Lean

Business and Politics: Avoiding Your Organization's Fiscal Cliffs

One of my areas of expertise is tracking how business and politics intersect in the ways they operate - and, most importantly, what we can learn from both. Over the years, I've written strategy papers on the subject as well as having advised senior members of United Kingdom political parties on how business strategy can be applied to create political party success.

With all that's been going on in US politics recently, I've decided to begin posting on the subject - only in this case, focusing on what business can learn from how politics operates, at its best and at its worst.

There are important strategic, operational and profit-related lessons to be learned and applied to your business, so, no matter where you live or what your political affiliation might be, put it aside and just look at the process.

I'll look forward to your thoughts and comments.
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On January 1st, 2013, a few minutes after 11 pm, the United States House of Representatives voted to accept the Senate's bill (approved some 21 hours earlier) averting the so-called "Fiscal Cliff."

As markets around the world opened for their first trading day of the new year, they upheld the conventional wisdom that a global economic catastrophe was averted. Markets and futures were immediately up and could well stay that way. At least until the already known next 'cliff' occurs in two to three months.

So, good for Congress. They did their job. They saved the world. For the moment.

They should also be ashamed of themselves.

The reason why they deserve real scorn is because it was this exact same Congress that agreed to the "cliff" in the first place. That was in December, 2010.

Twenty-five months ago.

Why did they create the cliff? The logic was that it would motivate the elected officials to work together to solve the debt and deficit problems the US is facing.

From then until now - while those twenty-five months passed with the cliff always looming - they weren't willing to do what needed to be done for their own country as well as those world markets and economies. Right up until the last minute - and only then because it was the last minute.

Okay, so that's the politics of it. What does this have to do with you?

Like it or not...admit it or not...but you have your version of a cliff playing out in your organization on a regular basis.

It's those things that you and your employees at every level see and know and recognize out on the horizon that you'll take care of later. Some day. Soon. You're sure of it.

Only those 'things' - both little and big - grow to outrageous proportions the closer they get to whatever time limit within which you're working.

Maybe it's when your customer needs an order filled. Or you've got a new product or service launch that needs that one more thing to make sure everything goes smoothly. Or there's an expert you know you're going to need to hire to make sure that the strategy you're currently working has a chance in hell of actually succeeding.

It's anything that escalates from knowledge to emergency - simply because you or someone in your organization let it get that far.

And it gets worse.

You may well have someone you trust who has made a success of their career swooping in at the last moment to save the day.

That's all well and good when the emergency is a true emergency - not a manufactured one. If it's the latter, then whoever is playing 'hero' is anything but. In fact that person - man or woman - is the equivalent of an organizational sociopath...allowing that particular cliff to loom and get ever closer for their own purposes, frankly, not caring how it might impact others.

Including you and your business.

Because if the 'thing' escalates far enough for long enough - at least to suit your local sociopath - even with a save, you'll lose your reputation as a trusted provider. There go the orders, customers and jobs. And there goes your business.

So, as this year begins, spend some time on your own and with your leadership team to:
  1. Take a look back over the past six to eighteen months
  2. Identify those situations that escalated into crises
  3. Determine how those crises occurred (real or manufactured)
  4. Define how long in advance the problems were known
  5. Determine in each case how long it took to get from knowledge to action
  6. Specify the outcomes in each case - including but not limited to impact on operating costs, revenues, profits, customer relations, market share, reputation, etc.
  7. Identify the specific functional areas and their respective managers/team members involved in each crisis
  8. Determine whether there is a trend of occurrences by any of the people or functions involved.
As well, if you have a Lean initiative going, take the time to review the teams' measures to identify any trends from the data that show highly risky levels of variation in your processes.

Once you have the information in hand - as uncomfortable as it might be - you'll know what to do. Do it. While you still have the time.

Because the biggest difference between business and politics is that the politicians who took the US to the edge of the fiscal cliff have at least two years before there is a remote possibility of being held responsible and accountable.

For business...for your business...you don't have that luxury. 

Figure out your cliffs now - and then manage your organization so that you're designed never to get close to them again.

The Secrets of Success: Stop Whining and Start Changing

A few years ago, I was in one of my clients' offices and saw a sign that looked like this:


Nice thought. Not going to happen - unless something changes. People. Processes. Something.

So, let's talk about whining and change for a moment.

The reason that you or others complain (hopefully not whine) is because you don't like what's going on. Things aren't clear or consistent or rational. Priorities keep changing. You don't think the priorities should be what they are. There are too many politics being played out - all to the detriment of the organization...and possibly your career.

It gets worse.

There are innovations that you and others keep talking about that you want to put into place - but no one listens.

There are products, services and ways of doing business that would make the company more successful, your job easier and your life, in general, more enjoyable - but no one listens to that, either.

Okay, here's the thing. If you find yourself - in your head or out loud - sounding anything like what you just read, it's time to change.

Dissatisfaction is an indicator. But it's on you to make sure that dissatisfaction doesn't escalate into misery - yours or others'.

It just means it's time to change. Because you want to. Because you don't want to be dissatisfied anymore.

Sure there are things you can't control - but, let's face it, the higher-ups in your organization don't have a clue about what you're doing anyway...otherwise they probably wouldn't have let things get into the shape they're in. (You hope.)

So, start changing things. Little things. Then bigger things. Don't wait for permission - and, seriously, don't wait for some sort of organizational initiative that promises the world. It won't deliver.

And, whatever you do, don't wait for or count on consultants. They're really not going to solve your problem.

It's on you. Just as you do at home - where you're CEO, CFO, COO, CTO, CIO and more - if you don't like it, change it.

Do it in increments. Try things. Get others to join in the fun.

Every time a whine occurs, say, "Yeah, fine, but what's the answer?" Then, with the whiner in tow, say, "Okay, so, how about if we try...? And, no, we don't have to go ask permission. They may say 'no.' Let's just fix it."

If they're game, good. That's someone you want to stick with. If they're not game, lose them. They enjoy whining. It makes them happy. So, get them out of your way.

Which leads us to the last part of this particular secret: Look at yourself objectively the next time you find yourself whining. Because you may be a happy whiner - in which case, get the hell out of everyone else's way.

You may be happy being miserable, but there are lots more folks out there who are most happy when they're engaged, fixing things and being rewarded for their efforts.

Innovation and Productivity: How's Your Infrastructure?

When you think about infrastructure, you tend to think roads and bridges. That's because the talking heads who talk politics always put infrastructure in that context.

As far as that goes, it's correct.

But, if you look at all the components of infrastructure - and then apply them to your organization - what you quickly see is that those "roads and bridges" are representative of how you and your organization are getting where you're trying to go.

What are you building? And how?

What are your policies and procedures? Are you consistently looking for opportunities to become more effective and efficient? Measurably?

Do you listen to your employees? Do you give them a chance to contribute and feedback information about the obstacles they face...without you becoming defensive?

How well trained are your employees? By whom? Are you ensuring your employees have all the knowledge and skill they need to demonstrate the ability you're looking for from them?

Do you have systems for innovation and expanded participation? Do you regularly work to collect new ideas from your employees, customers and suppliers that lead to new products, services and ways of doing business?

What you'll find is that the less you pay attention to those questions, the more organizational traffic jams you create and the slower your organization is able to perform and deliver. (Think the LA Freeway system in the heart of rush hour and you'll get my drift.)

Take some time to observe the infrastructure you've got. Then build the roads and bridges you need in your organizational infrastructure to create the success you always envisioned.

You'll definitely get where you want to go...because you'll have built what it takes to get there.

Lessons from Facebook: It's All in the Measures

Today is the day that the first group of Facebook "lock-up" shares, post-IPO, go on the market. The analysts (in all their always fascinating wisdom - and, yes, I'm being sarcastic) told us it would be a bloodbath from the moment the markets opened. Then they told us that we wouldn't know for a day and a half. Then they said it was already accounted for because everyone knew it was going to happen. Then they said it's really November - when the next, much larger, tranche of shares are unlocked - that anything is really going to happen.

What all of this tells you is that - pretty much always - you shouldn't listen to the people who are measuring your organization as outsiders. They don't know your business. You do.

The question is: what do you know...and how do you make the best use of it and other measures you need?  Here's the answer.
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The expression "You manage what you measure" is not only true, it directly impacts the way you run your business in the short and long term.

Let's use Facebook as an example. At the time of this writing, the company has over 955 million users worldwide - nearly half of whom use the service each day. And in the company's early days, big user numbers was exactly what they needed - so that's what they measured.

But now, it's not about the number of users. It's about how the users use the site. Because to succeed in the long-term the company needs to convert those users - on their and their advertisers' behalf - into sales.

What does this have to do with you? Everything. Because just as Facebook is actively redefining what's important in their measurement systems - based on data they have and data they need - you need to do the same.

Now you may be saying, "Oh, that's Facebook. They're big and they're a technology company. We're different."

Sorry, but no, you're not. In fact, every company in every industry that has succeeded or successfully pulled itself up - whether out of bad economic cycles or complete changes in the competitive landscape - always does so through their measures.

Because you manage what you measure.

The way you want to think about this is as a form of executive and management creativity. That you and your team are going to move away from the measurement equivalent of "[we/our industry] have always done it that way" and recognize that there's rich information that you're collecting - and that you're not.

Start by asking:
  • What measures and opportunities are we looking at - because we're used to them - and, as a result, missing others?
  • Do our current measures give us the information we need to understand both existing and emerging markets - local, domestic and global...in and out of our expected sector?
  • Do we have measures that combine real-time (i.e., process), predictive (i.e., strategic) and alternative (i.e., soft) as well as results (i.e., backward looking)?
As you expand your measures, so, too, will you expand your success.


You Didn't Build That...Or Did You?

Just so you know, it's a trick question.

That's because the answer always is: Yes. You did.

How do I know? That's an easy one to answer: If it's yours - from start-up to SMB to multi-national - if you're at its head at this moment...whether first line supervisor or CEO...you built it.

Did you do it alone? No. Could you have? No. Will anyone ever build anything in business alone? No.

Because it doesn't work that way. Excuse the Kumbayah vernacular, but it really does take a village - no matter what kind of enterprise you've built or are trying to build.

The question, therefore, isn't about whether or not you built it. The questions you should be asking are:
  • Is it what I want?
  • How did it get this way?
  • How much history is driving our present?
  • How much is that helping or hurting us?
  • What do we need to change?
  • How've we been doing in making those changes?
  • What do we need to do differently in successfully executing the changes we need?
  • What kind of data do we have to tell us that any of the answers to the questions we just went through are actually true?
  • What kind of measures do we need to ensure we know what we're talking about now and for our future?
And those questions are just the beginning. 

Take it as said: You built it. What you want to know - and act upon - is: What do I want to do with it?

That's when you'll create the success you seek.

(If you thought I was going to go play with the politicians on this one - not this time. Frankly, when it comes to this, they don't know what they're talking about anyway.)