrounding personnel, an expansion effort willing to take a chance on new talent and untested ideas — all kinds of events and circumstances can unlock a mythical gate. Sometimes patience is on your side. Sometimes impatience serves you just as well. The question you must have already asked yourself is not whether you want what you think you want, but whether you are ready to tackle the unknown that you accept when you are asked.

In a memorable moment in the musical Hamilton, the young Alexander Hamilton sings the powerful refrain, “I am not throwing away my shot.” It’s a dramatic proclamation of self and an emotional manifesto easily relatable to a mirrored audience. “I’m a diamond in the rough, a shiny piece of coal,” he continues. He knows the coming revolution will call upon the best of all those who choose the life risk of demanding national independence. It is that combination of desire, conviction, and opportunity that puts him on the path to becoming a historical figure.

Does nineteen-year-old Hamilton really know what is ahead of him, the sacrifices he will make, or the ultimate result of his ambition? How could he? What he knows is what matters: he believes he is ready. He commits. That puts him on a remarkable path with personal evolution and history. His choices are intentional. The opaque path ahead is purely beyond his control, and still, he makes his mark.

Alexander Hamilton didn’t throw away his shot.

Kamala Harris isn’t throwing away her shot.

There were no shortcuts for either of them. No guarantees. No promises. No sour grapes.

If you think you know what you want, recommit to readiness. Hone your skills. If you have a mentor, don’t squander the opportunity to be in the room anytime you can. You’ll see good decisions and bad decisions in real-time. You learn from both.

Test yourself repeatedly. Question your preparation even more often. Learn not just how important it is to be right under pressure, but how to improve your odds of being right by building trust with those around you to vet a broad spectrum of possibilities. Learn the balance of risk-taking, the integrity of owning failure, and the cycle of learning that comes from measured mistakes.

Embrace clear and frequent communication even when you want to be alone. Build a substantial contact list and advice circle that is diverse, renowned, honest, accessible, and global. Network ceaselessly for what you can do for others with such modest expectations of reciprocity that help is always abundant long before you ask for it.

Know that the next step is not a cosmetic change in title with better perks. If you want the gig, find the regimen to train for it. Don’t be timid, but don’t catapult yourself into contention before you’re convinced you can launch.

Don’t throw away your shot.

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Image: BroadwayMerchandiseShop.com

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Sniff for Myth

The mantra of modern business decision-making is often tied to the basic concept of data-driven reasoning. If you hold a leadership position within an organization, you know that understanding data is a mandate. Data is the foundation for supporting a thesis, building consensus around a point of view, or building an argument for change. Data won’t tell us everything we need to know, and data can easily be misinterpreted, but if we aren’t looking at objectively collected data in forming an analysis, we might be better off buying lottery tickets than investing our company’s money in a resource-heavy plan.

If we know that data is essential to our success, and we know that critical decisions are better informed with data than without it, how is it that so many myths creep into the workplace? By myth, I mean a widely shared belief in a set of rules that a company has adopted without a sufficient test or challenge. In the worst of all circumstances, that myth may have no foundation at all.

As companies grow and practices become routine, repeated behaviors can be handed down from one generation of managers to another. I’ve often written about the notion of “but we’ve always” to point out the routines we come to follow without question, long after the reasoning for those practices has become obsolete. Most companies are guilty of this in one form or another. The good ones find a way to eliminate obsolete practices before they do real damage. Failed companies often find themselves immersed in a death spiral because they stopped questioning what made them successful and found it more expedient to repeat the same actions long after their relevancy left the playing field.

Each year in our cycles of strategic planning, we ask ourselves what is working and what isn’t. Data is often a great indicator in both directions. When we see metrics trailing downward and don’t ask ourselves why, we allow passive behavior to perpetuate itself. Often when we dig into that data, we find there are reasons something that was working no longer is creating the value that was expected. Several things could be going on: a once solid practice has become obviated, a proven practice that was working is no longer ardently being followed, or a practice has emerged from grassroots innovation to replace an existing practice because the people who created the variation come to believe it works — without proper data to support it.

Any of these cases for decline are possible, as are a host of others. All of them allow myth to replace math. When myth in a company takes over workflow, nothing good is likely to happen. It is always our job to sniff for myths — to question existing practices when data reveals a negative trend that must be corrected. Bringing deliberate change is what effective leaders do. Allowing myth to perpetuate is how once-great companies join the dead brand graveyard.

We are always fighting myths. We discover practices we put into place a decade ago were never updated for new technology. We discover a practice we reinvented to drive better results is quietly being rejected by staff members who either don’t like it or don’t understand it, but are sure they are helping matters by covertly sticking to the old practice.

Perhaps we observe a decline in KPIs and temporarily conclude something must be wrong with raw materials because we know the processing methodology we put in place is sound, only to discover that methodology has been misunderstood by the team members utilizing it. We may discover that a team’s interpretation of methodology widely differs from the guidelines developed, not because the guidelines are unsound, but because they have been explained poorly.

In each instance, a myth of what we are doing and why we are doing it overtakes what should be standard operating procedure. It could be an honest set of mistakes. It could be a misunderstanding. It could be a lack of rigor in reevaluating once-proven practices. Regardless of cause, data tells us if we are winning or losing in the form of metrics and dollars. If those signals are getting worse and we fail to delve into the practices behind the decline, we let the myth of proper functioning triumph over the innovation required to unseat the myth.

Company culture is highly efficient at enforcing rules. Veterans in companies are eager to tell rookies “how things are done here.” Sometimes rookies learn existing processes, immediately convince themselves there is a better way, and think they are doing us a favor by doing things that better way without a proper framework for evaluating results. Sometimes company culture is our ally and creates peer reinforcement of best practices. Sometimes company culture invents its own set of operating principles assuring the peer group everything is going as planned when that is not true.

Organizations function from an agreed set of rules, but often the origination of those rules is long-forgotten while the perpetuation of those rules lives on. Myth-busting makes old rules go away, ad hoc rules become exposed, and misunderstood rules become clarified. If we’re looking at data that tells us something is wrong, our intuition in identifying wrongness is only a first step toward correcting it.

Ask yourself if there might be a myth undermining your success. Then go look for it, and without embarrassing anyone, quickly build a consensus to reveal the misapplied rule. Do this often enough and the myths you sniff will be systemically corrected. No company can eradicate all its myths, but companies in constant learning mode can shorten the longevity of misconceptions and revitalize broken practices by reconciling conjecture with data.

That’s how teams get past myth and win together with shared understanding.

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Image: Pixabay