Tuesday, June 5, 2012

Transforming Industry - Performance Management and Innovation


Transforming industry  (DRAFT)

We talk a lot about the economy recently with the path to recovery some the key issues that we've talked about that have gotten a lot of press of the issues of job creation, driving high-performance, and getting business back on track. As I think about these points of discussion my concern arises that we were looking at is trying to focus on the symptoms with the indicators and cure the indicators, rather than solve the bigger issue when I look at the underlying factors that contribute to this State, I see a very different picture. The US is a country whose economy is built on it infrastructure and set of organizations that have grown and evolved, as they've done so, they have matured. One of the interesting perspectives on maturity is that it incorporates and adapts the organization, (always a look at the foundation of the analogy I'm using, the organism) to the environment that it has grown up in. Maturing involves taking the learnings and experiences that led to your survival and success and incorporating them into the fiber, the processes, policies, and practices of the business. In a sense, maturity involves embedding the learnings of success into the fiber of the organization. With no change in environment the organizations that mature become more successful, larger, and dominant in their industry.

If we look at these which are businesses with it we see that that maturity is embedded in the structure, their formality of operations and in their infrastructure. The structure tends to be more hierarchical, or if not hierarchical at least well defined and relatively rigid. Procedures, practices and processes tend to be well documented, and distributed and understood throughout the the organization. They formally operational and social foundation which enable work to be done efficiently. They are enforced both implicitly and explicitly on all employees and organizational units. The organizational infrastructure, including technology inculcates these implicit and explicit rules supporting behavior that is aligned with the lessons that have been achieved through the maturing of the organization and, in counterpoint, making more difficult those behaviors which do not follow the behaviors the organization has incorporated from its past successes. In some sense, one could almost say that the organization has taken on a life of its own, and the preservation of the organization becomes more important than actually "doing the business" or serving the customers and markets. An indicator of the state is the coining of the phrase "these companies are too big to fail".

But the environment changes, and sometimes dramatically. When there is a shift in the tectonic plates of the business world, extreme adaptation, transformation, and innovation are required. In this new environment organizations find themselves required to serve stakeholders in ways that their past growth and path to maturity has not prepared them. The future is seen as having to come from new companies. Society jumps on bandwagons as point solutions appear. Often those solutions are solving social and cultural hotspots, rather than addressing the broader issue of building an economy that will support new environment.

So what can organizations do? I have three answers: be your own competition, do what you couldn't do, and create the energy of a startup. Each of these solutions require that the organization take a step back and look at its mission, refine (or develop a new) strategy, align the organization's resources and capabilities to the strategy, and aggressively execute that strategy.

Be your own competition. Identify the sweet spot of your business: the most valuable areas of your business, your stakeholders, or your markets. Clarify why they are valuable to you, and why you are valuable to them. Focus on your sweet spot and serve it like no other, i.e. as if you are trying to steal it from the incumbent organization. Conducting grow this "sweet business" like someone else would do it. Take advantage of and cannibalize any existing organizational capabilities and resources from the current organization as you carry this out.

Do what you couldn't do. Break the rules, practices and policies that govern organizational behavior if they inhibit the ability to do what's right for the market and the customer. Question everything. Often procedures are put in place to respond to environmental requirements that no longer exist. Experiment by pushing behaviors beyond the limits that were normally appropriate. And this includes both upper and lower limits while perfection is a lofty goal, often 80% solution adequately meets the requirement. And innovate if the current organizations practices don't get you there. Innovation is key to creating the transformation of an organization that has matured in a different environment. Innovation can be achieved through many paths, internal, external (e.g. acquisition or investment), or through partnerships.

Create the energy of a startup. Just do it. Created an environment of openness where differing opinions, challenges, and open questioning is supported and reinforced. Listen to both the supporters and the dissidents to distill the common thread of opportunity and then act on it. Be it organization we work it what you enjoy and you enjoy the work you do. Measure and calibrate successes and failures, grab the lessons from them and execute on those lessons aggressively. Share successes collectively rather than individually, and celebrate the successes.

That's it.
Mitchell Weisberg

June 3, 2012





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