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.

 

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When Technology doesn’t work


If like me, you have a fairly stable morning routine. The usual sequence of activities from the time you step out of bed until you step out the door, or in my case step into your home office. Each takes different amounts of time but nothing is too complicated that you need to do any active thinking. The result is your mind is free to wander in any direction, alight on any object or thought that it finds interesting.

Technology likely plays a supporting role, whether its the alarm that goes off to wake you, make your coffee, or the phone that connects you to the world through email or news sites. The support role isn’t supposed to hijack but rather simplify, and reduce unnecessary steps.

For example, I used to have an all in one grinder-coffeemaker. I merely added the beans and the water, and set the timer. Its automation saved me a little effort.  It spared me a few steps: hitting the button to grind the coffee ,empty the grounds into the coffee filter, press start. (Remember either way I added the water, and the beans.) It saved me maybe a minute or two, when it worked.

The key to support? It’s got to be reliable. In this case, more elaborate automation increased chances of breakdown as well as mechanisms that needed cleaning. When it didn’t work, the few minutes I saved daily, and some were taken back.

Worse I couldn’t anticipate when the breakdown would occur, and inevitably the disruption to the expected regularity of my routine proved intolerable. So, I changed back.

I’m at that point with MS Word and close to the edge with everything about Microsoft’s operating environment. I’ve not been an Apple user, until the iphone was part of an irresistibly good offer years ago.

Today, I am using an older version of an open source program called OpenOffice. Oracle bought them, but I never had to pay Oracle. The application sits on my desktop, it isn’t linked to the cloud and it doesn’t pop up with assistance when my fat, less accurate fingers hit the wrong keys. BEST of all it doesn’t stop my train of thought as I’m typing by doing me the favor of saving. Or if it does it still doesn’t stop me from continuing typing.

This past week I was very busily writing a rather complex article. Because I’m not that organized, I like to synthesize my ideas in real time using the blank page in front of me surrounded by lots of other open documents, and websites. After the first draft was out of my head , I saved it. Sounds simple enough, right? Saving, now becomes a more complicated choice than simply titling it and placing it in a folder for future retrieval. I had too many choices, partially my own fault—I did admit to disorganization right?

I have an account on DropBox that one of my client prefers I use because we share lots of big documents and images, and it’s just easier for version control.

Microsoft in its competitive wisdom, now offers its own cloud and that too becomes an open office option…presuming I remember the password or have the OS remember it for me, on every device I use.

Lest I forget there are the different drives on my computer, I could save to a portable thumb drive device? Or the hard drive on the computer or the home network that allows me to save to my home office desktop.

Of course the different options come with different advantages. At the moment none of them were relevant, as I was just in draft mode and operating under a self-imposed deadline to preserve my sanity.

So I decided save to the cloud, its safer and I won’t have to worry about what drive it’s on?

That turned out to be a bad move.

Remember the coffeemaker story and the trade-off on time savings that went upside down on me? The same happened with this project.

In full disclosure, the topic which had owned me for a few weeks was the notion of readiness and positioning with respect to technology advantages.

I don’t know of a single writer who doesn’t find themselves pausing every now and then to gather their thoughts before continuing to organize the words. I’m older and still use long hand and then transcribe my own scribbles, which means there are lots of fits and starts due to difficulty deciphering my own handwriting. Then again, I may also decide to put my typing skills to work as I’m doing now, looking at the screen while trying to organize my thoughts.

Again, it’s the natural fits and starts in the writing process that Microsoft’s engineers seeking to support the task, or simplify and anticipate got completely wrong.

Ok, I just saw open office do the same thing. It tried to anticipate what I wanted to type. Perhaps yo too have experienced these new features. I begin to spell a word only to have it suddenly appear in its full form highlighted in blue. I have no idea how to do something with this information. Am I supposed to use it to avoid spelling errors? Or (yep the system just corrected the o and capitalizing it for me) ignore it. If I’ve managed to describe the problem well at all you too should feel a bit irritated and frustrated, or at least empathize with mine.

You see I really want to focus on my own thoughts and getting them out. I don’t want more distractions or suggestions popping up at me. It’s why I still prefer long hand and the absence of automation. Sure I can save myself some time by typing my drafts directly into the computer, they may even be more readable. But I can’t afford the distraction or disruptions…even if as I just noticed the suggested words appear relevant.

Again, I’m not looking for a collaborator when I type. I’m merely trying to express myself. Did you get that? I want to express MY thoughts, MY ideas, MY word choices.

When I need an alternative I am happy to take the extra time to open up the thesaurus, or do a google Define to get other ideas. I want my dumb typewriter back, PLEASE.

WHEN I’m ready for your assistance, I’ll ask.

I Business I keep hearing the phrase to best to go ahead and ask to be forgiven later then to wait for permission.

The biggest offense Microsoft made, was having a ridiculous inefficiency set of tools. Rather than allowing me to type and save the document in the background, it froze the screen and swapped the cursor for its spinning wheel to tell me to hold on. So after fighting with this for a few days, I re-saved the document to my hard drive. Guess what it didn’t stop the problem. Worse the document would literally jump, when it was finished. The contents on the screen would shift sometimes a few pages.

How exactly they do that I don’t want to know, that it happens and that I can’t stop it, well that’s why I’m saying bye bye.

I have been typing continuously for a good hour and other than the few annoying word suggestions and auto grammar fixes, I’ve not been stopped once by a spinning cursor.

Thank you Oracle and Open Office. I’m grateful

Now I’m going to paste and post to word press. If something surprises me over there, I will let you know.

[PS, wordpress took the pasted text beautifully. Identified my spelling mistakes ad in a few minutes I was at the bottom of this input, ready  to post. SEE Technology can be well designed for the user.]

Create value by sticking to principles and collaborating


I’ve been reading and writing a lot about creating value.  Value creation is what sustains our spirits as well as insuring us a livelihood. It preserves quality in our relationships as well as justifying our existence.

Does creating “shared value” accomplish the same thing?  creating value

A recent headline in the Financial Times challenged the premise of Michael Porter and Mark Kramer’s ideas on creating shared values caught my attention.  Corporate Shared Value, (CSV) conceptually seeks to align social impact and company success.  A very noble goal, akin to what John Mackey, the CEO of whole foods describes as Conscious Capitalism.  Andrew Crane’s Financial Times article merely wishes the CSV theory found its way into execution and not corporate report window dressing and lip service.

15 years ago, Frederick F. Reichheld  and Thomas Teal working for Bain Capital discovered that too few growth strategies successfully drove profits and explained competitive advantage. Since the traditional profit drivers failed to explain the discrepancy in performance, they turned to study costs.  Their research delved into a firm’s relationship between customer duration and its cash flow  and found the relationship also differentiated advantage. As they had eliminated one metric after another their discovery proved that value starts with building loyalty, growth follows and then profits result. Dual loyalty, they explained isn’t merely the reciprocal relationship between a firm’s leadership and its customers.  The duality extends to employees and includes relationships with investors.The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value published in 2001, detailed this research.  For businesses to focus and sustain this value creation process, the authors recognized would require fundamental changes in business practices including new ownership structures.

Porter and Kramer’s CSV theory in part recognizes a similar fundamental shift in business practices.  Their focus seeks to compensate for the historic failure of accounting balance sheets to report and record shared value as an asset.  Is it an output, or is Shared Value part of a  larger social movement?

Mark Cheng, Director of Ashoka UK and Ashoka’s senior advisor on social finance  explains the challenges in this article that appeared in Forbes, How Philanthropists And Investors Can Work Together To Create Social Change. He suggests, that trying to build a social innovation isn’t a company but a social movement and that’s why it requires very different investments.

To change consumer behavior whether you plan to build a new market or a social movement requires organizations to earn people’s loyalty to principles.  Reichhold and Teal explain these learnings as necessary to properly differentiate between creating measurable value and creating profits.  Porter and Kramer hope businesses will value social progress, but this alone won’t re-legitimize a business. A verbal commitment to value can’t create the cost-benefit advantages necessary to sustain the firm.

Social forces of loyalty can and often do bind customers, employees and investors. Indeed they serve as measures of  cash flow and indicate a company’s ability to deliver superior value. The interlocking set of a firm’s operating principles creates both a cause and effect which satisfies, inspires and engages all stakeholders to sustain the firm.

Alternatively, a collective solution and collaborative mindset that aligns around a broader set of principles or values clearly stated presents an opportunity to create shared value. Because the concept of shared value offers people the means to take part with the resources of a firm, these mechanisms also share in, and contribute to, the success of the wider social movement.

Cheng explains that different funders should rightly have different roles.  A social business partnership between a business enterprise and an NGO doesn’t have to compromise or tradeoff its economic goals for the benefit of social good.  Using philanthropic funds to cover start-up costs for the shared venture and utilizing the distribution prowess of the corporate entity is one way to make win-win social impact possible.

Social progress is difficult to achieve by a single player, however a shared operating model based on sound principles can be adopted and replicated to spread the changes more widely.  The goal for the business may be self-interest,  where self-preservation will be a result of its underlying value creation principles and relationships.

Social Impact Strategies: Muscle, Teeth and Bone


In the advent of the sequester bringing the expiration of the continuing budget resolution on March 27, and theWashington DC

2013 budget battles raging in Washington, my concerns echo many others. This gridlock loses sight of opportunities and mechanisms to create demonstrable, sustainable solutions to larger societal issues.

OK, I realize that a $3.6 trillion Federal budget, makes it hard to understand

$85 billion mandatory across-the-board federal budget cuts. Reportedly, the cuts spare many aid programs serving the poorest and most vulnerable Americans.  Putting aside personal politics, little doubt exists that current needs outstrip the quantity and quality of dedicated resources to meet them. Particularly troubling, the March 1 cuts disproportionately affect low-income Americans  adding additional burdens on resource strained charities. The emotions released by the congressional battle further complicate objective program evaluation and consideration of where and what programs warrant

cutting vs. preserving.  It also avoids honest discussion of  historic questions.

What should and can be the net value, or efficacy, of federal funded grants and programs to meet these needs?

The complex interactions, mechanisms and incentives by which government, private enterprise and the third sector operate in the social arena make alternative scenarios and innovation difficult but not impossible.  Change may come based on a new budget requirement that I hope will unleash much-needed adjustments to the system at every level.  I’ll do my best to explain, and in return ask you to consider your own role in perpetuating the divide, and how your investments could be redirected and the benefits redistributed.

How effectively are you using your muscle, teeth and bone?

 The preview: Conscious Government Capital

Effective 2014, a May 2012 budget instruction the White House issued to the heads of executive departments and agencies, requires all Federal grant-making agencies increase the role of evidence in their grant-making formulas. The memo suggested three approaches:

  • Encouraging use of evidence in formula grants,
  • Evidence-based grants, and
  • Pay for Success.

These were in addition to a model developed by the Washington State Institute for Public Policy (WSIPP) that ranks programs based on evident  returns on investment.

 Wow! Competitive advantage and grants will flow to agencies whose programs demonstrate greater levels of evidence of their effectiveness.  Program providers who can prove their outcomes will get paid for their successes.  This slight change in policy does more to jumpstart accountability within a sector slow to measure itself.  It also energizes and attracts the interest of unusual bedfellows—players in the larger capital markets.

Debating organizational responsibility for the whole of society typically pits private vs. public players’ activities against one another. Each watches and fights the efforts and right of the other to create the future. In the process, advocates arguing for greater checks and balances exclude careful inspection of a third vital force. I’m describing the third leg’s impact, specifically, the  poorly understood effects and poorly coordinated activities supported by charitable donations, well-meaning grants and volunteer contributions.

Writing for The Daily Beast , Ken Stern eloquently shares his observations on the inefficiency of our current philosophy around charitable giving.  Puzzled by  the surety of faith and absence of critique on this third sector’s intermediary role in our lives, he writes:

“The public—and private—investment in the social sector is one of the critical elements of the American social compact, yet it is one of the oddities of public life that each year we renew this investment without ever pausing to ask the same questions that we ask of every other public and private investment: what are we getting in return, is the investment structured correctly, is the money going to the right places?”

The answers reflect different levels of engagement and interaction ranging– from passive to active. The vast charitable landscape and ease with which individuals establish personal private charities further dissipates impact on any single issue.  Consider where your donations flow relative to your top concerns.

Can additional accountability changes revitalize the third sector and elevate its stature sufficiently to offer a significant counterweight to break the deadlock in Washington?

New mechanisms open new opportunities.  How can performance partnership pilots (such as those embedded into Health care reform and now promoted by all Federal agencies) create new paths and alternative realities?  Can these channeled resources provide the necessary fuel and impact to reinvent  health care systems and access, guaranteed quality education,  preserve the environment, resolve energy issues etc?  Of course commitment levels vary and weaken foundations’ abilities to impact and sustain significant changes that contain or alleviate complications.

These problems and their complexity challenge everyone and explain the growing continuum of investment, participation and contributions in this space. Engagement ranges from  Muscle, using influence; Teeth, making your mark; and Bone, establishing a connective, resilient structure.  Which is right for you and your organization?

 Muscle

Historically, the heaviest lifting done to eradicate disease and increase economic livelihoods succeeded through comprehensive coordination.  In Colonial times, governments leveraged their authority to build necessary infrastructure and disproportionately benefit business and economic interests. These changes rippled improvements and improved the lives of the general populations too.

Today, spiraling entitlement program costs and accumulated  tax credits, tariffs and sector supports  produce exclusive benefits difficult to sustain, making everyone ill at ease.  Intricate problems don’t make them impossible to resolve.  Downstream economic benefits often justify providing credits and supports to resource consuming and output producing organizations. But, as Ken Stern observed, increasing social needs now exceed the capacity and political will of government to act alone to meet them.

Ken Stern is not alone in his assessment of what holds back resources, devoted to this sector from realizing greater impact.  In 2011, the Chronicle of Philanthropy reported that demand for aid from nonprofits increased at a faster pace than philanthropic giving by companies.

“Because of the small growth, many nonprofits aren’t getting the money they need to do their job…”

 The spirit of personal choice permeates the landscape of charitable giving. Gates and Buffet use their muscle, their influence, to secure significant commitments from fellow billionaires by encouraging that they too dedicate the majority of their wealth to philanthropy. The Giving Pledge lists the pledging individuals, but does not pool funds or support a particular set of causes or organizations. It only asks individuals to give the majority of their wealth to philanthropic causes or charitable organizations either before or after their death.

Are there clear  benefits using this approach?  It extends charitable activities supported by these donors and the charities reach by introducing much-needed attention and critical dialogue to the merit of these activities.  Stern points to the ever-increasing number of non-profits and specialized, if not duplicitous charities that result. Each carve out a niche and unintentionally work at cross-purposes.

So why did Warren Buffet, known for his prowess in picking great companies that anyone can run, turn over his charitable fortune to Gates to invest? Simply, he empathized with Gates’ action plans that address the absence of good measures of charitable efficacy.  Their charitable interests transcended seeing their  millions merely alleviate pain and suffering  in the manner of many religious charities, whose good work largely continues unquestioned.

Teeth

The concept of Social Impact or making measurable differences quickly captured Gates’ imagination and energy.  Recently, Gates wrote about the value of impact measurement for the WSJ and makes clear that if you aren’t monitoring progress than it’s pretty difficult to make any.

Strategic philanthropy can be defined by dedication personal resources to a singular focused charity, or channeling them to an agreed purpose or outcome that creates real opportunity and situational impact.  Defining the purpose clearly, defining the outcome and agreeing on the measure of success helps every donor make a mark, boost their efficacy and ultimately diminish the problem.

Hunger in America, provides an interesting case in point. Sadly, this problem re-emerged after national awareness generated by the media had it licked in an earlier era. The successful campaign attracted high level politicians’ attention and secured commitments to adapt pre-existing Federal support programs to meet these needs. The result was the Federal Food Stamp program administered by the Department of Agriculture  in  coordination with the farm support programs.  Today, multiple federal public assistance programs exist not from inefficiency but out of a growing understanding of the problem and efforts to target services to specific critical populations, e.g. low-income pregnant and breastfeeding women and new mothers and their infants; distribution of temporary hunger relief through food pantries and the school lunch program as well as households in poverty.

Feeding America, in their online FAQs, document how today, food assistance needs exceed the capability and capacity of  SNAP , Supplemental Nutritional Assistance Program and the other programs.

In spite of ample effort and dedicated coordination and volunteer efforts, the gap has not closed but grown with the economic downturn. The persistent number of households living with food insecurity lives daily with uncertainty not knowing where their next meal let alone access to basic nutrition will come.

Good news once again, activists have kicked up a media frenzy to draw both volunteers and the interest of politicians to rectify this situation. Learn more at TakePart and the film A place at the table. Will and should government assume leadership to resolve?

 Bone

The coordination and interconnections necessary to move beyond marked progress and end the problem requires much more than charitable resources.  It also reflects the long-term trend the Chronicle of Philanthropy reported in July 2011:

“[Increasingly,] companies are zeroing in on social issues that threaten their bottom lines, like people’s ill health, high transportation costs, or diminishing fresh water. They are also focusing on causes that help them tap into new markets, appeal to their customers, and use their employees’ skills.”

Case in point, CSX donated $1 million  to the Future Farmers of America, one of a few key national groups it supports. Tori Kaplan, assistant vice president for corporate social responsibility, explained their desire to attract young people with the skills and interests it needs were participating in FFA.

“We’re hoping to foster relationships with FFA where the students would look at transportation and its connection to agriculture as a viable career,” she says.

The numerous partnerships between Non-governmental organizations often supported by philanthropy, the business sector and the government provide the three legs that create a stable platform for society.  Each leg keeps the other in check and accountable.

These partnerships go beyond what Feeding in America highlights on their site. They depend on investments to rewire the mechanisms that created the problem and create value to attract capital to create more mutual sustainable system. That requires a deeper assessment of  problem inter-dependencies. Desperate people engage in desperate behavior to get their needs met. Reduce if not remove the reasons for their desperation and the resources used to combat them can be used more productively.  Instead of relying on redistributing waste, kindness and surpluses to satisfy unmet needs create greater efficiency, employment and opportunity for understanding and accomplishment.

Leveraging the efficiency and accountability of capital markets offers new hope to create sustainable solutions.  Social impact bonds, or pay for performance success instruments offer such a mechanism to make all parties publicly accountable. The example demonstrated how investing in social services for released offenders that successfully integrate into their communities and find meaningful work at a living wage, produced measurable benefits of increased safety and lower future incarceration costs.

The full circle encompasses economic measures of societal impact, and look beyond the benefits to the target population or social service recipients. It means everyone benefits from the success, not just the immediate clients.  In spite of several programs demonstrating this full complement of returns, it took recent calculation of the benefits and the costs to produce the necessary investment instruments to support their funding. In the UK they call them pay for performance or social impact bonds and now slowly appearing in the US.

 Next?

Regardless of how your corporate charitable activities uses its muscle to invest in community causes and provide valuable volunteers, have you looked for more tangible benefits beyond risk avoidance or raising the positive sign on your public profile.  Maybe it’s time to ratchet up your game. Chances are your employees already sit on boards of numerous non-profits and use their teeth to place their mark and  extending with charitable matches your firm’s resources to mutual benefit.

More interesting opportunities come  when going beyond the marginal resources at your disposal in  corporate foundations.  Why not leverage the full force of the economic assets at your discretion?  The Chronicle of Philanthropy noticed a shift evident in 2011 when corporations appeared to concentrate their support in favor of bigger, higher-profile gifts to fewer organizations.

“in part because of a long-term trend of companies zeroing in on social issues that threaten their bottom lines, like people’s ill health, high transportation costs, or diminishing fresh water. They are also focusing on causes that help them tap into new markets, appeal to their customers, and use their employees’ skills.”

Case in point, Walmart. Over the last several years, Walmart’s amount of charitable cash donations, over $342 million in 2011 topped the Chronicle of Philanthropy’s Corporate giving list .  In 2013, they joined the Partnership for a healthier America changing their own business practices  to align their efforts to make healthy food affordable for families.  This is the public private partnership that helped Walmart leverage its supply chain efficiencies and prowess while also gaining toe holds in communities who fought their incursion.  Key opportunities cited by the Washington Post following Michelle Obama’s recent Walmart visit included:

  •  Wal-Mart  opened 86 new stores in “food deserts,” areas where accessibility to affordable healthy foods is limited.
  • Launch of its “Great for You” icon, which will appear on more than 1,300 of its house brands of foods and beverages in U.S. stores, making it easier to identify nutritionally sound choices.
  • Cutting salt and sugar in its house brands and encouraging national brands to do the same.

Wal-Mart, the nation’s largest food retailer, holds at least one-fifth of the grocery market, according to trade magazine The Packer.

Lots of ideas here, but would love to hear what I may have missed, or other stories that show evidence of more creative innovative approaches to improve the overall system!

 

To win the game, we have to change the game


I can’t imagine the pressure on a CEOs when their organization misses the targets t120918053535-out24-shareholder-value-gallery-horizontalhey set for themselves.  How can they not take the failure personally?  More importantly, how do they turn the fail into opportunity?  Frequently, they publicly declare to the world renewed commitment to their strategy, reassure everyone that  management  knows what it’s doing and asks stakeholders to have a little faith.

A glorious future beats a glorious past.

This past week, Warren Buffet of Berkshire Hathaway released his annual shareholder letter and so did another hedge fund billionaire, Edward Lampert, the Chairman and now Chief executive of Sears Holdings comments.  2012 was tough on both companies.

Buffett reminded shareholders of his long-term management contribution:

“Over the last 48 years (that is, since present management took over), book value has grown from $19 to $114,214, a rate of 19.7% compounded annually.”

Lampert acknowledged his pride in the company associates for their resiliency in 2012 and then expressed the following:

“After reporting poor results for 2011, culminating in a very poor fourth quarter, we declared that we would take significant actions in 2012 to restore confidence in and financial stability to the company, while, at the same time, remaining focused on transforming Sears Holdings and creating long-term value for our shareholders.”

The vast differences between the diverse portfolio holdings of one  make comparisons to a single narrow industry portfolio holding company difficult, but it’s the philosophy of these two successful financiers that caught my attention.  Buffet’s reputation and success remains untarnished as he acknowledges sub par performance, meaning below the returns of the S&P 500.  Likewise, Lampert’s nod from his board to take the CEO reigns indicates their great faith in his judgment.

Both of these leaders inspire others to believe but how much do they expect shareholders to understand?  Rereading both of their letters, a wonderful clarity of mission and dedication to longstanding strategies can’t be missed.

Buffett draws readers attention to three elements that unlock the portfolio’s Intrinsic business value: one qualitative and two quantitative measures–per-share investments and per-share pre-tax earnings from businesses other than insurance and investment.

Lampert talks about creating long-term business value with an interesting description of EBITDA.  He shares an analysis of  value added by closing non-performing stores that reduced investment in non-performing stores but provided upside when the real estate sold.

An initial read shows just how similarly these two financial wizards think.  But who needs inspiration? How will sharing beliefs in these fundamental principles help hold the relative  position?

Which rubber and which road matter

Theory doesn’t always make for good practice and now matter what plans you make, until put into motion it’s impossible to know the results. The best predictors can’t incorporate every possible condition and inevitably some expectations go unrealized.

That’s where belief really counts. Funny, ever wonder why people believe what they believe?  It turns out that believing doesn’t require understanding; but it does color our interpretation.  Make believe, the imaginary is anything but real. Our beliefs and the way we interpret or make meaning of our reality is largely but not exclusively determined by the most recent experience and current context. This is the Halo effect at work which predisposes us to favor what we believe and what we first hear or see.  No experience? Ambiguity gets resolved unconsciously, consistent with context.

The more diverse  and numerous our experiences, the greater the number of differences or nuances in our understanding which results in unpredictable results.

Change the frame or limit the context of shareholder value to  financial expressions like EBITDA will reduce the variance in meaning. Formulas and standard accounting practices assure investors of an equivalence which makes EBITDA meaningful regardless of their depth of understanding, while also increasing the power of their belief in the financial measure to provide great meaning.

But accepting an idea doesn’t mean we believe it. Ever take a test that resulted in a wrong answer?  Perhaps, you asked why your answer was wrong, convinced you had it right.  Maybe your answer didn’t match the expected answer and so the first evaluation was incomplete.  Your answer didn’t make sense to the grader though it was still correct. An equilateral is both a square and a rectangle. Since different experiences lead to different beliefs both generate even greater diversity of understanding.

Big ambiguous ideas like shareholder value may be easy to believe but harder to understand and harder still to set clear, consistent actions into motion.Easy to measure share holder value at a point in time, but CEOs tasked to deliver it going forward need to provide greater clarity, less ambiguous and more specific associations and not risk letting recent experiences or context prove its meaning. What actions does the CEO wish to inspire, what associations does their message need to imply or offer guarantee?

Shares imply ownership and the value suggest material wealth.  For Berkshire Hathaway, a shareholder owns parts of lots of different companies with an assurance based on Buffets statements and reputation that their wealth will grow.  For Sears Holdings? Shareholders own a portion of physical tangible business components that are much harder to guarantee growth.

Align beliefs with understanding

If I yell Fire, everyone reacts almost immediately and reaches the same conclusion–flight.  There’s no visible delay between the declared message and the actions it produces.  The brain wastes no time finding the best match and cues our nervous system and muscles to respond.  No conscious awareness of decision or choice seems at play, move first,  think later. The instantaneous assessment of the environment places Fire in context, and fits a pattern in our memory, and a complete script presents itself making our next moves clear.  We are off following it without questioning its veracity, or applicability. We pay attention to what the script tells us not the ambient information surrounding us, unless of course that information boldly interferes with the expectation found in the script.

Simple question, which scenario came to mind for you?

1. I yell fire when the tinder in the hearth finally catches, and you left the fire pit at the campground to go find matches or more kindling nearby.

2. I’m cooking over a grill and yell Fire when the grease from the chicken has dripped off the foil, landing on the hot coals.

3. I yell fire when I smell something burning and see smoke in great quantities billow around the curtain on the stage in front of us.

I’m betting that your imagination took you to scenario three, the one that represents a scary, fearful situation. Especially since the idea was raised in a wider discussion of shareholder value or returns, a topic that triggers a similar set of automatic reactions depending on the experience or understanding of the listener.

The financial media pundits provide language that makes sense to their readers without appealing to the experience or context of employees or customers.  Our word choices even with the best of intentions don’t guarantee translation of similar expectations and in the case of shareholder value don’t make it easy to make a move without understanding more.

Leaders use of language creates expectations across a diverse set of audiences with vastly different understanding.  To get the people in your organization to produce the necessary EBITDA should the burden of understanding be drilled down to the lowest level of the organization?  Telling them about the challenge or demanding the performance may set the expectation, but leadership needs to do more.  They need to engage in the language and experiences that will trigger the scripts and make it possible for employees to believe their doings and their actions help. I have faith that Lampert is on the task.  It was his words that inspired this post.  His articulation of the convergence of new behaviors made possible by technology supported knowledge, a  complex transformation experience currently shared by many businesses.

Lampert isn’t the only one with an offensive strategy attempting to get out ahead of the curve.  JCPenney, Best Buy and now Barnes & Noble are all experiencing the loss of faith by shareholders that parallels the lost faith of their customers and employees.  As Buffet remarked in his letter, this is not a time for waiting.

“The risks of being out of the game are huge compared to the risks of being in it.”

Lampert’s plans?

“…we will use technology and training to encourage and embrace feedback to improve and make it much more transparent to everyone, thereby increasing accountability at the store and associate level.”

Both of these successful men know what can happen when you yell Fire.  Let’s just hope that the script that gets activated keeps their stakeholders on the same page.  Challenging but not impossible.

 

Success–Are we there yet?


This perennial refrain seems to be cropping up everywhere.

There yet? The question implies trouble of being here, now.

Forgetting to experience or notice the journey can undermine the value of achievement. Stock market analysts know the difference between easy targets and more challenging ones that require more than luck to make happen.

Yes, results matter, but so does process. Every moment contributes to the resulting experience and offers learning opportunities which stick with us whether we remember them or not.

Great sports matches are often remembered by a pivotal play that resulted in subsequent win or loss.  Distance (here vs. there) and time (now vs. not now) can represent opportunity as well as additional risk to the end game.  They don’t merely differentiate success and failure.  They also color our perceptions of how cross-organization functions interact and their perspective role in three often confused activities: strategy, planning and execution.

If you are seeking to realize and sustain positive results, I suggest changing the playbook you use to compete, and recognize that of these activities two are necessary but only one sufficient to your larger purpose.

High  performing organizations both understand and differentiate themselves in strategy planning and execution. General Electric, known for six sigma, IDEO’s design thinking or Wal-Mart and its supply chain optimizations represent examples of learning institutionalized throughout an organization.  But in each of these organizations their culture and associated process orientation masks the underlying interplay of strategy , planning and execution that account for their ongoing success and growth.

If growth is the magic elixir that you and your organization crave, then I’d like to suggest you let go of certain associations that naturally arise when your team meets.

The linearity and suggested sequence implied in visual representations and schematics of value may block creativity and obstruct alternative points of view.  Sure, there’s a value chain associated with Roger Federer’s success in Tennis.  Wouldn’t be surprised to find a strategy pyramid in the offices of the top NFL teams.  But for everyday fans these would seem superfluous models and that’s my point.

Can you get in the zone?

Take your organization and re-imagine them as a dance troupe, or different departments as a basketball team who plays zone defense.

Got it?

OK, now we can begin to think about the role of parallel and coordinating actions and the interplay of strategy planning and execution.

Strategy

For whom, why, when and where does what you do matter?   If you can answer that question, then you are on your way to understanding the role of strategy in your organization.

Strategy assesses capacity and capabilities  of your internal resources and then evaluates opportunities to capture market value relevant in the time and place you choose to operate.  Identifying what is worth your time, energy and materials implies that you have already evaluated the value of those things.

Economic value emerges where needs meet resources capable of satisfying them.  There’s some mystery or error in calculating value because:

1.  Not all needs and resources are known, let alone the strength of desire to satisfy them.

2.  Not all resource or needs recombination prove mutually satisfying.  Not much demand at the moment for three handled coffee cups, or expert photography chemists who can create and develop film.

3. Time and distance not easily controlled. Produce’s value varies by the timing of its freshness.

Planning

with purpose firmly established by strategy, planning focuses on effectiveness and coordination.  Planning commits and communicates resource allocations to insure timely coordination and delivery.  Using a sufficient plan, versus identifying a necessary set of steps, can lead to different levels of performance.  Leaving some fluidity in the process insures that the inevitable error or surprises that arise don’t stop the organization cold but merely result in delay.

Adaptive organizations keep their purpose in mind and may buy insurance but also include some wiggle room.  In short, they naturally permit on the spot adjustments.  Really great organizations communicate and share the learning throughout the organization.  Keeping track of the readjustments enable downstream teams to reposition and insure proper handoff, passing or maybe even bypass.

Deployment or execution.

Readiness and a focus on efficiency means the resources are both ready and able.  Trained, incentives and motivations well aligned, materials where they need to be, and  in the condition that fit the task.  This is the stage most closely associated with process and yet as the preceding steps specify, different types of process are creating value at different stages.

Let’s go back to the metaphor of the basketball team.  The General manager and coach may have generated the strategy that resulted in the assembled team that is now playing, but they are taking note of every play and to make adjustments.  Likewise, the planning that the coach and his practice schedule and offline support crew provide leads to the readiness of the players and their ability to adapt in real-time.

One more thing

Alternatively representing functional areas as a series of coordinated teams may be hard to depict. Jonathan Cagan and Craig Vogel have done a reasonable job  presenting an integrated new product development model (see Creating Breakthrough Products). But they stop short of the assumed responsibility for parallel tasks of Strategy, planning and execution  in every functional department. The willingness of an organization to realize that problem solving skills are not strictly aligned with a particular functional role.  These skills when nurtured and developed across the organization with accountability up and downstream offer enormous benefits.

Higher value emerges when diverse perspectives interact.  Given opportunities to share their capabilities and illuminate the blind spots in each other domains can lead to breakthroughs in performance, add functionality or develop new functionality and entirely new concepts.

Ever try to picture your ideal target customer?  Finance may provide their spending attributes. Marketing may share their demographic characteristics.  Design may describe how customers use the product or service. And Engineering may demonstrate the qualities customers find distinguishing.  Suddenly, a more holistic set of tangible representations emerge that allow more consistent evaluation of cost saving opportunities, or even better, help reconfigure functionality.

Valuing innovation and creativity throughout the organization and giving cross-organization communications higher priority, new value opportunities surface. This may seem unwieldy and impractical; but, once again think of coordinated zone defense or a dance troupe.  Sure, mistakes are bound to happen. When they do, your players will be more responsive and better position to support each other, pick up the slack and  more handily facilitate success.

Should every action be susceptible to questioning and revision?  Change procedures make sense, and are an appropriate part of planning. They insure that large changes and investment decisions are well-coordinated or strategy driven. The idea is to avoid making surprising changes during execution that ripple and produce more problems later.  Having an open line down and upstream in your process AND a line into planning makes it easy to resolve the situation, and arrange if, and when,to make the change.  Deployment may be downstream from planning but its voice must be actively part of upstream assessments by both planners and strategists.

So how are you integrating your strategy, planning and execution?  How effectively integrated are your organizational functions?  I’d love to hear of your experiences and what benefits if any you experienced.

 

MAKING IMPOSSIBLE POSSIBLE


Recently I returned from the 2012 Annual Creative Problem Solving Institute, aka CPSI, where I presented a short version of my framestretching workshop, and in exchange gained valuable insights and tips.

For 58 years, the Creative Education Foundation offers in one form or another an annual conference where people from all over the world gather with the express intention of sharing.  From new ideas, to furthering individuals thinking using experiential learning, CPSI remains focused on celebrating the wonder of our natural abilities. The  open-minded learning community reminded me that more is possible than impossible.

A few lessons

1. LAUGH. Invoke humor regularly.  Laughter is  wonderfully freeing and an expressive release of tension and stress. it is a great activity for all the senses if you put your mind to it.  Jon Pearson offered up 100 tips and shared these teachings.

The Cat in the Hat by Dr. Seuss, 1957

The Cat in the Hat by Dr. Seuss, 1957 (Photo credit: Wikipedia)

In the words of Ted Geisel (Dr. Seuss) “Nonsense wakes up brain cells.”  In the world of creativity, objectives and hard work aren’t enough. We need accident and realizations. We need play. We need to believe what good humor reminds us of all the time:

 WE’RE HERE—ENJOY IT!

2. PLAY.  Seriously, put your curiosity and fidget energy physically to work and share the results.  Jacquie Lloyd Smith  guided my direct experience in playing Lego with strategy in mind and shared the rationale or thinking that makes it work.  Her process filled gaps in my thinking and her suggestions  allowed me to reconcile competing truths that had stopped my forward momentum.  Talk about stress, finding a third truth, or better experiencing an idea helps us activate another path to understanding.  Leading with our heads, and not discovering reality with our  senses denies our ability to feel the security or weakness of our decisions.  Try it, let people build something with simple pieces that allow everyone to be equally successful and you’ll immediately discover how differently we think, imagine and feel.  Lego can be a wonderful tool that way, but so can spaghetti, marshmallows and tape

3. DRAW. Practice first with circles and squares. The physical focus, movement and feel when drawing objects everyone recognizes boosts your success and confidence in an ability that few of us use.  Yes drawing, as Elizabeth Pastor of Humantific explained activates completely different parts of the brain,  clarifies our thinking and effectively communicates universally  critical concerns, issues, ideas. She demonstrated visual sense-making and if you aren’t sketching in your note taking and or minutes you are missing opportunities.  Do you want to help people think about people, relax and be balanced?  OK, I put in that last element because I believe that’s what happens.   OK I’m guilty because here I am doing the typing and not the sketching as I blog my renewed commitment to the process.

No, that’s not all I learned, but these are the things that make my other learning possible.  If I have inspired you to try, please share what you plan to try, and maybe we can hold each other accountable.

If not, then I encourage you to read Value, honor and reward everyone.

And by all means I also encourage you to use Happy crayons.

Growth doesn’t elude those who connect to customers


Jeff Bezos and anyone else holding Amazon stock must be pretty happy this past week after seeing the stock shoot up 15 % as the last quarter revenue was up 34%.  Grwoth and performance are the cats’s meow in capital markets!  But Amazon is afterall just an internet company, right?  Steve Henn of NPR interviewed Ben Rose, president of Battle Road Research who offered a little perspective. 

 while Amazon made $190 million dollars in profits last quarter – McDonald’s, which is now worth less on the stock market, earned more than 1.2 billion. .. the reason so many investors are excited about Amazon is that it is growing – fast.

 

Fast growth means a lot to the street, investors as well as senior managegment.  The double hockey stick, or ability to repeat performance over time before hitting the point of stagnation sounds precisely in keeping with our expectation of CEOs and yet their inability to knock them out of the park consistently puts Bezos into a very exclusive class.  

The difference in earnings for  Amazon and McDonalds illustrate that there’s a lot more to the picture. Rapid growth requires more than stepped up demand, but an ability to also step up quality, supply and  delivery efficiency, generate positive experiences while sustaining your reputation increasingly matters.  

For years, McDonald’s strategy for growth emphasized opening more restaurants to reach more customers. The problem was that as the efficiencies from scale began to stagnate , flattening the upward  trajectory of the growth curve.  As masters of scale and efficiency and even quality, the price advantage certainly helped them during the recession but by their own standards of success they recognized they needed to do more.  They turned to their innovation team and began to set in motion a series of tests that not only allowed them to upp sales per customer but returned their growth rates to an upward trajectory.  Design helped them completely shift their thinking and relinquish some of the central control and dictates allowing the individual outlets flexibility to satisfy the local tastes and prefrences from menu items to the restaurant design itself. 

 

The shift from central to decentralized control  is not merely the return of the pendulum swing. 

 John Kotter, writing for Forbes,  observing the ever-increasing rate of change and the inability of many organizations to thrive, also observed that static management principles stymie timely transformations.  What stops organizations from adapting or flexibly responding to the larger dynamics at work in the market?  

20th-century, capital “H” Hierarchy (a sort of hardware) and the managerial processes that run on it (a sort of software) do not handle transformation well.

I read this comment and immediately began to understand something I had failed to grasp.  It’s easy as an outsider to recognize and empathize with the challenges of an organization whose leadership voice the words and know deeply they they need some of that innovation. I thought it was thier lack of vision, or their inability to appreciate and value the customer experience or a series of solutions that have been echoed in innovation circles by business strategy, design thinking  and change management professionals.  What I missed was a lesson I had learned and quickly forgotten because it was a painful chapter when I worked for Fortune 50 banks and found myslef the change agent.  Most managemetn teams are responsive up the chain, and in my experience the marching orders they followed were reinforced with clear rewards for delivering performance. 

Getting to the C Suite requires making all the right moves, delivering the results that were expected and that’s the system you know. The trend to outsource was an innovation to cost reductions and creating efficienciey when what mattered was being lean and oil was bad for your diet.  Consumers adapted becasue they never did know the difference between a local company paid customer service rep who spoke english and seemed to know the score and one paid by an outsource firm and could repeat the tasks for multiple companies.  

The price for that efficiency is the loss of control, the ability to truly be agile, nimble and responsive to shifts in the market. You may have surrendered to the forces that Joe Pine describes commodotized your business, swapping out tasks to experts while stepping up the your investment in the new new thing.  

The entrepreneurs who are running circles around the larger providers can do it becasue either they control every inch of their value chain, or the are able to begin by leveraging technology that is fully integrated, seamless and allows for transparency across the system. 

Its unclear how long Amazon will be able to keep up their growth rates by challenging new business sectors failing to make the transition.  Revisiting your structure and decision-making hierarchy certainly helps ….

Taking the jump


Kansas' Thomas Robinson (0) fights for a rebound with Ohio State's Deshaun Thomas (1)

It’s hard not to be swept up in the enthusiasm and excitement of the NCAA basketball tournament finals.  In the men’s final, Kansas Thomas Davis and Kentucky Anthony Robinson may be taking the lions share of the attention, but this is basketball, a team sport.

March madness,  aptly named doesn’t merely test the NCAA players’ individual strengths and abilities, it also tests the players’ resilience in the face of intense competition.  The tournament teams demonstrate performance derived from a highly orchestrated and elaborate combination of planning, coordination and engagement, all of which  makes the games so watchable.

Recruiting the talent, the vision and leadership of the coach, the  mechanics of the practice regiment, codes of conduct, the branding of both the tournament and the individual teams and the general environment converge to attract the network contracts and endorsements that all create the frenzy atmosphere of the tournament.

The value of Together, or Team

March Madness may be about college basketball but it’s also a lesson about  performance which if extended into other domains could change the reverence for the power of the individual,  the dominating paradigm in American culture.  Let me explain.

Vision, inspiration is often associated with individuals, especially those who take on leadership roles.  In any sport or any physically demanding activity, an individual earns recognition based on their level of play,  raw ability and talent. In American culture our heroes are largely sports figures because they illustrate the best of what’s possible. Independent of their ethnicity, their socioeconomic status or native environment, their natural talents catapult them to success.  This is the idea behind the phrase picking ourselves up by our own bootstraps.  Sure, ability plays a role, but there’s far more at work and if we don’t recognize it and help others understand it, Americans will fail to get the success that follows when we take the jump  whether we make or miss the shot.

Reflection and broadened horizons

One crucial piece of vision includes the coach, an individual who  receives significant credit for the player’s realized success.  The strength of a coach, who may or may not have been a former player or performer, recognizes that the vision of victory must be shared.  Sure, the one player who may see they have a shot needs to consider whether someone else may have a better chance of success.  The collective, or how one player’s strengths can play off  another, requires a collective vision of victory, that relies on more than a single player’s ability. Successful coaches promote the best of the abilities in all their players, not just the stars. In basketball, the unparalleled success of Phil Jackson extends from what he gives. © AP Photo/Kathy WillensAs one of his players explained, he learned how to give themselves to something they never thought of before. The Washington Post in 2009 suggested Jackson’s success extended from his willingness to broaden his player’s horizons to try things  and challenges beyond basketball.

Unlike school, the NBA is not the place for unproven or untested stars, so Jackson started with a great talent pool.  But few players who ever played under Jackson’s leadership will deny how much greater he made them.  He takes individual stars, and teaches them to be great leaders and confident thinkers and not just executors.

Performance is an art form 

Performance is an art form. No results are certain, no matter how well a team practices, rehearses and plans. Basketball players recognize no matter how great their individual contribution,  the game depends on coordinating their actions to seize the opportunities as they present on the court.  They have to look beyond themselves, learn to help their team mates move and position themselves in response to the events as they unfold.The only way to gain that trust is by working with each other on and off the court. After all, success is determined by the number of games the team wins and loses which includes not only the combined tally of every player’s winning shots, but their assists and passes and blocks.

In school, children are taught to work in teams too, a transfer of the successful team approach. Evaluation however remains stuck on measuring how well an individual performs and largely ignores the impact of the collective effort.  We judge schools and teachers by individual performance scores on standardized tests and miss the value of assists, passes and knowledge sharing.  Missing the parallel to “the game”, or the tournament, limits the validity of students’ ability to apply and execute what they have learned in more natural environments.

OK what about in your organization, what parallels to “the game” do you use to measure the interdependency of the combined abilities that  you’ve hired?  How often does the hiring plan take on a balanced approach? Who is the coach that goes out of their way to help individuals work and play with each other better?

Performance in the mix not the individual

American organizations need to learn and replicate more of  what Phil Jackson does, maximize potential in everyone. Scott Williams blog suggests “He creates a culture of focused chemistry.  The number one priority in coaching and leading is to create a strong culture by developing leadership, empowerment, communication, authentic care for others, relationships, trust, and motivation.”

Much to the benefit of every American, it’s not just successful basketball coaches who recognize that helping individuals persevere, and self-correct during times of challenge and crisis is a critical skill set.  HBR blog on leadership recounts how the US army, includes resiliency as part of its overall leadership training. The curriculum’s success depends on getting people to think about their thinking, or what psychologists call meta-cognition. Beginning in 2009, the Comprehensive Soldier Fitness program draws on many of the same principles that Jackson uses to differentiate both his approach and the teams he has coached.  For example CSF teaches individuals

“To identify and leverage their own strengths and the strengths of others to overcome challenges. People are on a team for a reason, so figure out why and let them use their potential to accomplish the mission.”

Self-reliance, deeply embedded in the American character shaped the philosophy of the school system and the character of many of our entrepreneurial heroes.  The inventors that idled alone, the industrialists who knew how to make prudent investments and the more recent code jocks who have helped create the future.  They all find the area that maximized their particular abilities and strengths, right?  They took the jump shot and it paid off handsomely for all of them.  They didn’t make every shot, but their own persistence and resilience helped them win as they battled against the tide. They fundamentally believed they could make the shot they did and just as importantly they kept trying, they didn’t give up they didn’t let the system define them, or limit their talents.

I’ll close with some perspectives from Sir Ken Robinson who advocates for an end to the linear thinking and persistence of knowledge frames that don’t enable different strokes for different folks. If you haven’t heard this talk, I highly recommend it.  The hallmarks of standardization and consistency for efficiency characteristic of the American school system that measured personal merit quite narrowly, contributed to pyramid style organizations that excluded creativity.  We need to regain the ability to value an array of different types of performance, to measure performance based on the cumulative interactions of multiple strengths and abilities. I’m not advocating for more variance on the indicators or standards we have, but more variety in what we recognize as performance that counts.

We have made college too big a prize, in spite of the most famous college dropouts business success. Like the army, other organizations need to help people develop the strengths and confidence at every stage to keep working at learning and to keep practicing, the very qualities that make high performance and resiliency possible.  We need more leaders, like Phil Jackson who are willing to prove the clear value of every member of their teams contribution but works with each to develop their skills and abilities.

Finding hidden treasure in plain sight.


Prospecting, mining both are familiars metaphors describing the activities associated with finding and developing  resource rich opportunities.  Rarely  in plain sight for any passerby  to scoop up and gain advantage, prospecting for Gold, other metals or precious gems like diamonds require active and often deep digging capabilities.

Like precious metals or gems, the secret to good business is creating precious assets of intrinsic value. The attributes to value when known for durability and uniqueness, such as a brand, retain  value over time,  predictably generate  cash flow and  become  difficult for competitors to acquire. But the uncertainty of today’s markets and the disruptive threat of new technologies can quickly erode the value of any asset and so growth is essential.  Whether your strategy calls for acquisition or organic growth, either way, the underlying development and prospecting costs need to be contained.

In stories and legends, merely having a treasure map and knowing where to dig doesn’t always lead to happy endings. Technology has certainly helped to mitigate the risks or advance probabilities of success.  Ground and water penetrating radar and detectors   discriminate ferrous and non-ferrous metals pinpoint the site to begin mining and improves the probabilities of a fruitful yield.  The challenges in any mining activity depend not on the power of the technology or in making the dig profitable. Today’s WSJ headline reads Gold hits $1,700.  Absent reliable, hidden treasure maps knowing where to look is an advantage. Returns depend on offsetting the difficulty and risks associated with its extraction and the quality or grade found. Forbes recently summed this up  USAGX’s Denbow: Gold-Mining Companies Face Challenges Finding New Supply.

Prospecting is a perennial challenge for any and every business, and managing the costs is the key to delivering returns.  The current market turmoil has done more than merely  increase investors uncertainty.  for the Risk averse, who have shied away from innovation  or the adventurous  business who has wisely taken pause, I suggest this is a great time to revisit your strategies.  Standing still can prove surprisingly  advantageous if in the process of cleaning house you discover  undervalued or even overlooked assets.  What value does an earlier project, research or failed product launch buried for any number of reasons offer? Lance and Scott Bettencourt of Strategyn write in Harvard Business Review in June 2011 Innovating on the cheap  a series of suggestions on how you can  leverage your existing assets, or rediscover value in surprising places.

Mining existing assets

I suggest a process that may take you a little further.  Consider Google’s Search business and the  underlying value of its algorithms and index.  Maintaining these assets is of critical importance but so too is the value of constant improvement.  Daily, new content and pages added to the internet require Google’s index continuous update.  Including  rich and diverse content such as images, video and sound  files on the internet challenges Google’s index  and algorithm update to accurately rank and deliver the results.  Realized innovations  continuously contribute  to Google’s financial performance and persistent high  market valuation. Even Google however has failures. Research,  experiences of both internal and external users generate additional  assets hidden in plain sight. Actively sharing and reflecting on the meaning of both successes and failures  allow new project teams ready access to key insights that otherwise would be left to lie fallow collecting dust.  If Google continues to draw value  or benefit from their latent assets, can you?

Identifying data or purpose

Frequently, environmental conditions change a variable’s significance.  Strategyn authors talk about unrealized value in products that may have been premature for the market,  experienced formidable technical difficulties or their launch prevented  by high manufacturing costs . Nothing stays constant anymore.  Consumers are always adapting  their preferences to changing circumstances and environmental conditions, and  business are equally forced to adapt.  A variable’s significance in your business model  in one moment may prove insignificant later. Persistently changing conditions is  why its’ important to frequently revisit your tactical plan and forecast models; and occasionally revisit your business model/strategy.

In 1984, Jesse Jackson was the first Black American to run for President.  I was an assistant statistician working for CBS News assigned  to use the exit poll and early returns to create prediction models to track trends in voters behavior. Race became a significant variable , where as before it had not been much of a determinant factor.  To increase accuracy, the forecast model needed to adjust to accommodate and recognize this historic precedent.  Likewise, when I joined Citibank in 1985, the business needed a P &L model for an innovative new offering in four test markets that linked savings and credit products in a relationship.  No one had looked at  interactive product performance before and the experience was a revelation.  The adaptation to existing analysis and risk management tools were instrumental contributors to the explosive growth of Citibank’s  credit card business. The original business proposition  failed to consider that the risk in a bundled loan or relationship,  product was not merely additive but interactive.  Early, controlled testing allowed them to go back to the drawing board armed with new insights and better understanding of the boundaries.

New data is rarely the culprit in a failure; but as things change,  more data enhances interpretation and  provides insights to re-imagine your business.  When you are the largest issuer of credit cards in the world,  accurate risk models  can be built using available billing histories.  In the 1990’s  mountains of itemized purchase or transaction level was left untouched, though its potential value was clear,  there were no clear benefits to justify the monumental costs of analysis. This was a treasure waiting to be mined.  Lacking urgency or absent a competitive threat also minimized the value of uncovering additional insights into consumer’s behavior.

Fast forward just under 25 years and the costs of time and computing resources to sort high volumes of transaction data is trivial and the returns from real-time processing lucrative. Mined transaction data triggers fraud alerts and delivers additional purchase suggestions based on comparison to  individual consumer history and that associated with cohorts, peers or “friends.”  Amazon  demonstrates   mastery in mining  typical  point of sale enhancements and redeems enormous  value from its dual function processing.

Opportunities and technology capable of mining even richer, more complex data eclipses  the significant value accrued from mining transactions.  The potential  value is driving the collection and complex tagging and sorting  of recorded customer service conversations, video capture of consumers shopping or following their daily routine at work or at home or all the places they go  online, key strokes, eye tracking, written comments.  It appears that there are very few domains of human experience and activity that remain a hold out from data capture.  The number of matching and sorting tools, the algorithms and systems also are getting simpler and more widely accessible.  Today, the speed and volume of results Google returns in a general search is far more advanced than credit card billing records I analyzed.  When was the last time you checked out Google’s  specialized search tools or the technology  coming out of their labs?

Returning Power to the People

The  insurmountable challenges are no longer in finding available data, or even privacy. Its ubiquity and increasing open source availability creates an even bigger challenge,  turning the vast amount of real-time data into a durable advantage.  Sunday’s New York Times (August 7, 2011) reported the unusual establishment in Chicago of a team of specialists tasked to help Chicago harness the technology and gamut of rich data the city collects.  Not alone in its efforts, Chicago is  farther ahead of other governments in creating easy interfaces that contribute to the public’s use of  its treasures of recorded and collected data.  Transparency adds more value by increasing the number of analyst reviewing the information, spotting trends or creating applications that simplify the lives of residents.  For example, the free Bus tracker application to let riders and plan their trip better.  It also holds his office more accountable  and increases the opportunity for activism by city residents.

There’s no doubt that power accrues to those who can imaginatively convert  data into both meaningful and doable innovation.

Finding treasures by leveraging connections

Today’s data mining technologies facilitates more than  accountability and activism.  Beyond knowledge of the type and place of available data,  a dedicated commitment to sift and mine the growing mountains of data requires critical analysis and matching skills.  Google does not stand alone in its specialized capabilities, numerous competitors offer diverse and specialized alternative search tools.  Numerous open source tools  make it easy to sort and manipulate any of the open data made available online.  As in prospecting, the tools and ability may narrow the competition and may advance the process. But those systems capable of exploiting and  enhancing anomalies  with supplementary information increase their chances  to uncover intrinsic value and thus create durable advantage .

Innovation results from capabilities to invent but can equally result from abstraction and adaptation.  Most of us at one time or another have come across a person who managed to re-purpose or refashion an object for an alternative use.   For example, the flower bed below.

Between Naps on the Porch eclectic landscape

Don’t merely consider looking at your existing data in its current form, but revisit it with newer analytic capabilities made possible from the numerous open source and proprietary data mining tools rich in functionality.  Consider supplementing your understanding of your assets from the perspective of your final judge, the consumer.  Also consider these sources:

  1. If images are worth a thousand words, spying consumers who refashion or use products for purposes beyond the manufacturer’s original conception can prove inspiring.
  2. Conversations and story are at the core of social media’s power.  The words of mouth, or stories  associated with transmitting and  promoting your business also motivate, inspire and compel employees to higher performance and deliver insights into how your product can be improved.  How often are you  using these to find products  in your inventory or services, that you may over overlooked or underestimated, but  are important to a group of consumers?
  3. Sales Data–Data mining tools can be used to find surprising blips, if you look beyond the blip.  Focus your analysis on the less understood context such as coincident placements or other variables that may not have made it into your database but none the less explain the anomaly.  They may very well be the source of an unrealized opportunity to refashion and reposition products that have trailed in sales.
  4. Last, perhaps you need to apply data mining tools  on your own data collections. The files of failures, tucked into drawers or file cabinets, the product research and or launches that never saw the light of day may call for another look.  After all, consumer preferences are always evolving, but so are your competitors, as well technology that may allow you to overcome previous cost barriers.  For example, oil and gold extraction from very difficult places is now proving economically viable as both these commodities benefit from high market prices.

More reason to harness data mining technologies to jump-start innovation in product marketing, reuse or refashion your assets to generate additional cash flow.

I’d love to hear of your experiences recapturing value in your business by any other routes as well as  suggestions for good tools or tips to improve your data mining or prospecting success.