Agility is in everybody's mind. And yes, its principles can help any part of the business to build lasting success in an environment that is complex and ever-changing.
Tigerhall invited me to a series of podcasts to share my experience with agility in the manufacturing and financial service sector. Here is the first episode!
How do you enable your team to define their change journey from within?
Together with David Newton, we are organising a workshop series called CFOs Leading Business Intelligence. Last week, I talked about decision making in this context. The financial teams are very good at planning and analysing business data. And we need to understand that all these activities are directed at making better business decision and at the betterment of the business we are in.
When it comes to decision making, there are two main areas we aim to improve: speed & quality. How often do you experience delays in your decision making process? And, how confident are you that you are making decisions that are solid and considering all the data we have?
In my presentation and during the panel, we discuss to major elements: decision making bias and decision modelling. Please enjoy this recording.
Next week, we will conduct session for: Change Management. Please sign up with the link!
We often talk about high-performing teams and trying to find recipes of success. In this context, it is important to look beyond short-term gains and work with establishing a platform for lasting success. At Hive17 Consulting, we like to look at different drivers for change:
How can we establish a solid human connection?
One important element of establishing healthy relationships is trust - an understanding that we can rely on each other. Trust is typically between two individuals. In order to cultivate trust within a group of people we need to create a safe environment. We then want to look at what is psychological safety and how to establish such a place. And there is no easy path to achieve this.
First of all, how is it not done. During my advisory and coaching activities, I have observed a number of teams and supported them to create a positive, collaborative environment. With one group of people, I observed something interesting. When the regular group was meeting, they had a open, respectful conversation and were easily able to bring issues on the table and then solve them. Then, a new person joined these conversations and immediately that openness was gone; the original group was not comfortable to speak up. This shows that each individual in a group is contributing to that safe space. And one thing is clear: stating that this is a safe space is not creating psychological safety!
Laura Delizonna, from Stanford University, shares here how we can increase psychological safety in our team:
In order to creating lasting success, you need your team to be creative, you need them to feel comfortable to experiment and possibly "fail" (learn is the better word). Removing negative barriers created by lack of safety allows to build on the knowledge, experience and intelligence from everyone in the room.
How are you building a high-performing team?
Source: High-Performing Teams Need Psychological Safety. Here’s How to Create It, Harvard Business Review, August 2017
Back when I was working in Europe, I had my tradition to be in the office over Christmas. Undistracted and focussed working time - that is what I was seeking. And I experienced in these weeks that I was able to complete a lot more work in the 5-6 hours at my desk. And here I am reading the scientific evidence of that:
“Research indicates that five hours is about the maximum that most of us can concentrate hard on something,” says Alex Pang, founder of Silicon Valley consultancy Strategy and Rest.
Some companies have tried to reduce their working time down to 5 or 6 hours a day and saw productivity improvements. And the employees enjoyed the additional free time. A perfect balance. And yes, when we focus on work and remove distractions, we able to find a flow that allows us to get more done in less time. My experience is confirming this; when I am blocking 2 hours for a specific task, I am able to create a lot more results than if I am forced to split that into several 30 minutes slots.
Though, it is not all sunshine with the 5-hour workday idea. The increase in productivity will not lead to additional output overall. The new productivity level will not translate into an 8-hour workday. Some managers might wish so. Companies also observed that the stress levels increased. Employees felt pressured to squeeze everything they have done in eight hours before in their new five hour period. This is not always easy and creates tension.
And, in the long run companies observed that connections between the employees and relationships started to deteriorate. There is no time for a joint coffee or lunch break. That's how I felt in my empty office during the Christmas break: great to get things done; though, now I need to discuss my ideas with my peers and get inspired by them.
This leads to another element that is essential for lasting success in a complex ecosystem: randomness. We need time to ponder and tinker; these watercooler conversations often spark new ideas. Idle time is one key ingredient to creativity. That is how we are solving problems.
One final question: do we need to tell people how long and when they are working? I prefer to give people freedom and autonomy to choose their time for work. Instead, let's focus on the achievements which we aspire in our group:
It is great to know that our productive time is limited to five hours a day. Let's use this fact to reduce the pressure from people. Let them choose their preferred ideal working time. And let's start to focus on what really matters.
How will you use these ideas in your team?
Source: The perfect number of hours to work every day? Five, WIRED, June 2021
About a year ago, I was introduced to the term 'antifragility' - a new word that intends to describe the opposite of being fragile. This term is about going beyond robustness and resilience - we want to thrive in chaos, not only survive.
Nassim Taleb introduced the term antifragility with his book "Antifragile: Things that Gain from Disorder". Today, I want to take a quote from the book and explain some simple principles how we can deal with difficult, complex ecosystems and how we can establish new behaviours that make us successful in a substantial way - no shortcuts.
"Antifragility (thanks to the asymmetry effects of trial and error) supersedes intelligence. But some intelligence is needed."
What does Taleb mean by that? In the book, he introduces the concept of optionality. If we have different options and we choose options that have a small, limited downside plus a big, unlimited upside, then we will over time be more successful. Randomness (as it appears in complex environments) will drive us towards the upside. Eventual losses will be small. Interestingly, identifying and creating these options doesn't take a lot of intelligence - it's more about courage. Where we need intelligence is in choosing the right options. And this is much easier than designing the perfect path (option) with intelligence.
Where do these options come from? I suggest two sources. First, when we do our business and are observing our customers, we will automatically discover possible ways to improve the value for customers. Simple shadowing, conversations and immersion will surface new things we can try. This leads me to point two: experimentation. Exploring small changes how we deliver our value to customers will create observations and will lead to more options. Small steps will lead eventually to more value and more success. The small steps also avoid to fail big and jeopardise our business.
How can we be intelligent in choosing the right options? There we need direction and a yardstick; base again two sources. First is customer value - again; when we do understand what our customers appreciate, what is important to them, then we collect one part of our northstar. The second source to decide on the right options is our shared vision, our purpose. This gives us meaning and a clear measure on what we want to achieve, what upside means to use, and which option will be the right one for us. The purpose also includes the collective experience on how to be successful in the ecosystem we are running our business.
One last element I would like to mention here. In our business world today, we can observe a lot of transactional behaviour; we try to model each process, find causality and theoretical explanations. The randomness mentioned by Taleb also indicates that we should rely less on these transactional, theoretical approaches. When we are connecting with people in a more human-centric way, it will be easier for us to experiment, build our collective dream, interact with customers and better understand the ecosystem we are in.
How do you experience fragility in your work? What works for you to overcome these stressors?
Photo credit: Leiduowen
At Hive17 Consulting we took our experience and evolved a model that identifies key ingredients that make teams successful in an environment that is ever-changing and complex - in short chaotic. We call these the four pillars of the wheel of antifragility: purpose, customer value, experimentation and relationships.
Each of these include important goals that support success. Though these goals can be contradicting; for example, if the team members have a singular focus on pleasing the customers, then the team spirit might be jeopardised. There is no set of actions that simply improve all four goals at the same time. Therefore, it is important to advance the four pillars in a balanced way. For example, focus on creating value for the customers based on strong team bonds.
While the pillars are based on solid research, our model is created through empiric knowledge. And, we continuously benchmark it to other concepts, thoughts and research, to make sure we are on the right track and further evolve our practice. The other day, I was reading this article "So What is Agile Really About?", in my eyes a great summary of the key principles for agility (which are in itself based on continuous innovation). Here are these 7 principles and how I see them supporting antifragility.
Where do you see the key elements of an agile organisation? What have you observed that makes teams successful in an uncertain and complex environment?
Source: So What is Agile Really About?, Barry Overeem, Scrum.org
During my career I conducted many workshops to develop capabilities. And, I also participated in excellent training workshops. Of extremely high quality. And all of them had one thing in common: the change that occurs to our own daily work after the workshops is minimal.
Since a few years, I also had the honour to coach - guiding people to discover themselves and to apply new routines to their work lives. This is the change we want to see in people. Though, coaching is highly intensive and simply not scalable.
Last year, I started to work with a few teams here in Singapore to develop solutions that are closer to what their customers want. We started with design thinking training sessions which - no surprise - resulted in no change in their daily work. Then we started to play around with different interventions - as a team, as individuals. Slowly we can observe that new habits are forming and the mindsets are shifting.
Training versus Coaching? With this short article, I want to suggest to take a hybrid approach and combine both practices. The aim is to develop new leadership capabilities and cultivate new routines that enable teams and individuals to create lasting success. We can join the benefits of both and add other elements to it. Here is what I suggest:
How do you see that we can combine different practices? What are your experiences with this hybrid approach?
While I am partnering with teams to allow them to become stronger, faster and successful in competitive, complex and ever-changing business environments, I often take out the tool of Objectives and Key Results (OKRs). When implemented correctly, they allow teams to get aligned into a common direction, to focus on what needs to be done now, and to create transparency on where we are and where we want to shift resources. When handled carelessly, then the implementation can also lead to frustration and disengagement.
Where as a leader do I need to be careful with when implementing OKRs?
When I am implementing OKRs, I put a lot of focus on defining them with autonomy in the team. There are a number of external elements that give direction to the team, for example the company vision, market developments, customers' needs & insight and so on. Then, it is up to the team how they want to define and formulate the objectives they want to aim at in the long term. And, then identify the key results they want to achieve in the next three months. The team is in the driver seat and is in constant communication with their leaders to create alignment. In my observation, this process has proven to be highly motivating and meaningful to the teams.
We heard many times that goals need to be specific, and yes, for the short-term key results it is important to bring clarity on the work we want to engage in now. At the same time, making the objectives too specific can act as a barrier to exploring alternative ways to reach the north star.
Ambitious targets are a two-sided sword. And recently in my work I see that teams are simply exhausted and demotivated because they don't see how they can possibly achieve their OKRs. I often explain teams that they better travel light on their journey (with a smaller set of key results) and when these are completed, they can look a their backlog and "load" new key results. If their backpack is too heavy, it will slow them down. In this sense, it is good enough to aim at 70-80% achievement of the key results - something that I have read in the original description of OKRs (re:work).
People are inherently ambitious with the right purpose guiding them. Targets don't need to be ambitious.
Tracking and scoring OKRs is also a delicate path. Here the clear intention is creating transparency and input to decide where to allocate resources for the next month. This review step is intended to create breathing space and reflection on where we are on the journey. There needs to be a level of trust between the different parties to make the review process smooth. When no trust exists, this activity will end up in frustrating micromanagement.
Thanks to the Corporate Rebels to inspire this reflection with their article The Dark Side Of OKRs (And Why We Should Care).
What are the pitfalls you have been observing when introducing OKR?
Over the last decade, I could collect many examples where teams and entire organisations tried to accomplish too many things at the same time - with the result that they are advancing very slowly. I observed this in manufacturing environments, corporate functions, product development teams, etc. And I am sure, many of you agree to this. And still, there are so many important topics; how to choose?
Last year, a team approached me to support them to improve their productivity. They organised themselves in a very typical manner: each team member got a topic assigned and worked on it individually. During my observations I discovered two main obstacles. First, the team members felt that they were not in a good position to help each other. Second, the team was not able to accelerate urgent topics fast. That's why we tried a new approach.
How often do you observe similar situations in your organisation?
In this team, we tried to follow the principle: let's minimise the topics we are working on in parallel. We started with selecting one focus topic per cycle - a two weeks period in their case. At the beginning we had a deep dive into the topic to get everyone familiar with the topic. Then, they discussed what are the tasks to bring this topic forward and continued to work together on these activities. With this sequential approach, the team didn't have to select important topics to reduce the number of projects on their plate. There is always the next cycle, where the next important focus topic will be progressed. This gave the team the confidence to spend very little time on the other topics.
During the reflection after the first cycle, the team expressed how they enjoyed to work closer together; this was a great team bonding. In addition, they were able to significantly accelerate the delivery for the focus topic. At the same time, the team struggled with a steep learning curve during the deep dive and shared that they had to find a new balance between working in a group and focus on individual tasks. We agreed that both points will become much easier over the course of the next cycles. Overall, they all agreed the benefits outweigh these drawbacks. The team highly appreciated the switch to a more parallel approach of delivery.
Where do you see areas to implement this way of working?
In my practice, I am often talking about three different topics: change management, operational excellence and innovation. For many people, they are very different concepts and many companies assign these to different departments. What makes them so distinct? Or are they not?
For me, they are strongly supporting each other and tightly interlinked. Let's start with innovation. This topic is about creating and implementing new solutions. Change management is supporting innovation by driving the change (behaviours) that the new solution will bring. And according to some studies, about 80% of the innovation are incremental, operational improvements, while still disruptive.
In the same way, operational excellence is strongly supported by innovation methods in order to discover crazy ideas. And, in my experience, change management practices support to engage the people and motivate them bring better results.
Lastely, for me change management is directed at improving the business. This can only happen by cultivating an innovation mindset and driving operational excellence across the entire organisation.
So, instead of distributing these three topics in different corners of your organisation, bring them together. Some successful companies have one (Transformation or Excellence) team which can be the driver for company-wide innovation which includes operational excellence and has strong change management practices.
How do you bring innovation, change management and operational excellence closer together?
We are excited to provide you with the findings of our follow-up study about how leaders in Asia and Europe are working through the pandemic. If you remember, in July we published the first report: Teams Come First - New Business Models Later. Here comes part two...
The second study has crystallized some key questions for the way forward: How do you provide a sense of stability in an uncertain environment? How can you focus on Employee Motivation and Customer Value? And, how can you keep nurturing solid relationships in your ecosystem?
The results also show that people - and that’s employees as well as customers and business partners - are taking center stage. Still, many people indicate that they lack direction and vision.
Complete report: hive17.com/antifragilityreport2021
Now is a great moment to evolve and develop your teams and your business. How do these questions and topics resonate with you?
Great to read the outcome of an interesting conversation with Rachelle Lee and Michael Zimmel about how innovation and creativity can shape the way finance professionals are looking at their work.
One key pillar for success is understanding how we are creating value for our customers. This starts with exploring who we are creating value for. And then get inspired by their needs and insights. Where are the pain points and how we can we make these groups of people successful.
In the past, finance professionals were routinely creating standard reports piling up lagging financial indicators. In today's ever-changing, complex world this is not creating value. I suggest to look at leading indicators that we can directly influence and have an impact on the success we are aiming for. We can see a huge potential for finance teams to tremendously increase the value they can create for their 'customers'.
Read more in this interview: The Changing Mandate of Finance.
Over the years in sparring with leaders on operational excellence, the question of how to structure the organisation is coming up regularly. And as so often, the unsatisfactory answer pops up: "It depends...". Are we creating a global structure that supports the different teams? Are we focusing on a region and integrate all functions in one structure? Shall we go down the path of a matrix organisation? All options seem to have major drawbacks.
While the answer is not simple, I like to think along a few principles that guide the design of the organisation. All of us are engaged in two categories of work. One is focusing on daily operations and is directly impacting the value creation within the company. The other is more strategic thinking and reflects on the way we operate and improves and innovates the operation. So, how does that impact organisational design? Let's look at some examples.
In one global manufacturing organisation, the environment, health & safety (EHS) team was looking the best way to serve the different organisational units. On the one hand, the company is divided into different business units and regions. On the other hand, the EHS team is organised in different functions like product safety, process safety, etc. Are we creating global, functional teams that are serving the regional operations, e.g. packaging, manufacturing, import facilitation, etc.? As a result, the specific, local nuances are often neglected and the functions within the region are not well aligned. Shall we design the organisation along the regions? Then, a result is that within a function, the global alignment receives less attention.
In a service organisation, a technical delivery department was looking how to organise themselves more effectively. The company is organised according to business units (customer segments) and regions. Plus the delivery team has different subject matters like data warehouse, software platforms, user journeys, etc. Currently, the company is organised according to the subject matters. And, as a result the collaboration between these units is very poor and the speed of delivery is limited. Shall we change the organisation to a business unit and regional structure? How can we ensure alignment within the subject matter units?
Let's go back to the principles above of daily operations and strategic thinking. All of us are engaged in contributing to the value creation within our company as part of our daily work. At the same time, we also reflecting on our way of working and preparing the organisation of the future success. In my eyes, we should focus first on value creation. And the organisational structure should reflect this by creating departments and teams along the value chain. In the EHS team, this means that we are establishing regional, cross-functional teams that focus on the value creation of the customers. And for the service organisation, we establish teams along the business units and regions - incorporating the different subject matters.
Ok, great! And how can we align the different subject matter experts globally? In my experience, formal global communities of practice allows to bring these experts together and share experiences and define new standards - building the platform for future success. This is much better than engaging in complicated matrix organisations with double reporting lines.
In which area do you want to try out this organisational design?
Today, I had the opportunity to share a hybrid approach to transformation in operational excellence together with Pascal Daniel during the OPEX Week Live APAC. What excites me about conferences are the interaction between peers and experts in the same field - even in a virtual format. So, we had an interesting sharing of insights how we can trigger lasting success in the current disruption. Exciting to see that the audience is also focusing on innovation, positivity, adaptation, health, empowerment, etc. A very people-centric view.
The hybrid approach we presented is pushing along these keywords; the approach is based on human-centricity, bottom-up and and an ecosystem & value focus. The method is inspired by design thinking and lean startup and follows four key steps:
Join us in a workshop where we guide you in applying this approach to your own challenges and opportunities. Fill in this form to express your interest: https://forms.gle/9W3MqGuwsvrEY39PA
About a year ago, a factory in Thailand embarked on a journey to redefine how they approach operational excellence. One aspect was to get crazy ideas; we conducted a design thinking workshop that engaged over 70 people in six teams. In this article, I want to focus on the execution of these ideas: Big & Small Thinking.
In a workshop the teams split the crazy ideas into smaller clouds. Each of these smaller clouds represented a potential three months projects; they followed the following principles:
These criteria represented a shift away from the typical 12-18 months projects. The biggest challenges the team were facing were, a) that after each three months we can add value to the business and b) that we don't know what we will be working on after this project is completed. Both elements allow the teams to stay flexible and adjust the big picture journey to new discoveries and to changes in the environment. At the same time, we were able to celebrate much earlier. The engagement was very high.
How do you drive excellence in a complex and ever-changing environment?
Today was Day 2 of the APAC Operational Transformation Summit with a inspiring speakers that look at new aspects of Operational Excellence: culture, sustainability and agility.
Eric Tachibana started of with an deep dive into culture. Culture is important because there is a clear correlation to financial success - btw, strategy doesn't show this correlation. At the same time, it seems to be difficult to grab and manage. Eric introduced a model to make to make culture more tangible: values, rituals, stories and artifacts. Influencing culture starts with the little behaviours we conduct every day in these four areas. He shared that at Amazon there is a strong focus on the leadership principles that provide guidance to the entire organisation and to create new routines across the four elements of culture.
Luanne Sieh introduced another angle to operational excellence and illustrated the impact of human society on our planet in the last 100 years and how it shot through the roof. In today's business, we need to look at the triple bottom line - profit, people, planet - in order to establish a sustainable operation. Investors today are more and more interested to go beyond th short term financial KPIs and push the companies they are investing in to be active in creating a better world for our society and our planet. This essentially will bring new business opportunities and allows companies to distinguish themselves in the market.
Majid Bhatti supports the view that innovation is essential for business success; creating new products, increase motivation, increase productivity, establishing new relationships. Innovation is not only about creating ideas; selecting the right ideas and executing them are essential parts of innovation. Successful innovation is based on collaboration and interaction between people; based on empathy and understanding. In this context, he introduced agile methods which have a strong focus on interacting with peers and customers. Getting early feedback from them is essential to develop solutions iteratively. Agility also suggests that we are creating flat organisations and facilitate the flow of ideas and improvements from all corners of the organisation. Agility is a platform for innovation and improvements in our operational excellence.
For me, it was refreshing to observe a broad perspective on how we can improve our operational excellence and look beyond the usual set of tools. Diving deep into culture, sustainability and agility might create more engagement within the ecosystem; looking at a wider range of criteria can drive improvements in our daily operations.
Today was Day 1 of the APAC Operational Transformation Summit and we had a great lineup of speakers. I could clearly see a red thread going through all the presentations. Operational excellence is based on digital transformation; and the success of digital transformation is enabled by the people.
First we had Michal Golebiewski from Microsoft sharing how digital transformation is a journey and that starts with the definition of a new you; based on a purpose. This purpose is guiding the customers, the partners and the employees on how we are kick-starting this journey. We need a vision & strategy; a northstar. We need to look at the culture and mindsets that will allow experimentation and stimulate a growth mindset. The unique assets and the capabilities of the organisation need to be aligned for this journey. And finally, success is based on employee empowerment and we need to stay engaged with them. These are the ingredients for success.
Abhishek Sharma, Axa, continued the journey and added that the tools and the process are necessary to bring fruits from these ingredients. In order to start your digital transformation journey, you need to investigate your what, who, how and the impact you want to create. He illustrated that you will not reach the peak in the first round. As a leader, you encourage your team members to climb the mountain by themselves - milestone after milestone. At the same time, you are there to hold a guiding hand when necessary. This will build confidence and the climb will become easier. The transformation journey is triggering a cultural shift that involves everyone. This is why it is important to cultivate trust with your employees, your customers and in the entire ecosystem.
During my presentation, I took the concept further and introduced positive leadership that allows you to drive engagement, motivation and therefore operational success. Today's uncertain and complex business environment requires agility in order to create success. This agility is based on empowering people to experiment, guiding them with a collective dream, creating an understanding how to create value for our customers, and lastly on building a collaborative platform to facilitate relationships and trust.
Finally, Kesavan Sivanandam, from AirAsia, shared an inspiring story about perseverance and pushing boundaries. Needless to say, the airline industry is hit very hard and AirAsia took this as an opportunity to push digital in the end-to-end experience. He shared the story how strong collaboration with various agencies and business partners allowed them to achieve a contactless solution from "curb to gate" within a few months time. This was possible based on a common purpose within the ecosystem to keep the business going, in a safe way. And in this journey, it was important to keep the people engaged under this collective dream.
Day 1 of the conference was a lot about creating a common purpose, engaging with the people, and cultivating relationships. Key ingredients for a smooth and sustainable digital transformation journey. I am curious to hear more during Day 2.
"When you bring a problem to me, also come with a solution." This has been a very common manager practice. Since a while, I believe that this statement is flawed. How do you expect your team member will react? Will they be openly and willingly approach you with their struggles? And, how does this contribute to a positive environment which is essential for creativity?
When your team is facing barriers in creating success then the entire team has an interest to overcome this barrier; the team needs transparency in order to excel and grow. As a leader you want to be a sparring partner for your team. Instead of looking at how we ended up with that problem, positive leaders will turn it into an opportunity to learn and improve the way we serve.
When we are facing a challenge, it is important to create a deep understanding of what is the problem and to withhold thoughts about possible solutions until a very late stage. Let's first identify the people we are creating value for; what are these people's needs and pain points; how can we make them excited? How are we delivering value to today and where are the gaps? With a solid understanding of the challenge, we will identify opportunities to reduce friction. Solution ideas will easily emerge.
Next time a team member comes to you with an issue, appreciate that they are sharing it with you and ask: "What did you already try?" and lead the conversation towards a factual analysis of what have encountered so far.
In German we have this expression - "Wer den Pfennig nicht ehrt, ist des Talers nicht wert"; basically saying, only when value you small change, you are worthy of the dollar bills. Did I get this right? In many efficiency improvement projects, companies deploy small focus teams that are working on the large improvements; within a few years they can achieve great improvement results. Why is this not enough? How can these initiatives excite the entire workforce? And do these central projects have a lasting impact?
In Southeast Asia we engaged in an energy efficiency project for about 15 factories. And, we took a different approach: we directly asked the frontline people where they see improvement potential. I clearly remember a few projects we celebrated together with the staff at the factories. One was the idea to change the switches in a large warehouse. Imagine a large warehouse, and whenever you enter it, there is one switch for all the lights. The team experienced this as a waste of energy and suggested multiple switches for the different sections in the warehouse. Does this have a million dollar impact on your business? Even we might consider this as a small improvement, we celebrated it because the behaviours is correct and we wanted to stimulate more of the same.
The next time this team walks past a idle running grinding plant, they will switch it off and will save significant energy costs. Based on over a hundred similar small projects, we were able to reduce the annual energy cost by a three digit million dollar figure. Plus, we created ownership, commitment and engagement from everyone working in our plants. This was an exciting journey.
A case study from Coca Cola in Sweden shows similar results - Improvement opportunities that are hard for managers to see. The study compared the improvement impact of a Six Sigma initiative with an idea system for continuous improvement. The sum of the small ideas in total generated 6 times more savings than the big projects.
A positive leadership engaging all the workforce to participate in the overall vision of the organisation will have significant and lasting effects on your bottom line. How will you implement this in your company?
In general, I am a forward looking person and striving to excite people about the future. Even these times are full of positive experiences and opportunities. And sometimes, it is great to explore the past - historians play an important role in our daily life. This article is looking at studies from previous crises and shares interesting conclusions - What you can learn from history about innovating during a crisis.
The companies that invested in innovation during the crisis displayed 14% more growth in the following decade than the companies that did not. What did these companies do differently? They collaborated with other businesses, explored new market opportunities, leveraged technology in new ways, and were competing on value instead of price.
At the same time, in a crisis companies need to be cautious with spending. The research shows that investing into innovation is not the only driver for success. Companies need to find a balance between investing in innovation and reducing your cost structure. Though, firing staff is not the preferred way to control your costs - this will only backfire in the near future.
Here are cost management strategies that have been proven successful in previous crises:
While these defensive measure are in place, follow your customers and invest where you can create value. Allow your staff to experiment with new ways to interact with customers and learn as much as they can. It is very important to build a solid foundation that pushes you into the pole position when the economy is picking up again.
Where do you find inspiration in this list of measures? How will you start to balance innovation and cost control?
This week, I have been working with a team to improve their operations. They are doing great at developing new products and services, though they felt unsure about how well they are designing for their customers. For this team, we are looking at a network of internal customers in different functions and business unit. How can we manage these stakeholders needs with agility and creativity?
We started with the 4Qs Framework: who we serve, what we serve, how we serve based on the question who we are. The team appreciated the structure in the thinking process and how this helped to identify where they need to direct their focus. For example, the team said, yes, we know who we are serving. Though, do we know them deep enough, do we know their daily work challenges? Based on this simple framework, we identified the gaps and defined the next actions.
As a next steps we took the discovery principles of design thinking and started the people-centric and creative process of defining the key users, their needs and their pain points. This gave the team a much clearer pictures where the opportunities are to generate value for these people; mapping the existing value propositions with the challenges of the stakeholders. This allowed the team to refocus their operations on the key elements that generate value for their customers.
How are you uncovering the real needs of your customers?
Thank you Anthony Coundouris and Fray Gill.
July is the start of a new quarter and many teams are about to define what their goals for the next three months will be. Objectives & Key Results (OKRs) are used in many organisations and I believe they are a great tool to write down and discuss the big picture objectives and the immediate achievements to focus on - strengthening alignment & transparency.
How to make these key results meaningful? Let me share with you an example. In the last two weeks I was supporting a global compliance team that is split in five smaller groups. In the last quarter they were struggling because they felt the OKRs were not relevant to what their work was actually about. What did we do differently?
First, we expanded the objectives beyond the core deliverables: timely implementation of regulatory requirements. A few posts ago, I shared an article why a single focus on performance might impede performance. The idea is that a solid environment is further improving the outcome of your teams. This environment is based on creating positive experiences and enabling continuous learning. Our compliance team added two objectives. One is related to adding value to stakeholders; the teams are encourage to establish frequent meetings with the different stakeholder groups and implement a structure way to showcase their projects and to understand where they can deliver more value. The second new objective is about strengthening knowledge sharing and collaboration within the global team. The key results for this are aiming at improving social connections between the smaller groups and establish knowledge sharing habits. The felt that these objectives are more meaningful and will support the core deliverables.
Second, we included a round to collect key results from the smaller groups. In this organisation it was typical that OKRs were defined by the team leaders and then communicated to the rest of the organisation. Sounds familiar? The experience of the previous quarter was that the team members didn't think the key results were relevant for them; they also felt that each group has totally different focus topics. Instead, after defining the objectives, the leaders went back to their small groups and defined key results for their group. These were then aggregated and clustered which made the key results relevant for all team members. As a result it was obvious that the different groups have an overlap of topics and this created stronger bonds across the global team.
Overall, the entire team is positive and confident with the key results for the upcoming quarter and are highly motivated to focus on bringing value to their stakeholders and to themselves. A great start for success.
Photo credit: keadventure.com
The first half of 2020 is over - and wow, this was a rollercoaster, right? As a leader, what did you learn? Which new routines did you start? And what is on your list that requires immediate attention?
We have asked manager in Asia and Europe about their top priorities right now. Our findings have been positive and alarming at the same time.
Positive is that leaders care about their people and employees are confident that they are supported. There is a human touch in the leadership in Asia which might be based in the more collectivistic cultures in the region.
On the alarming side, we conclude that companies make limited efforts and plans for a new future and set up their business for success. Are companies putting themselves into hibernation and expecting to wake up and continue in the same way? This might not happen and operations, business models and ways of working require a creative remodeling.
Read here the detailed study: Teams Come First - New Business Models Later
Thank you, Björn Kälin and Emmanuel Montet, for your collaboration and support.
Photo credit: University of Maine
In the current situation, many companies are stumbling and stuck in the place they currently are - or worse, where they have been in 2019. At the start of the lockdowns, leaders tried to connect with their teams and engaged on a social level. Then, the urge of survival kicked in; many companies started cost cutting exercises. Is this sufficient to shine and thrive at the end of this crisis?
On my side, I am convinced that in order to create lasting success, companies need to focus on value creation. We need creativity to address totally new needs and we need velocity to deliver value at the time it matters most.
In this context it is great to see that major consulting companies are confirming this point of view. McKinsey pushes in a similar direction: Ready, set, go: Reinventing the organization for speed in the post-COVID-19 era.
In the article, they reinforce the notion that we need to re-invent our organisations. Do we expect that 2021 will be the same as 2019 has been? Consumer behaviours are changing, employee preferences have shifted, communication technologies are maturing fast. Here an interesting example: recently, a global alumni organisation was forced to conduct their annual general meeting (AGM) virtually. The organisers shared with me that this format allowed more relevant members to participate and the outcome served the global community better. This was never possible with a physical event. Will they continue with a virtual AGM? Probably yes. Transformations around us are happening fast; and we as individuals and as business leaders need to adapt as well.
McKinsey mentions 9 triggers for speed in your organisation. Autonomous, cross-functional teams with more freedom to make their own decisions, with reduced hierarchy & bureaucracy, and with a clear result focus will execute lasting success. Further, successful organisations are embedding themselves in a collaborative network of partners, customers and suppliers. This means, building a platform that facilitates hybrid work and continuous development of the people is essential to remove barriers. And, what is the role of today's leaders? Enabling, inspiring and empowering these strategic teams. Step back and see success flourish.
How do you create lasting velocity?
Today is June 2020. Are you looking at the 18-months plan you have created in January 2019? Most probably, nothing on it would make sense in today's world. They have reflected a very different reality. And the complexity and uncertainty we are acting in, makes planning difficult.
What is the alternative? In my work to improve operational excellence, I am guiding teams to create specific and clear key results that will be achieved in the upcoming 3 months. This is a time horizon we can foresee with more certainty. And how do we make sure the teams are going in the right direction? This is where we need a northstar, a collective dream, that gives us a guidance for direction and priorities.
No plan at all? This feels very uncomfortable... Sure, we need something that is bridging the northstar and the key results; these are the objectives. They give us the context for the key results. And, in order to provide clear guidance, I suggest teams to imagine how the end results might look like and how the path can look like. This imagination of the results and the path is providing excitement and clarity.
If we don't have a plan, how do we measure success? In the past, project teams celebrated that they finished their project on time and on budget - and delivered outdated requirements? Instead, I suggest teams to measure success based on these three dimensions: a) value to customers, b) discipline of routines that create an excellent working environment, c) the pace the team members are learning.
How would you think this vision-to-action approach will contribute to accelerated success?
Tim is a change practitioner in the area of innovation and excellence. He is working with teams to accelerate innovation, collaboration and agility.