How can you stop short term choices from crippling long-term value?


cancer-curable-not-corruption

As more bad news about Wells Fargo’s practices emerge,  the stain transcends CEO Stumpf’s  reputation. Warren Buffett opted to wait and comment knowing that he himself needs time to sort through his own internal review process.

It’s not just Stumpf who needs to believe that the “cancer “found in the retail bank was its source. The Gr8 prorgram setting very high bars for growth with 8 interconnected accounts per customer delivered results but discovery of the ill effects  proceeded much slower.  It took years and then the decision to remove the malignancy—firing of low level employees and managers—what made management believe this toxic behavior didn’t spread?

Well that’s naïve, if not ridiculous, isn’t it? Elizabeth Warren made clear that an organization must remain accountable to its customers more than its shareholders, no matter how large or successful it becomes. Somewhere along the line Wells Fargo, Samsung, Chipotle, VW, and GM all made similar high profile mistakes.

Speed to market may appear an appropriate competitive response but not if short-cutting quality results in shortchanging business value.

Bottom line the antenna in a business can’t be only tuned in for reward especially since it often means the business misses the risk signals. The obsession for rapid growth isn’t just blinding good judgment shows in ignorance of the environment and its complexity.

Interconnected digital networks absolutely create a speed advantage. But speed needs to be managed, and adjustments made to acknowledge the additional risk it creates. Ask the NASCAR drivers what precautions they take that are absent in other environments, or the Samsung engineers who knew they hadn’t done enough testing to properly advise the risk management team with information that prepared them for the inevitable fire.

Pull not push

The Internet made it easier than ever for consumers to find anything, anywhere, and at anytime. Businesses and sales people need to adjust and adapt to accommodate these more informed buyers. At the same time management goals or quotas must recognize changes in the environment, but looking more broadly at the inevitable interactions and the change in likelihood that they will occur.

It may be a cliché, but it isn’t true that what got you here will get you farther. What worked in the past works differently today and will work in another way in the future. The trick is to find the part that is essential and remains critical. Water does seep to the lowest level, but technology advances have created stronger more resilient and resistant containment mechanisms that alter the impact.  Don’t wait to understand them until it’s too late.

Start by answering these questions to the satisfaction of your leadership team and board.

  • How does your management team leveraging or limiting the new levers of change?
  • How does social media, sensor networks, big data and cloud computing alter the behavior of your customers?
  • What risks to your bottom line do they introduce?
  • What steps have you taken to mitigate and or adjust your targets to assimilate them?

Changes we notice and changes we choose 


I suspect you are a mobile addict. You don’t have to be obsessed and have the device in arms reach at every moment to qualify. You merely have to rely on its always connected capabilities to keep you “plugged” in to your connections, and by default the world. 

The speed at which mobile technologies have been adopted has been unprecedented, and I am less interested in its occurrence, and more interested in unraveling its meaning and understanding what changes will unfold next. This post invites you to consciously evaluate the range of activities that tether you to this device, and the choices you can make next.

An overwhelming number of people check their device for “messages” within their first waking moments. In the not-too-distant past, messages waited to be picked up in the variety of places where they were left.

A missed caller could leave messages on answering systems, that replaced secretaries who made and pass a note. This task was automated by machines who accurately recorded the caller, and refrained from edits or shorthands. The machines soon became embedded into answering systems with retrieval now possible remotely.  You could call in to learn who had called.

Email, a desktop computer application, was faster than the post office, and quickly displaced the fax machines for sharing documents or lengthier detailed messages.  Cheaper computing, networks expanded Email from an office communications system to personal. Not only was it faster than regular mail, it was significantly cheaper than calling and more convenient. 

Now, all messaging systems are neatly available in your single mobile device, and your messaging interests and practices routine, if not obsessive.

How does this capability to be more on top of your communications make you feel?

Does this combination of access make you feel more effective, responsible, efficient  or something else? Are the experiences and emotions associated with interaction or the anticipation of the interaction? when and why does the experience become distracting or chaotic? 

Workflow

I’m asking this questions, because I have a hypothesis that needs testing. I believe it’s the small stuff we change that leads us astray from our original purpose or focused intent.

Distractions come in many forms and largely occur when our attention wanders. Driving for example, our focus should be on the road, the vehicles and conditions. Instead , we’re typically multitasking while driving, Whether the division of our attention happens by listening to the radio, engaging in conversation with a passenger, or on the phone ,  or just the flow of other thoughts.

Diversion is candy to the brain. It’s how small stuff easily adds up. The sideways glance that misses what’s ahead robs our attention,  scatters our focus, can delay our progress and mar our effectiveness.

Any efficiency we built in to our process are quickly filled by the abundance of new opportunities, the change in process enables.

Here’s the rub, it’s at the moment of learned efficiency that we choose either to keep learning or we move on to a new domain.  In both cases, we have reached a level of effectiveness and masters keep moving up while the rest of us begin a steady ascent of decline.  This has been documented as the learning curve aka the efficiency curve, and it’s that pivot moment that interest me.

My hypothesis is that it’s in those moments of awareness of the pivot point that innovation begins.

Process changes: Innovation, Invention or Improvisation

I invite you to consider the value of anticipation, or the expected emotions that flow in a particular situation. For example, we want a celebration event to end on a happy note.  Likewise we want our decisions to also produce positive outcomes, but that’s the problem, not all of our behaviors result from conscious decisions.  When driven by habit, the small stuff that changes escapes our notice. That’s both good and bad.

For example,  no matter where you live on the planet, the time of sunrise and sunset changes daily and we generally don’t notice or feel those effects. We do experience the differences relatively over long periods of time, such as the longer days of one season vs. shorter days in another.

The same is true over the little changes we make every day in the use of our mobile device. Perhaps you have grown aware that you are using it differently than you did a year ago, but you don’t know exactly why or what you are doing differently.  Of course some of the changes have been controlled by the businesses who are using agile methodologies to constantly release improvements in the look, speed and functions available on the screen.  The more these businesses issue changes, so does your behavior.

So, have you taken the time to reflect and assess your own set of personal habits and processes?  Have you considered the cumulative effect on your employees of these external changes and its effect on their productivity, their effectiveness and your overall efficiency?

I did, and reflect on my processes pretty regularly. It’s the bane of being a consultant, I need to understand and tinker with things in order to keep up to date and provide relevant information to solve client’s business problems.

I always asked lots of questions, the biggest difference in my process happens to be the research process.  In the past, I was a very avid reader of the New York Times and dutifully ventured to my front door half asleep to pick up the paper and begin scanning the headlines.  Later I went to the Wall Street Journal and slowly opted to skip the chore of recycling the old newsprint, and read the headlines on my phone through the convenience of their respective apps, or use my desktop.  The thing is, the biggest change? Neither one of these newspapers remains my #one information source or morning view.  In fact, I stopped reading the New York Times entirely for a while, because as email habits led me to click open the inbox, other publications had more interesting headlines and their content became a more interesting set of sources.

Better still, the minute I opt to share an article with a colleague, I’m no longer in email but a new application that the team chose to use less to keep our inbox clear, but to insure we were finding and able to keep and organize the messages.  Naturally some of our remote global team members would notice I was online and would shout out to me via Google Chat.  Those who were using the proprietary platform we built, would post and the site would automatically trigger an email notification to encourage other members to respond.

I discovered that my own process, work habits and overall effectiveness ebbs and flows with the connected capabilities of the underlying platforms I find myself using.  I’m not suggesting that having one is a good idea, but I also know that it’s valuable to impose some discipline and standards for the teams in which I work.  It’s way too easy to be online, for example this post began as a voice transcription using my phone.  The longer it got, the sooner I had to move to a bigger screen and so I jumped to my desktop to continue.  Inevitably, there was a sync delay. Later, I  had to reconcile the two versions on the two separate devices.

I would welcome thoughts on if and when you personally, or your team revisits your work processes and to what extent efficiency or effectiveness plays a role.  Please share, and if you would be willing to be part of larger research drop me a line.

 

Are you looking for a recipe or a map?


Problems are like Puzzles, both I think are well named, because there’s no implied process.  No approach that everyone instinctively finds or consistently produces a quick result.

Most common approach to problem solving suggests that it gets broken into smaller pieces.  Why? Does a pattern emerge? Or, can you determine a relationship between the different pieces once separated? It sounds like a puzzle, doesn’t it?

A jigsaw puzzle, it turns out defies this process.  At an early stage of our process, after just a few attempts, we recognize that finding the edges first makes assembly of the puzzle easier.

rubrics cubeRubrics cube, or its predecessor the four cubed puzzle–Instant Insanity, and its multi-dimensions add degrees of difficulty. The individual variation in the blocks make the solution difficult. Conceptually the puzzle’s solution includes deciding on the pattern to produce, and then setting the sequence in the cube face to match.

Crossword puzzles, one of those things that people take great pride in their ability to be fast at completing.  This type of puzzle is multi-layered patterns.  One its’ the pattern of answer to match the clue, and there’s an insider advantage from practicing, the other is the words that fit the number of empty boxes, or has a particular letter in a particular place that allows it to leverage words it crosses.

Now look at a map.  It has edges that easily extend, if it’s a mobile dynamically linked map or not, or you know connects to a larger representation that’s known.  In other words, maps help you see a larger reality in a glance. It expands your view of a landscape or a system.  Maps and blueprints both lay out another perspective.  We apply many rules to create and understand the representation. For example, scale, the ratio of an object’s drawn size to the object’s size in reality helps us visualize the inter-relationships of objects from a different perspective. One inch can represent a mile, or a thousand meters.

Creating maps are more of a puzzle than reading them.  The same is true about a recipe. If you know what you want to make, then a recipe provides the list of necessary ingredients and the instructions for assembly.  It too incorporates a scale, so much of each ingredient when combined will create x number of servings.  Most recipes scale easily you can increase the number of servings by apply the same factor to each ingredient.  A recipe that serves 2, doubled now serves 4.  Retaining the proportions of scale allows us to zoom in or zoom out to see more or less mapped details.

Process, the method or approach that literally advances our thinking our understanding or activity turns out to be a bit of a puzzle.  It’s exactly why framing a problem matters.  As I learned last week, when asked to assemble into an 8×8 array 64 small tiles with white and black geometric patterns. There was one rule. Each edge of the tile must match the colors on its adjacent edge face. This was not a solitary task. My team effort comprised people who sat nearby but were strangers. We had 30 minutes. In addition, we were to estimate our progress at 15 minutes, and use the same estimation method at 30 if we were unable to complete the task.

The objective was clear as day. Our team of six suggested that the task sufficiently resourced to tackle 64 pieces. The thirty minute timetable sounded reasonable.

That was until we realized we had no methodology, no way to organize the six people and their skills, perspectives or background. We also lacked the means to identify what this particular challenge needed, and therefore we had no experience to assess the amount of time needed to complete the task.

Brave and trusting souls that we were, we didn’t waste any time before everyone began to move pieces in front of them. Each of us set out to understand the task by doing.  Quickly, suggestions began to spoken aloud. “We could assemble a small section, and then attempt to put the sections together.” Quickly, the group determined that approach too challenging. Instead, we opted to lay out one edge and build out the array.  Well we didn’t finish in the 30 minutes.

Did we fail? Not really, because each of us learned something new about process. More accurately, we paid attention to one aspect of process–one that generally we overlook, but proves essential to the solution. When breaking bigger challenges into smaller pieces, we don’t pay much attention to how those pieces once connected. These interfaces, or places and mechanisms that connect the pieces turn out to be essential to building on ideas, a recipe, a structure, a machine or even a city.

“How” different or even the same things fit together isn’t straightforward. It definitely helps to have an objective. Highly specified objectives make the solution easier to recognize and more difficult to achieve. Loosely specified, sparsely details objectives generate a greater number of solutions and may create a new problem, selection.

There’s an art to balancing the specificity of an objective and the skills and possibilities available. Each of us leans on our past experience and know-how to face new tasks and tackle new problems. For a new or unfamiliar task, we may find comfort in narrow specifications, easily achieved and successful solutions recognizable. Its part of why we often try what we know before trying something new.

Thankfully, we also get bored with too much repetition. We enjoy variety but also willingly engage in many routine tasks to save ourselves time and energy. Accepting the trade-off of early or later specification changes the difficulty of the task and our ability to solve it efficiently and effectively. It’s what differentiates innovation from improvement, learning from reacting and leading from managing.

Try it with different materials with your own team and discover more about your own internal how thinking and motivations. I encourage using play things—spaghetti and marshmallows with the instruction to build a tower, or small groupings of identical pieces like Lego that you invite everyone to build their own tower. Assign the open, but limited time task. Give people an opportunity to share what they did and engage a wider conversation about process dos and don’ts. It’s not just a great team building activity, it’s also great leadership and management development exercise. I’d love to hear back what you did and what happened as a result.

Continuous transformation or a transitional approach, which path do you prefer?


Janet Yellen Testifies House Fniancial Services Committee

Earlier this week, Janet Yellen told the House Financial Services Committee that no decision has been made, but shared the Federal Reserve Bank‘s expectations via the Wall Street Journal.   “The economy will continue to grow at a pace that is sufficient to generate further improvements in the labor market and to return inflation to our 2% target over the medium term, and if the incoming information supports that expectation, then…December would be a live possibility. ”

Wow, lot’s of room in those statements.  Both US Stocks and bonds slipped following her remarks. It’s become commonplace to link Fed Chairpersons’ remarks to the rise and fall of the markets.  I’m not so willing.

Maybe because my thoughts of late were influenced by a conversation hosted by the Becker Friedman Institute I attended last week.  Entitled The Role and Impact of Monetary Policy in an Uncertain Economy  and included Charles Plosser of the Philadelphia Federal Reserve  and nobel laureate Lars Peter Hansen.

First, I’m with Plosser in sensing that it’s foolish to expect that  the Federal Reserve’s control of the money supply and interest rates can be used to effect both inflation and domestic employment.   Second, we need to be cognizant, as Hansen advises, that models can be very helpful but are not exactly the same as direct relationships.  Politico made a similar point. “The Fed and its staff, like any good economists, rely on past patterns as a guide to future outcomes. And now, those patterns are no longer working…:

In fact, it’s the latter thought the differentiation between modeled certainty and certainty deserves more attention.  I’ve been unpacking and exploring this in a variety of ways .  Here’s one:

I know with certainty the relationship between the gas pedal and the degree of pressure applied by my foot and the acceleration of my car.  Janet Yellen and the Fed no matter how experienced and accurate the input data, the econometric models relationship to the economy remain uncertain.  It’s why changes in pressure they apply to expand or contract interest rates have a fuzzier relationship to the economy, and the measurable results more complicated and less consistently understood when compared to my car’s observed speed when I hit the or lighten up on the gas.

Modeled certainty when it fails produces uncertainty but doesn’t mean stop, or does it?

I only watch the dashboard in my car.  I used to have a ticker list of stocks I followed, but no more.  I also rely on the weather app on my phone even though it’s not very accurate. Why? Well it’s useful to be prepared for forecasted conditions, even though several are beyond my control. Yes the weather is uncertain inspite of models who do their best to assure us.

I’m not alone in my struggle to understand and interpret the signals around us, especially the indicators of the health of the American economy and the global economy.  For one, its more complicated than the working of my car, which I also don’t fully understand. The dashboard guides me, it reminds me that the gas tank needs refilling or that in a particular area I may need to reduce my speed, or if the other lights go on I should get a mechanic to take a look.

Today the growing interconnections between sensors, and communications technology make makes it possible to funnel more information to me in real time than ever before.  So, what value do additional indicator really offer? What does knowing more change? The answer is it changes everything, but not necessarily in a predictable way.

Experience, does affect how we process information. Our brain uses experience to filter out commonplace or the “usual” details in our midst. Organizationally, experience used to model and plan the allocation of resources and assure us with forecasts based on different decisions.  The bigger the organization, the more careful and challenging the coordination and planning activities.

When I was a kid, I heard the expression “As goes General Motors, so goes the country.” I didn’t know the first thing about economic indicators, or inflation rates.  My family bought GM cars, so when my grandpa bought a new Buick, things were going well. Conversely, things were going less well when my father continued to drive his Pontiac long after a small hole in the floor board  appeared spurting water when we’d hit a puddle.

GM of course was until recently not just one of the world’s automakers, it’s activities were deeply embedded into the economy.  A report by US Auto Alliance , quantified the importance of the automotive industry in the U.S. economy  claiming:

  • more than seven million private sector jobs and $500 billion in compensation,
  • drew foreign direct investment (FDI) currently valued at $74 billion—approximately 3 percent of all FDI in the United States.
  • And collective investments of almost $46 billion that expanded and retooled U.S.‐based facilities since 2010.

It take a reasonably long time to build a car, but people don’t buy them very often, so supply can generally keep up with demand. If we use GM as a litmus test for the economy there’s some wise and prudent parallels becasue there’s a lot of interdependencies between larger sentiments and people’s financial capabilities.  In contrast, fast food offers a set of alternative indicators to measure the pulse of the economy. In May of 2015, US news speculated about the inverse relationship between the two in an article entitled “McDonald’s earnings slide could be a function of economics. Besides, McDonald’s is the 2nd  largest employer in the country, trailing WalMart. Not surprising given its 14,300 restaurants –4.6 outlets per county.  (I plan to explore this idea more fully in a post I’ve drafted called  McDonald’s a truly American Story).McDonald's Workforce, 2005-2014

See http://fortune.com/2015/06/13/fortune-500-most-employees/

I only point to these two companies becasue I think it’s important to notice the difference between government actions and companies responses to changes in external conditions.

BCG put it this way:

“To compound matters, the diversity of the business environments—in terms of growth, rate of change, and harshness—that global companies face is expanding in a multispeed world. So it is not surprising that many companies find their strategies and business models increasingly out of step with their environments.

Many companies get caught in a “boiling-frog trap,” where they fail to recognize the problem and delay efforts to remedy it, thus necessitating a painful and risky step-change transformation.”

Is that what you want the Federal Reserve Governors to do?  I hope not.  It’s why I don’t envy them nor am I ready to second guess them.  In reality no one should let uncertainty about monetary policy and interest rate hikes hold up your planning, I would encourage you to take a harder look at the relationship between the micro as well as the macro trends in your industry. You don’t need a data scientist per se to create an elaborate model, but it can’t hurt.  The trick is to merely face the realities.    Try to imagine how your customers adjust and see if these factors are included in your own models, you might fill in a few more gaps..a sustainable path is up to you.

Are you wired for growth?


https://i1.wp.com/cgamagazine.ca/wp-content/uploads/iStock_000020240421XLa_opt1-572x210.jpegI wanted to call this post, switched on  growth, but that didn’t fully capture the emerging idea in my head.

Upon waking I found myself wondering about two very different idea. What makes flowers in chicago bloom in November and why the internet never seem to run out of capacity? Since its not uncommon for my ideas to make sense to me but sound to others as if I’m hovering in the clouds at 30,000 feet, allow me to explain.

We distinguish two types of changes –transitional and transformational. I doubt caterpillars or tadpoles in their initial state can do anything that prepares them for their existence post their transformation into butterfilies and frogs? People in the course of their development do.  We have an uncanny ability to remember past experiences and in many cases it forms our thinking about the future. In other words, if we set our minds to it we can imagine our future in ways that I suspect is impossible for tadpoles and caterpillars.

Seeds don’t imagine flowering, instead they are merely wired for growth.  Something switches on when they find themselves in the right environment and as long as the conditions persist to sustain that signal they keep on growing.

Research into human development when combined with the neuroscientists understanding of our brain’s  growth reveals that humans bear a similarity to seeds.  From the conception moment, as long as the environmental conditions prove favorable, we manage to grow inside the womb, and then we do go through our own transformation as we emerge into the wider world at our birth.  Our sensititity and early instincts begin to form long before we experience our first breath of fresh air.

The different parts that we call the human brain just as the different body parts that comprise our stature do have limits. The internal instructions of DNA and RNA have some latitutde which is why environmental conditions do have an impact.  But it’s the same underlying code that turns some seeds eggs into tadpoles and some into humans.

The biggest advantage humans have over all other creatures and life forms seems to be their ability to alter their environment.  In other words, we can modify and then optimize the conditions in which we can thrive. Social tools like communicaions and today’s more advanced incarnations  realized through a combination of hardware and software offer amazing opportunities.

The motivation to transform our surroundings not unique to humans, as evident in nesting behaviors. Birds have been observed building rather elaborate nests, as do other creatures establishing protective and cozy environments that protect their young. Likewise learning or mimicry has been observed in the animal kingdom, and even to some degree plants who move with the sun.

The more distinctive qualities of humanity, such as fashioning materials with our hands has evolved to a much greater degree than in other animals. Unlike other animals, our internal wiring as refashioned and transformed our brain to be capable of a variety of higher functions one of which is manifest by this post.  The abilit to formulate ideas, conceive of connections without seeing them and then describing them in a manner thtat others can understand now or at some point in the future?  That’s pretty different from the tricks my favorite dog and plants can manage.

Ok, enough background.

Transitions the ability to adjust and assimilate new information depends on prior experience.  I’ve never met anyone who can remember their life in the womb, but again researchers studying human development know among all of our senses, vision is the last to develop.  In fact it takes babies months before their eyes  can hold focus while shifting their line of sight between objects near and far.  I mention sight becasue it’s an easy transition to understand.  Who hasn’t crossed a threshold and found themselves momentarily blind by the extreme difference in light levels.  It takes a few moments before your eyes acclimate, doesn’t it?

Transformations, as we described above are a wholly different experience.  Imagine walking only to find the next step plunges you into a deep hole filled with water?  your body responds in even less time than your eyes take to adjust.  If however you were on the edge of the water and had maken a conscious choice to go for a swim, your body knows exactly what to do. Again no transition or acclimation to the needed unless of course you want to open your eyes underwater.

Differentiating between conditions that require transitions and permit instant transformation is what I beleive separates an agile and flexible organization ever ready to grow.  Both benefit from planning but their response time to change varies dramatically.  If your organization desires to remain competitive learning and building the right capabilities and capacities matter.

I believe that like the human brain, an organization needs a flexible responsive platform to coordinate and integrate the exchange of signals. Why a platform? Simple answer is humans are only good at keeping in mind about two or three thoughts at once, the platform like the really capable personal assistant can track and pop up the right messages at the right time.

No, I don’t mean Siri.  Why?  becasue Siri may be able to talk to my calendar and figure out much of my personal peculiar turns of phrase and short hand names for things I need and use regularly.  Siri doesn’t yet fully take advantage of signals other than location, or the fixed notations.  Siri may help me, but  I haven’t seen the enterprise version, have you? When you do, let me know I’ve got several assignments for her.  I’m betting you do too.

Pushing 60, McDonalds needs more reinvention than its latest face lift


Successful change initiatives often result from a deeper understanding of the problem than the questions that initially emerge when something that should work doesn’t.

For example, Does McDonald’s need an activist investor? This question posed by Parke Shall  today suggests McDonald’s may be in need of a more in-depth analysis. One that   looks beyond the basic data level and requires capabilities and alternative perspectives than those currently at the helm . This deeper thinking would take stock, examine the array of assets tangible and intangible as well as the various factors or flows in order to depict the present working dynamics that produce the present situation. For example, the following conceptual view by Donnella Meadows  and her corresponding outline of effective leverage points offers one such perspective.

State of the System

From Meadow’s perspective, data happens to be one of the least effective leverage points and big data is no exception.  After all data alone merely describes what is, was,  or what may result when applying particular assumptions.

Parke Shall isn’t the only one wondering what McDonald’s can do to appease its investors after a year of declining sales. The complexity of managing and formulating strategy have proven difficult for the chain whose market capitalization and earnings exceed those of several small nations.  It’s precisely why internal decision-making and long standing alliances may require more leverage points and even the most effective in changing outcomes a complete paradigm shift.

I’m Not Lovin' Itif it were up to a few active social media savvy shareholder and mommy bloggers, the changes begin with focusing less on appealing to children’ts natural weaknesses and interests.  When the executives got caught up denying that Ronald McDonald’s visits schools only to recall seeing him present, she had to ask a question that resonates with analysts and shareholders alike:

Are the executives at McDonald’s completely out of touch with reality?

It’s just one of a series of signs that suggest the leadership team and operating  executives appear trapped.  Their understanding and sense of how to make necessary changes that may put  their business on a more positive, sustainable path seems to be stuck in time and experience that no longer resembles the present or the future.

The signs

Millenial challenges reported by the Wall Street Journal in August 2014 tops the list of signs that McDonald’s seems to have lost its relevancy with a key demographic.  Ad Age reported that among Millenials McDonald’s didn’t even make it into the top 10 list of restaurants, though overall they remain the #1 fast food chain. For millenials eating patterns wsj 2014McDonald’s there’s significant impact not only across their 35,000-plus global locations, but its flat or falling sales of the past year for restaurants open at least 13 months, this hurts the US hardest where 40% of its locations exist.

Current CEO Don Thompson replaced the head of the US division effective October 15 with Mike Andres who in turn made additional changes in  the structure and leadership across the US.  The hiring announcement included appointing a new CMO and adding its first customer experience officer who quickly began to  usher new changes for the brand.  Beginning with Leo Burnett assuming their advertising responsibilities and refreshing a popular campaign.  Will these changes and renewed focus prove  significant  enough?  Today’s “lovin it” campaign launch hopes to earn back customers  and promote more positivity. 

Another traditional leverage point , McDonald’s long term relationships with key suppliers enabled mutual growth with product consistency and exclusivity.  Coca Cola, for example, has been a critical partner since 1955.  New York Times reported Coke’s contributions to a variety of successful promotions and innovations  McDonald’s introduced over the years, the smoothie being the latest example.   To what extent will suppliers participate in the extensive reinvention process? Given that Coca Cola has seemed to hit a sugar speed bump itself , this approach may be less advantageous.

This bring us to innovation at the menu level brings.  Widely acknowledged to prove challenging, the menu creep  throws off the rhythm of prep and compromises serve time, a key management metric and contributor to McDonald’s overall value proposition.  Expanding offerings such as  McCafe and McWraps, along with efforts to rebrand and position itself as more upscale may appease some consumers, but not clear these additions delivered sufficiently to slow if not deflect the falling sales.

Is McDonald’s too entrenched in the trappings of it’s 59-year old brand strategy?

The amount of  data  and analysts working on this task doesn’t identify a source or clear evidence of higher level strategic thinking.  A 2012  Booz & Company case study of Wendy’s strategy noted McDonald’s had sewn up three key competitive advantages. Brand name recognition for the golden Arches holds an enviable 88% visibility internationally, which helps it win over price-sensitive consumers who also focus primarily on convenience.

Its US location density  places a McDonalds franchise at the very least within 100 miles of every consumer.  This limits acheiving new growth by adding new outlets. It may be why McDonald’s has increased its innovation capabilities beyond what the Huffington Post reported in 2011 were evident in its Romeoville innovation center where it develops, borrows and systematizes operations innovation.  This effort enviable to most corporations prototyped the extensive experience facelifts ranging from re-architecture and mobile ordering.  Still not clear there’s enough in the pipeline to turn the tide against   longer term trends of lost relevance and eroding sales signals.

Among 32,000 consumer reports subscribers, McDonald’s hamburgers came in last when judged for its taste against 20 rivals. This suggests that it’s not just the millenials who no longer find the fast food’s burger offerings appealing, thoguh burgers and shakes continue to draw crowds to other fast casual restaurants at higher price points too.

Bigmac sticker shock Fortune 2014The problem of sticker shock doesn’t impact Chipotle or other restaurants among the ever increasing fast casual segment, but it sure has hurt McDonald’s. As Fortune reported, the growing gap between the dollar menu and higher price points continues to widen making the higher priced items less attractive.

Changes to help the struggling chain regain its growth may require either  McDonald’s board and.or its CEO to resolve deeper structural challenges characteristic of complexity.   It will require some serious assumption busting, re-framing of the definitions of success and aligning more attributes with those characteristic of open systems environment.  No pun intended.  I do believe ramping up prototyping activities in Romeoville and  live testing of customization such as those in sourthern California will also help.

The evident discrepancy between McDonald’s goals and its shrinking share of the markets in which it operates doesn’t only create unease among its various stakeholders (e.g. customers, employees, its board and shareholders. This contrary indicators also reflect the inter-related operating decisions that constrain and limit opportunity while at the same time provide effective command and control that enhance efficiency but at increasing opportunity cost vis a vis growth.  Some of these indicators affect competitors as well as suppliers,  impacting factors that compete and complement American eating attitudes and behaviors.

For example, notice the changes in attitude reported  over the last nine years by International Food Information Council (IFIC) Foundation’s “2014 Food & Health Survey: Consumer Attitudes toward Food Safety, Nutrition & Health.”

Healthy food attitudes surveyed

This data merely exemplifies the changes in attitude over time and supports or disputes assumptionsin evidence by decision-makers running McDonalds.  It also shows how little the major facelift and experience initiatives matched, let alone change pre-existing attitudes about McDonald’s on items  corresponding to what Booz *company reported as core strengths for the brand.

These attitudes are not independent of each other and reinvention will require exercising leverage that cuts much more deeply than switching out leadership and introducing additional menu changes.   In other words, the complex tasks associated with increasing growth will require fundamentally different approaches than those available to smaller competitors or innovators carving out new space and creating  new categories.  Will their investors be patient and have enough confidence to believe in their existing leadership, only time will tell.

Looking for growth? Try consciously connecting to wider systems


Transitions to Fall visible in the night sky

The Fall Equinox

Today’s marks the transition to Fall. Unlike the ancients, the equinox remains largely unnoticed and without much celebration in the northwestern hemisphere. It’s just another day that few of us will notice connects visibly to larger connected changes in our environment.

The growing mental distance between our conscious behaviors and the physical world robb us of our cosmic place. The disconnect stops us from developing and practicing a systems consciousness which creates complacency and limits our opportunity to grow.

We are taught the solar system as children, but few of us acquire system thinking. The earth’s orbit of the brilliant sun and the moon’s near orbit influence our daily routine, the hours of wakefulness and sleep.  The subtle but repeating changes in the length of our days enabled a greater understanding of agricultural cycles.  Astute observers of the visible patterns in the evening sky and their movements when connected to other recurring changes on earth made it possible to draw hope and plan.  Only by understanding the relative presence of visible patterns in the evening sky did society find continuity and connection to the past and set a clear expectation for the future.

Few of us draw conscious meaning from the changing appearance of light on the horizon or the position of stars in the sky.  We rely on universal artifacts that record and track time–calendars and clocks to keep us on task, on target and anticipate near or longer term what’s next.

Technology continues to free our time to devote our attention to leisure as well as industrious efforts.

A consciousness that focuses on slight differences amidst recurring patterns might make us seek solutions beyond the immediate cause and effect we observe.  The coincidence of the earth turning or rotating on its access while moving in orbit around the sun is only perceptible when you track the changing location of the sun in the sky throughout the day.

In your day to day transactions how much are you noticing about the changes that are happening around you and the forces that produce these actions?

A single data point, an isolated observation always represents an intersection of multiple forces.  Rarely do we capture and attach the presence of all those forces.  We take a picture and maybe the camera will include a time stamp. Digital images capture an instance, using a combination of data such as the distribution of different light across the spectrum, may be audio or even sequence of actions. Mistaking the sun’s movement for our own orbit happens to explain why it’s easy to confuse cause and effect.  The measure of distance between the earth and the sun changes every moment but only within a range that more broadly allows us to pinpoint our relative location in the wider routine path of our orbit.

Not everyone respects astrologers and I’m not endorsing connecting the orbit of the planets as a predictor of performance in any activity.  I’m merely inviting you to take a closer look at the data and the axes or contextual reference points provided.

When you look for growth, it helps to understand the forces that favor your success.  For example, an ascending curve tracking the sequence of Sales over time  may warrant additional reference points.

Goldilocks can help you face your challenges, will you let her?


photo (1)What’s the story? Today’s headlines continue to be filled with a persistent recurring behavior symptomatic of leadership failures.  Most of us are familiar with storybook tales and parables that remind us of particular lessons. No one wants to be The boy who cried wolf. Cinderella teaches us not to give up hope, and I’m sure you have an equally simple take away for the story of Goldilocks, aka the story of the three bears.

Have you considered using simple stories, and in particular the tale of Goldilocks,  to lead differently? 

I’m actually heartened by Mary T. Barra, because I think she gets this lesson. Today’s New York Times report on the ignition switch investigation suggests that unlike her predecessors, she pursued a different approach. This stands in sharp contrast to last week’s New York Times story Business school Disrupted where Jerry Useem offers a glimpse into Harvard Business school‘s decision-making around digital, online education.

How IS it possible that one of the most premier academic institutions in the world–with articulate thought leaders on key business issues related to Strategy, Disruption and Innovation– continue to cling to their old ways, unable to effectively transform themselves?  I’m not interested in their offering per se.  Their decision options resemble those of Fortune 500 business leaders when surveyed.  They find it difficult to pursue a path toward transformation, though failing to try, often cripples their organization’s ability to sustain value and/or their competitive advantage.

I see the decision dilemma as actually two stories. One, the tale of a lizard, or chameleon, and the second the universal tale of Goldilocks.

Steve Jobs sittingSteve Jobs, from what I’ve read, understood how to lead like a chameleon. By association the story of Apple throughout its tumultuous history can easily be interpreted as a lizard’s tale. Academics, however like many cogent, intelligent thought leaders resemble Goldilocks. Their training, the PhD process itself promotes competition, neither intentional antagonism or collaboration. Individual researchers training emphasizes objectivity, perhaps fearlessness, definitely curiosity. Still academics produce results relative to existing thought using an established process.  These predictable outcomes rarely achieve or encourage breakthroughs in understanding.  Occasionally, this process model when most forcefully applied manages to create disruption in existing domains. Leaders in these established environments rely on orderliness, offsite planning and reflective discourse. Failure to challenge their process makes them vulnerable to outside breaches that create havoc at multiple levels within their hallowed institutions and the underlying operating models their continued existence depends. Basic physics teaches that a body at rest stays at rest.  This lesson exemplifies the impact of complacency and comfort, and the necessity to avoid them at ALL costs.

Goldilocks isn’t a morality tale

Adaptation came easily for Steve Jobs , though in many ways he also behaved like a Goldilocks. Constantly moving and sampling new things until he seized on an idea that resonated with his core principles—simplicity , quality and durability, as in built-to-last. His passion for these principles when wrapped around an idea supported peer learning that enabled development of a powerful culture that made his ideas tangible. The Steve Jobs in Walter Isaacson’s book both hungered for new ideas, and was steadfast in his resilience. These qualities resemble chameleons, making it possible to adapt quickly to subtle changes happening in their environment. These thick-skinned qualities made him  tough, capable of weathering transitions and nurturing— both necessary to support transformation and sufficient to support sustainability.   The verdict remains out for Apple itself.

Goldilocks adapts too.  She makes do with what she finds but she herself never undergoes any transition. She changes her environment, it doesn’t change her. Her existence also depends on encounters with normally distributed choices. The variance around the norm makes her choices rational and predictable.  This may explain why her innocence makes us lose sight of the disturbances she leaves behind.

I don’t know what personality profile Goldilocks fits exactly. It’s why I believe today’s popular assessment tools used by many companies in their hiring practices to find cultural fit ultimately don’t matter.  How exactly do profiles help an organization survive? Leaders who worry about identifying Goldilocks may be missing what I find to be the more critical perspective in the story.

What about the story of Goldilocks resonates and endures? (see post two)

Personally, I think on some level, each of us behaves like Goldilocks.  We are often unaware of how our choices create a wake or disturb the system for those who follow. We prefer to limit the number of choices. Fewer options allow us to focus and ultimately find the points of contrast most relevant, or good enough for us now. Once we make the choice, we can keep going,  gain additional experience and be ready for the next opportunity we meet.

Goldilocks always finds a suitable, generally satisfying choice after sampling all of them. What would she do in a complex situation where the choices exceed her ability to sample? The absent inhabitants of her found environment don’t stop her from seizing the opportunity or indulging her curiosity.  Why doesn’t she hesitate or allow uncertainty to get in her way? When the Bears do return, Goldilocks flees and the narrative ends.

Of course, our experiences allow us to imagine the internal voices that often stop us from pursuing what we recognize could create difficulties for others.  A verbal exchange of assumptions often proves surprising and reveals greater diversity in perspective than any of us imagine. These behaviors Leaders need to cultivate and question when presented with Goldilocks canned results.

Ask Mary T. Barra if the risks were worth the time her predecessors saved shutting down alternative thoughts, questions left unspoken and open issues under examined? Does complacency in your process overrule critical thinking and exchange among peers of diverse perspectives? Should PhDs be reviewed only by the experts in their own domain? What are the principles that every report and process should adhere?

The challenge for management and leadership isn’t to isolate Goldilocks, but to encourage and nurture transformations and mindfulness .

Are you getting my meaning?


Sense-making that’s what stories are all about. s
Surprisingly, few of us use this hardwired tool to our advantage. Having recently collaborated with several volunteers to respond to a grantmaker’s overly specified Request for Proposal (RFP), I found myself confronting the multiple meanings and associations around storytelling, from narrative to story sharing.   Was it  Mark Twain who said, ” I apologize for the long letter, if I had time I would have made it shorter?”  Well,  here goes.

It seems that too many of us confuse the message and messengers with meaning makers.  The volume of media outlets and social media sharing channels can overwhelm us and at the end of the day, one of the best contributions the journalism profession provides is the ability to tell a story and tell it well.  Sure the concept of a lead remains valuable as it easily converts into a tweet, or become the teaser to a blog post, right? But it’s the story not the lead that matters and here’s why.

Quantification, numbers, statistics and big data dominate the headlines and yet a powerful  story beats them all.  People are natural story tellers and our brain naturally likes and processes story very efficiently and effectively.  Story parallels the process in our brains that recognizes, sorts and responds to patterns. Our behavior is pattern driven which is another reason stories do more to add meaning than any set of spreadsheets, graphs or even simple analytic notation.

The power of a story

A good story resonates with us, because story literally provides context, perspective and almost always some emotional elements.  Even ambiguous stories are more easily understood than a set of precise numbers. For example, I was quite pleased to read that Janet Yellen the new president of the Federal reserve did something sufficiently unusual to prompt the Wall Street Journal to comment as follows:

While Ms. Yellen’s underlying message on Fed policy was unchanged, her delivery was striking. Central bankers tend to speak in terms of economic theory and statistics, in jargon better understood by investors and other economists than the broader public. Ms. Yellen instead exhibited a personal touch Monday by coloring her comments with experiences of three people who had struggled to gain full-time work.

 

She did what the best of us do when we want to convey a message that will be widely understood. She listened. She sought out specific meaning, rather than relying on her experiences and intuition.  In order to more clearly and precisely understand  what the present economic data the Fed collects really means, she asked people. She called up individuals who met the conditions the data suggested to tell her their story. She invited them to share how are they managing,  their background, work history, skill sets, experiences and feelings.

Her personal interviews provided her a greater grasp and deeper meaning of present economic indicators that “suggest the labor market is operating well short of its potential.”

Telling a story remains the most effective way to deliver consistent clear messages and impart more precise meaning. So she did just that, and it did enliven her message.  She reached out to talk and listen to several people and managed  ” to put a face on the challenges that are out there in the labor market”. Not only did she connect to the people who had stories to tell, she connected their story to help others understand more deeply, personalize the meaning of the economic indicators.

On its face, her inclusion of stories may appear as a politically astute maneuver.  After all, politicians have always found it useful to tell a constituent’s personal story and demonstrate conditions that justify the need or impact of a particular initiative.   Marketers do the same thing, especially when they use vignettes designed to match values people hold deeply and hope they will then transfer those emotions to the pitched product.

The power of narrative

Personally, I think Janet Yellen did something more.  Because she made the phone calls herself and wanted to really understand the reality that produced the numbers.  Isn’t that the first step in problem solving?  We all need to understand the situation more completely and rely on collectible facts to tell us what’s what.  The assumption that  indicators alone convey meaning can be quite dangerous.  On its face the momentary value of the S&P Index or the Dow Jones Industrial Average tell us nothing.  Its only in relationship to their past that we find significance.  Still additional context is necessary to draw meaning.  We try to co- relate measure of activity to news of the day and in this case we often obscure its meaning.  It’s in the qualitative, anecdotal descriptions that often lead us to understand and make new meaning of the measured results.

narratives have guided our work to inspire young people to connect with our community and been a vital tool in driving the significant change – See more at: http://ejewishphilanthropy.com/the-power-of-narrative-to-drive-change/#sthash.mzsnZ7P8.dpuf

Social enterprise and social entrepreneurs have made great use of narrative to help people connect to a community/cause and it also proves vital to driving change.  A personal story has emotional elements that attract and motivate others to go the next level. It can move individuals past understanding and conversation and inspire action. New tactics is a non-profit describes how it’s using narrative as a lever of change.

People and communities use stories to understand the world and our place in it. These stories are embedded with power – the power to explain and justify the status quo as well as the power to make change imaginable and urgent. A narrative analysis of power encourages us to ask: Which stories define cultural norms? Where did these stories come from? Whose stories were ignored or erased to create these norms? And, most urgently, what new stories can we tell to help create the world we desire?

 

The ability to engage

I came to revisit the narrative piece with help  from other astute observers who shared examples made possible by story.  One is Thaler Pekar  who writes for Philan Topic.  She invites organizations, particularly non-profits to try harder to understand not only the problems they are trying to address, but to dive deeper to understand why and what meaning a story they use carries.

It’s impossible to overlook the reality that even if you ask, and even if you listen what story you then tell represents only a partial truth. We fail because there is always the story we are not hearing. Nicola Hughes, a Knight-Mozilla Fellow explains this as unknown knowledge because any number of reasons, rational or cosmic may deny us access. The brain research on this supports what cognitive psychologists like Roger Schank have claimed for a long time.  Stories are a dialogue in sense-making.  We hear a story and have to reconcile it with what we already know.  Sometimes the story like a direct experience will help us expand and extend what we know, and sometimes we shut down.  Consciously we may refuse to accept but emotionally and unconsciously the message may still have an impact.

Janet Yellen wanted to effectively communicate not only the latest economic indicators, but also to signal that she understood and wanted to offer meaning and hope to her audience too.  The emotional elements that stories offer effectively engage us.  Use it to learn not just teach.

Getting to the future


Image

Everyone thinks about the future. The dreams of the Pilgrims  arriving in Massachusetts are no different from our individual aspirations for new possibilities and changing situations and circumstance. What new freedoms will be there,what will people be permitted to  think, wear, eat, live or DO?

My interests and passions to do what I can now to make things betters isn’t unusual.  The company I keep all agree in increasing possibilities and making changes that benefit more people, not just me and my family.  In the season of thanks giving, I’ve noticed the launch of a series of web sites  matching wishful doers with need serving organizations, and in the process create social impact.  The process used by these sites mimics many of the matching sites, whether its capital rich hedge funds seeking people needing to preserve and grow their capital, entrepreneurs on Kickstarter seeking funds to build their business or start their social impact match service. The technology itself minimizes the value of my personal network by making it possible for me to cast a wider net and build relationships that are not based on naturally limiting, real world contexts that form my identity, e.g. where I grew up or where I went to school, or my cultural, ethnic or religious ties. The stumble upon place or the sophisticated search to match my interests still rely upon individuals’ ability to influence others of the information’s value.  The  technology may be new but these resource matching problems are part of an ongoing cycle that doesn’t change, and the match solutions operate within the same system that create the resource gaps.

 

Where’s the change?

Snow appearing on the ground signals another recurring, predictable change, as does the falling price of the iPhone.  Outwardly, we show signs of adapting to this news.  Where you stand in the continuum of variation in response changes your understanding of the  most predictable of change’s magnitude.  It also explains why not everyone seeks to incorporate or welcome the change in their life.

When the obvious answer satisfies us, we ignore or suppress the possibilities that the change may be worth investigation. Changing temperatures or icy, snowy conditions difficult to miss and though we adapt and incorporate the obvious, we all adapt a little differently.  Our experience colors our understanding and response to the change.  Seekers go one step further.  They consider the choices others make and wonder if that too may be worthwhile for themselves.  They are curious about paths that open further possibilities or improve their status, conditions etc.

Seekers both experience and confirm their responses to transition moments by first learning and listening to others before sharing their own perceptions. Going beyond their  response to the change , they are conscious of the potential ripple effects.  Some look harder to find the likely path, similarly they may try to get out front and position themselves to catch the inevitable fall of the lined up dominoes. They don’t merely watch the event unfold, they try to connect what they see to a range of possible experiences and look for possible variations that happen beyond their immediate vicinity, situation or context.

Reporters,  when covering breaking news for example, share or retell what others experience in moments of change.  Often they are  hip or shoulder deep in the same experience as it unfolds, yet, they leverage and try to take advantage of their experience.  They try to reposition themselves for what will come next.  There’s an art to reporting.  It requires  piecing many different perspectives together to fill in what the participants, experts or contributors immersed in the experience overlook, misunderstand and maybe fail to identify.  Reporters are a special breed.  Their descriptive reporting shortens the distance between their audience’s detached experience and the actions and activity of their present surroundings.  Using their own senses to connect the meaning of other’s experiences they help their audience acquire a more complete, multifaceted view.

Multidimensional matters

Strategists and good consultants do this too. They leverage their experience while keeping one eye on the future.  They also help those stuck in the present to connect, hope and inspire an alternative set of prospects. Their job encourages explorations, cuts the distance between present circumstances, progress and a rosy future  for their client’s clients.  The lookout on the Mayflower merely let others know what was in sight before those on board could see it. No one would call these lookouts strategists, or leaders.  Lookouts can’t inspire people to acclimate, though they do warn them of what’s coming. Inspiration comes from a vision that transcends our fears and our expectations, not an easy task.

Today technology changes and innovations come at all of us faster than our ability to fully digest the last ones. Some of the effects cross connect, meaning that adoption of one makes it impossible to ignore the next.  Speed at which the connections happen make it simpler to stand by  and avoid participating.
No one is every fully ready for the future, but strategists can help in those moments of relentless change. their skills and experience naturally connect the dots, explore possibilities and overcome natural resistance.

Knowing your desires or dreaming about an idyllic world won’t get you to the future, though it is an interesting way to start. Regardless of what comfort level and satisfaction you feel with the changes as they occur in your midst, you need to take a wider view.  Challenge your experiences, raise your sensory awareness levels to uncover more possibilities.  Changing your perspective, point of view or the dimension in which you’ve come at the problem  guarantees your advantage as the future unfolds, and should increase the power of your risk assessment by virtue of your  wider stance.