The Walton Group, Inc.

Advisors to senior management on matters of strategic importance.

 

We are seasoned executives who have successfully served CEO’s and corporate leadership teams in designing breakthrough strategies, dynamic organizations, and effective operating processes that accelerate profitable business growth.

Filtering by Category: Growth

The weird but important link between strategic planning and culture...

Peter Drucker once famously quoted that "culture eats strategy for lunch!" I could not agree more strongly. This clever comment actually points to a significant and important connection between strategy and culture that may not always be obvious.

On the surface Drucker seems to be implying that culture is more important that strategy. That gets the strategists up in arms. However, I think Drucker is alluding to the fact that misalignment between strategy and culture will end up with culture subjugating strategy.

Why is this point important?

When we plan for the future in our business, envision new opportunities, dream about future outcomes, etc... we need to be aware of our human incentive systems. Those unspoken and often unconscious elements that drive the behavior of the people in our organizations. When we make plans that are not naturally supported by the reward systems in our business we are destined to see them come into conflict.

A classic example is when compensation is used to motivate a sales team to sell a new product. If the product is new, the sales cycle is different, or there is risk involved in promoting the product to existing clients it is almost axiomatic that the sales team will fail to effectively rise up to the economic incentive. Sales leaders are baffled. After all, aren't salespeople reward motivated players?

The failure here is that the social pressure to NOT FAIL almost always trumps the value of economic rewards. We know this is true because we live in a world where people continuously and consistently fail to take necessary actions to succeed, even in the face of overwhelming evidence. We don't make cold calls even though cold calls lead to opportunity. Rather, we avoid the pain of rejection and rationalize our behavior.

This misalignment of incentives and culture will crush the best plans on paper.

Want to succeed where others fail? Figure out what really, deeply, and emotionally drives your team. And then setup your processes and plans to take advantage of that natural wiring. It isn't easy to do, but when it's done, it's magic.

Macro vs. Micro Optimization

Traffic systems, lights, routes, etc.. are all designed based on the idea that people will follow traffic rules. And, if we all followed those rules, I suspect traffic would rarely be a problem.

But we don't. At least not all of us. And if only a few of us break the rules the consequences for everyone else will be small. And the advantage to those few rule breakers is HUGE!

After all, if just a few decide to pursue what they want at the expense of others (in this case speeding, cutting in line, etc...) they can get a huge personal advantage.

But here is where things get interesting...

When everyone else realizes that they are being "gamed" by a few, they will begin to adopt the same behavior. At the point where enough people are all seeking self-optimization the entire system breaks down. Now we are driving too fast to match light patterns, we are crowding exits, we are cutting in line, and everyone loses!

The same thing happens in business.

I seek to optimize the way my department works.

Generally for good reasons. But not always.

I want to do the best job I can, add as much value, support my team, or perhaps avoid conflict, reduce work stress, etc...

But sometimes my best process makes someone else's job more difficult. I squander the advantage I gain for the group by breaking another part of the process. Micro-optimization!

This happens when finance imposes extra process for expense reimbursement to simplify their data entry process. When sales uses extra discounts to win business with less effort. Whenever the answer to the question is, "that's policy!"

Better is macro-optimization.

Macro-optimization is when we subordinate what we want for ourselves as individuals to gain something better for ourselves as a whole.

But to do that, we need to get really good at seeing the world from others points of view. And generally we are not very good at doing that.

Challenge: Try intentionally seeing the world through the eyes of someone you work closely with in business. Ask yourself, "What part of their job could I make easier and more effective by changing how I work?"

Then do it.

What you really mean...

I don't have time. I don't have enough money.

I don't know how.

All good excuses not to do something.

But rather than just accept those statements let's understand what we really mean. What we really mean is...

I have other things I prefer to do with my time, my money, my energy. Usually those are important and legitimate things. We must care for family. Meet work obligations. Focus on our basic needs.

But not always!

We fall into the trap of believing the excuse rather than acknowledging the truth. Everyone has the same amount of time, some just spend it better.

Q: Where do you need to spend your time, energy, money, or effort differently?

Doing vs. Being

You have a bias for action. That doesn't make you flawed, it makes you human. But, it is for this reason that you will naturally value accomplishment over character, result over method, and reward over sacrifice. It's not you, it's the world you live in.

No one consciously makes that choice. In fact, if asked most people would state that they value character over any result.

We just don't see it demonstrated very much...

It's not a lack of desire, it's a lack of focus. Learning to BE involves a conscious choice to focus on the nature of our character and let that lead to results.

When you focus on BEING first, doing happens naturally. When you focus on DOING you end up BEING something by accident and not intent.

As you think about the new year starting, who do you want to pursue BEING this year?

Undone is useless...

Almost 20 years ago I had an idea. A good idea, at least I thought. Probably not as good an idea in reality.

But, I was convinced.

In Seattle on business I got tired of being rained on. More specifically, I got tired of getting wet from the umbrella getting in an out of the car. And then I had an inspiration.

If you could just open the umbrella from the opposite direction, the wet part would close into the middle. Simple.

I drew plans. Contacted some engineers for design help. Looked into manufacturing. Sized the market opportunity.

AND DID NOTHING...

I got busy. Or bored. Or distracted.

Then, a few weeks ago I saw the picture above.

Someone did the one thing that I could not seem to do, finish.

Undone is useless.

What do you need to do today so you don't miss the opportunity to create?

Ice cream and revenue growth

If you ate ice cream every night you would suffer the consequences. Weight gain being principle among them. Ergo, if you want to lose weight, skipping the ice cream is a good idea.

If you eat the ice cream and are unable to lose weight you would know who to blame.

It's simple cause and effect.

If your are trying to grow your top line revenue the same principle applies. Most organizations, either directly or implicitly, try to apply more of the same effort to get more revenue.

That might work.

A little.

Companies that achieve breakthrough growth know getting a result you haven't gotten in the past will require doing things you have never done.

Stop putting more effort into the things that aren't producing the results you desire. Find the thing you aren't doing that will change the game.

It's usually a whole lot harder than what you are doing today. That's why it's so valuable. And why it produces a different result.

Q: What do you continue to do that fails to produce results you desire? Why?

What was your dream?

When you were little what did you dream of becoming? A fireman? An astronaut? A doctor? A football player? I bet it wasn't an accountant. Or a sales rep. Or even a middle manager.

Those are all worthy jobs, but where did we lose our dreams?

Do you have any dreams left? What's your dream now? What was your dream as a child?

Rube Goldberg and Management

There is an old adage that reads, "Every organization is perfectly designed to get the results it gets." It's a cute and clever way of expressing a really important point. If you don't like the results you are getting you need to change the design. Most of the leaders and executives I work with get this intuitively but spend an inordinate amount of their time doing what I call "additive management".

Additive management is the process where we create increasingly complex layers of policy, bureaucracy, and process to attenuate or diminish the undesired outcomes from our previous policies and processes. This leads, over time, to a Rube Goldberg type of corporate complexity. Institutional knowledge becomes pre-eminent over capability and expertise. After all, the more complex the system, the more it rewards those who understand it best.

We have all seen this in action in our companies, or government, and even our culture. The new rules grow from the old rules more than they grow from the original purpose or mission. A common example is when changes are made to sales compensation plans to drive results around specific products or customer sets. This is complex to manage, hard to get right, and often produces unintended consequences.

You can fight back! It is possible to resist the natural inertia to simply layer more "rules" on the system. You have to get back to the beginning. Create intentional focus on ground up design decisions to produce the results you want.

You will find yourself with less to manage, less things that can fail, and improved results. Guaranteed!

A life of adventure...

When was your last adventure? Your last real adventure?

Not just a trip. Perhaps it was taking a new risk, starting a new activity, or facing an old fear.

When we are children we are wired for adventure. Everyday is full of new opportunities and activities. Sometimes it was just climbing a tree or building a fort. Other days it was making a rope swing. What was important was that we weren't limited by what we thought we "should" do but by what we thought we "could" do.

Do you still live that way? Most people don't. We lead lives of self-protection and emptiness. We worry over mortgages and irrational fears. Don't eat red meat, be a vegetarian. Eat red meat or you'll become anemic.

Really?

Don't you ever want to just try something crazy and new? Push the envelope? Take a risk? Start a business? Write a book? Climb a mountain?

Or will another long day of work followed by dinner and a little TV still do it for you?

Having a plan...

It's just about resolutioners time. You know what resolutioners are, right? People who establish their goals based on the awkward and painful failures from the prior year. After all, no one makes a resolution to help more orphans. The people who are helping orphans just keep helping them. No one makes a resolution to love their kids more. They just keep loving their kids.

We make resolutions as a last ditch effort to get serious about the problems we generally aren't willing to take seriously. Exercise, diet, and financial responsibility being chief among them. But, let's think about that for a moment... We need to make resolutions about the 3 things we most consistently are presented with each day. Really?

I like the idea of a resolution in that it's a short version of a plan. However, I would propose that for it to really have effect you must write it as a grocery list of future accomplishment rather than a review of past regrets. For example, don't vow to lose weight this year. Instead commit to weigh a specific amount. Failing to be specific is like going to the grocery store hungry and without a list. Everything is a good idea when that happens.

Don't spend your year picking up life's Oreo's. Anyone can do that. Spend your life becoming something with intention.

This is real religion...

My 11 year old daughter came to my wife recently with tears welling up in her eyes. "Mom, I think this year you shouldn't buy me any Christmas gifts. Instead we should give the money to feed the poor or something like that."

My wife asked why she felt this way so suddenly. Her reply, "I was reading my bible and it seems to me that the way that Jesus instructed the first Christians to live doesn't look like how we live. But, I'm really struggling with this..."

"Why," my wife inquired.

"Because I want stuff!"

Me too. I'm sorry to say that I want stuff. Maybe not like when I was a child. And certainly not because I have everything that could be had. Simply because I see new and shiny things, and I want them.

I DON'T think we should aspire to asceticism or self-denial as a means of pleasing God. I DO think we should seek ways to obey God that demonstrate that He is bigger than our desire for the things of this world.

And I hope that I can sincerely feel the tug and tension that my daughter feels. To want to put the needs of others before my own.

Pastor Craig Groeschel once asked, "Does your heart break over the things that break God's heart?"

That's a great question...

The Myth of Whitespace

I just need to get some things under control, and then I will [fill in the blank]. We've all said it. We've all meant it.

We need more whitespace in our lives. More room for thinking, creativity, rest, and dreaming. Sometimes we need whitespace to get our relationships right, our health right, or our spiritual condition right.

There's just one problem. No one ever seems to find whitespace. It's a myth.

What you can find is that if you fill your busy time with the right things, schedule what you want your whitespace to be about, you will find what you really need.

Stop chasing the whitespace and start doing what's important.

Faith and Diving Boards

Many years ago on a family vacation we found ourselves at a pool with a high diving board. The old 3-meter kind you rarely see anymore. My middle daughter, Brittany, was entranced. Only 8 years old at the time, she was determined to jump from the high dive.

There was only one problem. She was terrified.

Captivated and terrified. Motivated and paralyzed.

So on the board she stood, shaking in her nervousness. But she would not come down.

"Dad," she asked. "Will it be okay?"

"Yes," I assured her. "You will be fine."

And still she stood.

2 minutes passed.

5 minutes.

So I asked her, "Do you trust me? Do you know that I would never let you do anything that would hurt you?"

She looked me in the eye, stopped shaking, and jumped! And then, she climbed up again and again, all afternoon.

I'm a lot like that. I am compelled to do something, be something, or try something. And I hesitate, afraid of failure or risk or embarrassment. And I ask God, "Will it be okay?" And He asks me, "Do you trust me?"

What my daughter made me realize is that she didn't fully trust me when she jumped. She wanted to believe she could trust me. Jumping was the way to fully know. In other words, her faith and trust were not confirmed until she jumped. After she jumped, when she had walked in her faith in her father, her faith was perfected.

And so, years later, I stand and wonder if I can trust God with what He has called me to. And I ask Him to make my faith perfect before I jump. But it doesn't work that way. My faith is made perfect when I jump.

Are you waiting for God to perfect your faith? Make you complete? Maybe it's time to jump.

The 3 Reasons Business People Lie

I have been blessed to work with hundreds of senior executives over the last 10 years. Each one, in their own way, has surprised and challenged me. Yet there are some things that I have found to be universal. For example, not once has an executive ever confessed to me that they are really, inherently dishonest. In fact, without exception, they have all spoken of a desire to be high integrity, high character leaders. Men of their word. Truth tellers.

And most of them have lied. About something. Something important. Myself included.

Which makes me wonder, why would these otherwise capable and competent people lie. Not about little things, but about important commitments, failures, mistakes. Stuff that counts.

Fortunately I work in a full time laboratory of leadership and have plenty of candidates for research. Those efforts have yielded the following conclusions regarding business lies.

Reason #1 - Unrealistic Optimism

Earlier this year I ran across an interesting statistic regarding depression. The study noted that people suffering from clinical depression consistently rated their own abilities with a high level of accuracy. Fair enough. What follows that thinking is of greater interest to me. The secondary consequence of this statistic is that emotionally healthy people consistently over-rate their own abilities. This includes over-rating expected outcomes from business efforts as well.

With that as a starting premise it's no surprise that business commitments are quite often made with lofty expectations. Expectations that are rarely fully realized. And it is these expectations that set up the second part of the problem.

Reason #2 - Linear Thinking

Most people think in a linear way. Statistics vary, but in general over 90% of business leaders process information in a linear fashion. This is a practical, realistic, and systematic way of thinking. But, it has it's traps. As an example, linear thinking most often means that current conclusions are drawn directly from preceding events. That being true, it's very difficult for linear thinkers to naturally reset their assessment of decisions and causality to a larger and more holistic set of elements.

This only becomes an issue when you marry that information processing approach with the previously referenced over-optimism. Imagine a critical business commitment made based on unrealistic optimism. When that optimism fails to bear itself out in real results it is almost endemic that leaders re-think (and rationalize) their prior decisions. In practice, this looks like waffling or outright dishonesty to an outside observer.

Reason #3 - Short Memories

The last part of the problem is actually the simplest but the most insidious. Leaders suffer from information overload. And it's not getting any better. With so many facts, demands, and stresses on business people it is impractical to expect anyone to fully remember every commitment and decision. Bundle that problem with the prior two reasons and you have a perfect storm of missed expectations, revisionist history, and forgotten promises.

No, these aren't the outright lies we ascribe to the stereotypical "sleazy" Enron type of business personality. These are a worse kind of lie. They are the rationalized, justified, failed commitments that happen everyday.

So, how do you keep yourself honest?

You can't un-bake the cookie...

My 11 year old goes by the nickname "The Little Chef". She loves to cook and is quite good at it. As she made some of her famous Monster Cookies one evening she became concerned that they might burn. I reminded her that I always preferred my cookies a little on the soft and chewy side so if we took them out early there was little risk. And, I added, we can always stick them back in the oven if necessary. She thought about that and wisely responded, "Yep, you can't un-bake the cookie."

Aren't there a lot of cookies in our life we would like to un-bake? Comments we have made that hurt others? Money we have spent? Choices from our past? While grace and forgiveness can restore our relationships after our mistakes, the reality is that often we must live with consequences of those decisions. Burnt cookies.

I'm relieved because of those that have forgiven my stupid past decisions and behaviors. I'm incredibly grateful for opportunities that have allowed me to thrive even after bad choices. But, I have eaten a lot of burnt cookies too...

The idea makes me a little more careful. A little more aware. And a little more responsible. I am grateful I have grace and mercy to fall back on, but I will resolve, every day, to make sure I don't burn the cookies that count with the relationships that matter most.

On negotiation…

Don’t ever, ever, ever, ever negotiate.  It’s a statement, that in effect, you were trying to get more but will settle for less.

Instead, change the terms.  Reduce the offering, increase the deliverable, or if necessary, restart the sales process so you can communicate your value.

It’s simple.  Your integrity is more important than your margin.  If you can’t justify the value, don’t start dropping the price.  Unless you sell a commodity you will lose, every time…

Copyright 2015 The Walton Group, Inc.

(404) 405-2825