Archives: August 2011

Financial Times EXPANDED
First Things Before First Things

(Note: The Financial Times published a column of mine on 29 August. Editors must edit—and they did. All writers think editors are heartless; some writers, lucky enough to have blogs, can post the version they first submitted. Here it is, 1,200 words rather than the 700 that eventually appeared in print.)

There is no logic to this column.
Which is precisely the point.

I was initially trained as an engineer. (And have an MBA as well.) That essentially means that I am a slave to linear, logical analysis. Hence my presentations start at the start and I carefully build a logical structure for all that follows.

Fair enough. Except I frequently find that critical things I want to say get left out or buried. Hence, about a year ago I threw off my logical halter and decided to say what I thought was important, come what may, at the top of my remarks.

Consideration of business strategy, approaches to product development, and the like, are of the utmost importance to enterprise success. Yet there are other factors—perhaps mundane at first glance—that are the true differentiators between mediocrity and excellence. I'll touch upon four, which I call "First Things Before First Things." Most will agree that each one is important. But my goal is to induce you to convert them into strategic obsessions.

Front-line managers. If the regimental commander lost most of his 2nd lieutenants and 1st lieutenants and captains and majors, it would be a tragedy. If he lost his sergeants it would be a catastrophe. The Army is fully aware that success on the battlefield is dependent to an extraordinary degree on its sergeants. Does industry "get it"?

Research by the likes of Marcus Buckingham and Curt Coffman, reported in First, Break All the Rules, demonstrates that the first-line manager is the single most important key to employee satisfaction, retention—and productivity. No matter how fine the organization, if the employee is sour on his immediate boss, her or his performance will significantly suffer. I am not suggesting that execs don't take the front-line boss seriously. I am suggesting that, unlike the Army, they are not obsessed with developing their full cadre of front-line managers as a primary strategic asset and engine of enterprise performance! For starters: Are your font-line boss selection and training and mentoring processes unmistakably "knock-your-socks-off"/"best-in-class"?

Cross-functional excellence. Look at any organizational failure, and poor cross-functional integration is more often than not the chief culprit. Within an engineering company, for example, research, marketing and finance are routinely at each other's throats. The result is a critical new product comes to market 18 months late. Or take the local police and federal police: Each have the fight against terrorism as their pre-eminent goal—but frequently refuse to share all their data with one another. I chose in introducing this topic the word "excellence," as in "cross-functional excellence." That is, the idea here is not merely about "removing barriers." It is about what I believe is no less than the #1 opportunity to achieve competitive dominance—e.g., cut new-product development by, say, 50 percent or even more.

I have the utmost respect for Oracle and SAP. But this is not primarily a software issue. Or, rather, it is—but a softer form of software. Secret #1 (yes, I'll go that far) is "Let's do lunch." In fact I insist that bosses literally measure their direct reports on the number of lunches per month they have with members of other functions!

It works like this: Joe in procurement invites Sam in finance to lunch. Odds are high that along the way they discover a host of connections—e.g., both have eighth-graders in the same school. Joe will still tenaciously represent his "function" and Sam his—but the tenor of interactions is likely to change significantly, if not dramatically, from "gotcha" to something approaching "How can we jointly add maximum value?"

I call thing like "doing lunch" the "social accelerants" of cross-functional excellence. I can muster a list of 25 in a flash—e.g., present small weekly awards to those in other functions who have helped your team-function move forward. One should not promise miracles lightly, but taken together these notions can lead to miracles of the first order.

"Strategic" listening. Harvard M.D. Jerome Groopman wrote a fascinating book titled How Doctors Think. Dr. Groopman claims, not terribly surprisingly, that the best source for a doctor concerning the patient's complaint is—the patient. Yet he goes on to cite research showing that on average the doctor interrupts the patient after ... 18 seconds. I'll bet you a bundle that the average manager does not surpass the 18-second mark!

Like developing first-line managers and trying to improve cross-functional coordination, most bosses would agree that listening is "important." But, again, do they make it a strategic obsession? Because beyond a shadow of doubt that is precisely what listening per se should be.

I made a list of the things that flow from effective listening ("strategic listening" or "aggressive listening" as I prefer to call it). Listening is ...

the heart and soul of engagement,
the heart and soul of recognition,
the heart and soul of strategic partnering,
the heart and soul of learning,
the heart and soul of customer connections.
And on.
And on.

As with all things important, the key is becoming a serious student and practitioner. In fact I'll go so far as to say that listening per se is/can be a "profession" ... as much as playing the cello or flying a commercial aircraft.

Meetings. Find me a boss (or non-boss) who doesn't constantly bitch about "too many meetings"—I've never found one. But here is the irreducible fact of "boss-world": Meetings are what bosses do. There is no escape. And if that is true, then, also by definition, meetings are therefore the principal platform, or theater, in which every boss projects her or his leadership skills.

Immutable "bottom line": Every meeting that does not stir the imagination and curiosity of attendees, and increase bonding and co-operation and engagement and sense of worth, and motivate rapid action and enhance enthusiasm is a permanently lost opportunity. Call that a stretch if you wish—but then please explain to me why it is not the self-evident truth!

Let me be clear: This is not a rant about "conducting better meetings." This is a rant about the heart and soul and hour-to-hour reality of leadership effectiveness. One obvious implication: Prepare for a meeting/every meeting as if your professional life and legacy depended on it. Because it does.

There they are: "First things before first things." None, I strongly suspect, would disagree with the fact that all four are "important," even "very important." But it is my claim here that the four are in fact the "guts" of effective organizations—and, in fact, sustainable competitive advantage. Make each of these an "obsession"—and watch the bottom line soar.

Best of the Cool Friends
David Maister

One of Tom's frequent themes is the need for all businesses—that is, all, minuscule to gargantuan—to conduct themselves like Professional Service Firms. Furthermore, Tom recognizes David Maister as the world's leading authority on the management of professional service firms. So, in the second of the Best of the Cool Friends series, we'd like to revisit the interview Erik Hansen did with David Maister in October 2000, which contains some very up-to-date insights. If you'd like to catch up with David's more recent work, you can do so at his website, or check out his latest book, Strategy and the Fat Smoker (meaning: some habits are hard to change!).

TLBT Video #67
Strategy: Best Practices, Love ‘Em and Hate ‘Em

Now at YouTube, the latest video of The Little BIG Things Video Series, in which Tom explains that following best practices as a business strategy can be effective ... or not.

You can find the video in the right-hand column of our front page, or watch it here (Time: 2 minutes 21 seconds). Also available is a PDF transcript of the video's content: Strategy: Best Practices.

Entrepreneurial Mexico

Tom is in Mexico City (for about the 25th time, he estimates) speaking for his colleagues of 25 years standing, the HSM Group. The event is a Congress of about 3,000 people. All are from SMEs/Small and Medium-sized firms. The event is sponsored by Banamex, to launch a major initiative in support of the SMEs; in Mexico, as elsewhere, these firms are the engines of national economic growth and job creation.

"This scratches one of my great itches," Tom says. "'We 'gurus' have systematically neglected these firms—to our everlasting discredit. This is part of my vigorous campaign to atone for previous sins."

HSM Entrepreneurial Mexico, 18 August 2011


I have about 3K slides in my "Master Presentation." These are either "the most important," or, surely, in the Top 1%:

Arie De Geus, The Living Company (father of "scenario planning" at Royal Dutch Shell): "Rose gardeners face a choice every spring. The long-term fate of a rose garden depends on this decision. If you want to have the largest and most glorious roses of the neighborhood, you will prune hard. This represents a policy of low tolerance and tight control. You force the plant to make the maximum use of its available resources, by putting them into the rose's 'core business.' Pruning hard is a dangerous policy in an unpredictable environment. Thus, if you are in a spot where you know nature may play tricks on you, you may opt for a policy of high tolerance. You will never have the biggest roses, but you have a much-enhanced chance of having roses every year. You will achieve a gradual renewal of the plant. In short, tolerant pruning achieves two ends: (1) It makes it easier to cope with unexpected environmental changes. (2) It leads to a continuous restructuring of the plant. The policy of tolerance admittedly wastes resources—the extra buds drain away nutrients from the main stem. But in an unpredictable environment, this policy of tolerance makes the rose healthier in the long run."

David Lascelles, Co-director of The Centre for the Study of Financial Innovation [UK]: "Since merger mania is now the rage, what lessons can the bees teach us? A simple one: Merging is not in nature. [Nature's] process is the exact opposite: one of growth, fragmentation and dispersal. There is no megalomania, no merging for merging's sake. The point is that unlike corporations, which just get bigger, bee colonies know when the time has come to split up into smaller colonies which can grow value faster. What the bees are telling us is that the corporate world has got it all wrong."

Why It's Time To Compete on What You're Thinking

[Our guest blogger is Ian Sanders. He runs an ideas consultancy where he creates and delivers ideas to solve challenges, facilitate growth, and help businesses stand out from the crowd. His new book Zoom! The Faster Way To Make Your Business Idea Happen is due out in November 2011.]

It's the holy grail for every business, whether you're a freelancer, a start-up, or an established brand. How the heck do you stand out in a crowded market? Awesome product functionality or a niche specialty may only get you so far as a differentiator. So instead of marketing your product benefits, try communicating what you're thinking: your personality, your ideas, your attitude. Communicating your thinking—thought leadership marketing—can be really effective in resonating and engaging with your target audience.

Of course this is nothing new. We've always made brand choices based on what businesses think. That's why we fly Virgin, drink Starbucks, ride a Harley. We get what a brand stands for and we either line up behind it, or we run a mile.

Here's the opportunity. There's a long tail of small businesses right down to the one-person work-at-home enterprises that spring up by the hundreds every waking hour. This is where the marketplace is at its most abundant: similarly qualified, similarly positioned, similarly priced, smart boutique businesses. Creative agencies, digital companies, copywriters, web developers. Who do you pick if there's only a cigarette paper between their offerings? You pick the woman who demonstrates her expertise via her weekly blog; the business that provides a monthly video update of industry news; even the business owner who posts a daily picture of her products on Instagram. In sharing their expertise they're also giving an insight into their personality. So let's redefine the genre here: "thought leadership marketing" doesn't just have to be about publishing academic papers or writing posts for the Harvard Business Review. It's whatever content works for you, your business, and your audience. A blog post, a tweet, a newsletter, a video sharing your business tips, even a blackboard out on the street communicating your "Thought For The Day."

Back in 2008, Tom told the audience at the Inc. 5000 conference "If you're not blogging, you're an idiot". He was right. And he'd probably say the same today about Twitter. Because together with LinkedIn, Google+, (and whatever next month's hot new platform is) we have a bunch of tools available that provide a free platform for thought leadership.

The good news is that communicating your thinking does not discriminate on size: instead of s/he with the biggest budget wins, it's who can demonstrate the original ideas or the fresh thinking. So if you're a freelancer or small business, why aren't you blogging? Why don't you put your thoughts out there, why aren't you shining a spotlight on your DNA? Don't assume it doesn't matter—customers want to deal with experts and they need to see evidence of that. There's no point making claims about how innovative your business is if you can't back it up, if you can't prove you're living and breathing it.

King Of Shaves is a shaving brand that's become a success in the UK and is now entering the US market. Founder Will King may not have Gillette's ad spend but he plays out a David vs Goliath tale, competing with the big guys via Twitter and social media. Will is doing more than selling razors and shaving foam; he's engaging with his audience 1-to-1 through storytelling and giving advice to the entrepreneurial community. That's how he—and his business—stand out.

Don't miss out on the thought leadership marketing opportunity. Remember, you don't have to be the biggest or the best to stand out; you just need to have something interesting to say.