Dear President-Elect Obama

By
Lanny Goodman
on November 8, 2008 8:32 PM | | Comments (0) | TrackBacks (0)
Congratulations.  Not everyone is thrilled with your election, but boy did we need a break from business as usual at the White House.

A couple of thoughts I hope you will find useful.

I know you got a lot of support from the unions and there is a bill pending in congress to allow unions to organize a workplace without a majority secret ballot vote.  I hope you will not support this.  The problem with unions is that they are a symptom.  They are a symptom of the callousness and abuses of managers and owners of companies that forced workers to organize to protect themselves and their interests.  While unions have offered leverage for workers in traditional "us vs. them" organizations, they actually institutionalize dis-integration.  If a more enlightened CEO of a unionized company wants to create an organization that benefits all employees and aligns them behind a common vision, because of the byzantine legal environment unionization has created, it is virtually impossible for him or her to do so.

We can no longer afford to have companies where all employees are not on the same page.  If managers are so foolish in this day and age to abuse their workers, then by all means, give the workers a way to organize.  But the democratic process of secret ballot and majority rule must apply.  Companies that are structurally dis-integrated, will be under a serious long-term disadvantage.  Not because they will be paying union wages, but because the union will prevent them from drawing on the full value employees are capable of bringing to the workplace.  The real enemy is not union wages, it's union work rules.  We need highly adaptive organizations today in which employees can flexibly and rapidly adjust what they are doing to open up production bottlenecks and satisfy customers.

For those companies that are really making an effort to educate, train and orient their employees and build highly adaptive cultures cannot do so by abusing their employees.  They have to pay them well and share the value the employees create through profit sharing and employee equity plans.  It would be criminal to undermine these efforts by making it easy for a disingenuous organizer to stir up just enough trouble to slip a union into a well-meaning company without due process.

Secondly, in the campaign there was a lot of rhetoric about reducing dependence on foreign oil.  This is missing the point.  We have to reduce dependence on oil period.  We desperately need the equivalent of the Kennedy space program for eliminating the need for fossil fuels.  Coal and oil.  The Bush administration has wrung their hands about environmental initiatives costing jobs.  How many jobs will it cost when the international reinsurance industry collapses under the weight of category five hurricanes and massive flooding (predicted by environmental scientists for decades).  How many jobs will it cost if a Miami or a New Orleans becomes uninhabitable due to massive storms and rising ocean levels?  

You have said you see nuclear (and I'm so glad we have a president who can actually pronounce the word correctly) as part of the solution.  How many Chernoblyls and Three Mile Islands can we afford?  Is it responsible to create waste products that are deadly for a quarter of a million years?  Nuclear reactors are human artifacts and subject to human failures.  These are not failures we can afford.  Surely with government leadership and resources, we can figure out how to heat and light our homes and offices, transport our selves and our goods and mobilize our military resources without poisoning ourselves.  It's not clear to me how the rallying cry became "Save the Planet" when the real issue is "Save the Species".  Global warming won't destroy the planet, but it may make it uninhabitable by human beings.  How ironic if the legacy of our species is to create a world in which only cockroaches can survive.

While I'm at it, I suppose I should mention my concern about the civil war raging in Mexico between the government and the narco trafficers.  The war on drugs has failed.  I know you don't dare touch this hot potato with banks falling like flies and the Bush administration working overtime to undermine civil liberties and distribute as much or our tax dollars to their Wall Street buddies as possible before leaving office, but as a country, sooner or later we are going to have to deal with this issue.

If Mexico's government collapses under the pressure of the narcos, we have a very serious problem on our hands.  At this point, it is very possible that any American president or legislator who made any serious moves in the direction of legalizing drugs would be targeted by these psychotic drug lords with virtually unlimited resources at their disposal.  They have proven their ability to corrupt any institution they target.  Are we so pure and idealistic in this country that we are incorruptible?  I think our history belies that notion.

We repealed prohibition and survived.  Does alcohol destroy a lot of lives?  No doubt.  Is anyone suggesting we should stop making and selling it?  No.  Do drugs destroy lives?  No doubt about that either.  And the war on drugs hasn't changed that one bit except to put astonishing resources in the hands of people who are demonstrably not concerned with humanity's best interests.  At least with legalization, we could drastically reduce the cost of drugs, put the narcos out of business, levy enough tax on drugs to pay for rehab programs for those who can't control their use and increase on the job screening and DUI penalties.  Inner city gangs would also find their source of power and revenue gone.

I know no one wants to deal with this, but I hope at least you will make  a priority of publicizing the meltdown that is occurring in Mexico as we speak.  Perhaps this will create enough conversation among the electorate that within a reasonable period of years, Americans will wake up and realize that our war on drugs has cost thousands of lives and untold misery in other people's countries.  The problem isn't even that hard to solve if we can just let go of our cultural dogmas long enough to see the damage our blindness is causing.

Thanks for listening.  Speaking for my family, all our very best wishes are with you.

This Would be a Great Time to Expand Your Business

By
Lanny Goodman
on October 27, 2008 2:01 PM | | Comments (0) | TrackBacks (0)
Ok, it looks like we've all decided to get together and have a recession.  What to do?

Certainly the usual things, conserve cash, look at your capital budget and decide what you can live without for the moment.  Mostly what you want to do is talk to your customers.  The real problem here isn't that the economy is strong or weak.  The real problem is that things are non-linear.  What I mean by that is that economically speaking, things have gone from reasonably predictable to unpredictable.  People really don't like unpredictability and when confronted with it, their brakes lock.  

The biggest challenge in these times is to hang in until things become more predictable and people get over their deer in the headlights panic and start making reasonable decisions again.  It usually takes about six months.  Once things stabilize, money starts to flow again as people have a sense of where they are.

I'm reading an interesting book right now, Shock Doctrine by Naomi Klein.  If your Milton Friedman deregulated economic philosophy can stand the jolt of a reality check I recommend it.  

A point she makes that is relevant to this conversation is that when a system is shocked (post WWII Japan, post 9/11 USA, post tsunami Sri Lanka) there is a window in which fundamental shifts can take place because intrenched interests have been numbed, distracted, or destroyed.  

This can work in positive ways (post WWII Japan) which was able to rebuild its industrial infrastructure without regard to how things had been done in the past.  Or it can be negative (post 9/11) like the Patriot Act, or post tsunami Sri Lanka where once generations of fishing villages peacefully plied their trade, now highrise hotels are mushrooming because in the aftermath of the catastrophe, the villagers were in no shape to mount a defense of their homes and livelihood.

We are in the throes of a similar situation.  The banks have been so shocked they are paralyzed.  The paper the other day said that AT&T could only get it's banks to loan money overnight.  Now that's paralyzed.  Sooner or later, the banks will remember that if they aren't loaning money, they aren't making money, at least other than the amazing creativity they have applied to the fees they charge for almost everything.  The industry made $4.5 billion (with a B) on bounced check charges alone last year.  I also read recently that the banks have no interest in actually loaning out the $700 billion the government is planning on giving them.  Makes you wonder what their plans are for that money.  

Where might that offer an opportunity for you?  I suspect there are lots of people around who have money to invest and are waiting to see where it might be put to good use other than the stock market (which seems to have gone completely insane) and real estate which remains unstable.  Do your customers pay you in 30 days?  If you teamed up with an investor to offer your customers 90 or 120 day trade credit, would that get the attention of your credit-worthy but credit starved customers?  Would you get a lock on the business they are currently sharing with several vendors?  Reasonable possibility.  You have to deal with a lot of regulatory hurdles to be a bank.  All trade credit requires is doing your homework on the creditworthiness of your customer and an handshake.

What else might you do?  If you sell through distribution it is long past time to think about selling direct to your customer or consumer.  Your distributor may not like it, but since everyone is doing it, there's not a great deal they can do about it.  If you've historically sold through distribution, odds are good you don't know much about direct marketing.  This would be an excellent time to learn.

If you are not selling through the web (and I mean selling, not putting up an electronic brochure) then you are way overdue to crack the code on that.  Just understand as you try to cut through the hype that exists around the web that it is just another direct marketing medium.  Granted one with some remarkable properties, but if you don't understand direct marketing see the above paragraph.

This may be a great time to get into other businesses.  If you understand how to organize your company into strategic business units (SBUs) and internal service units (ISUs) then you have a natural system in place to graft a new business onto your existing organization structure.  If not, buy my book and learn how.

When looking at new business opportunities, the unfortunately late internet marketing genius Corey Rudl laid out the foundations of a good business to be in or build.  They are:

1. A clearly definable and reachable market.
2. Something people want, not need.
3. A great sales process.
4. A strong back end.

Let's look at each of these briefly.  The also unfortunately late marketing genius Gary Halbert used to say at his seminars, "If we're all going to open a hamburger stand, what competitive advantage to you want?  I'll give you any advantage you want except the one I want."  He'd ask people what they wanted: a tastier bun, better beef, snappier sauce, etc.  Then he'd come back and say, "You can have all that.  I only want one thing, that I know will make me successful -- a hungry crowd."  

There are many interesting markets out there that are not readily reachable.  How about people with heart conditions?  Where are you going to go to rent a list of people with heart conditions?  Even in the pre-HIPPA days, this was information you could only infer through age demographics and actuarial information.  This makes acquiring customers very expensive.  You have to throw a wide net and spend money to get in front of a lot of people who are not prospects.  In direct marketing that's called "waste circulation".  

By contrast, bass fishermen who have bought something from a catalogue in the last 90 days are as easy to find as that bass you know is lurking in the weeds by that fallen tree.  All you have to do is get the right bait in the water at the right spot during the right time of the day and you're going to take him home for dinner.

Corey's second maxim, something they want rather than need means don't take on something hard if you can find something easy.  There is an old saying, "There is no one with endurance like the man (or woman) who sells insurance."  Why?  Because it's something everyone needs and no one wants.  One of the oldest mistakes in the marketing book is to get excited about a market for something that everyone needs.  People hate buying what they need.  They love buying what they want.  Nobody "needs" a bass boat.  But that hasn't stopped one hell of a lot of people from shelling out $20-50k to buy one.

A great sales process is entirely under your control.  That you have to design and build.  The key thing to understand here is efficiently focusing your sales resources.  In direct response marketing, there is the concept of RFM which stands for recency, frequency, monetary value.  What direct marketers know with people who bought from you most recently, do so with the most frequency and spend the most on each transaction are the most likely to buy from you again.  Those are the people you want to focus your sales resources on, not that whale (e.g. Wal*Mart) that if in one in ten thousand chance you did land would bury you and make your life miserable. 

Back end is a term that direct marketers know and understand that may not be intuitively obvious.  What it means is something else to sell the person to whom you just made a sale.  The principle is that customers are very expensive to acquire.  You may give up your entire gross margin on the first transaction to get that person's name on your list.  If you expect to make any money, you'd better have other relevant and meaningful products to sell that person in order to generate a return on the investment you made to acquire them as a customer.

Take a look at your own business.  Does it meet these four criteria?  If not, what can you do to correct the situation? Ponder on these things and get your buns in gear.  Just because everyone has decided to throw a recession doesn't mean you have to come to the party.

What to Do if Your People Have Time on Their Hands

By
Lanny Goodman
on October 27, 2008 1:54 PM | | Comments (0) | TrackBacks (0)
If your business is slower and you are finding your people have time on their hands, before you start axing your payroll, causing deep trauma to your company and losing a lot of history and knowledge, put them to work doing the stuff there was never time to do when you were busier.  

If you don't know what 5S means, look it up.  It is one of the foundations of the quality disciplines.  It means round up all the junk that has accumulated in your offices and production areas, either get rid of it or find a home for it.  Then , organize everything that's left so that everything has a place and every place has a thing, spit shine the place from floor to ceiling and figure out how to sustain that degree of organization so your people don't ever wander around looking for stuff ever again.  A useful little book is Putting 5S to Work.  It's mostly about factories, but the principles apply to any business.  It also appears to be out of print and used copies are absurdly expensive, so you might try some of the other documents available, which I haven't read.

How about training.  Our employees are typically abysmally ignorant about business: where does money come from, where does it go.  This would be a good time to invest in your employees.  It will pay big dividends.

You might legitimately ask, what about cost when I'm not making money?  If you absolutely have to trim payroll, the worst thing you can do is do so by seniority.  The real criterion is: who is adding the least value.  You have employees who are reasonably effective but their personal lives are a mess.  They are constantly taking time off to deal with one crisis or another.  This would be a good time to get that noise out of your company system.  You have employees who are not very productive but you hired them when things were humming and you needed bodies and it didn't matter too much that they didn't add much value.  They added enough at the time.  But if the game has changed, so must the criteria.  Send them on their way.  

The message you will send to the company will be very clear.  Adding value = job security.  In other words, trim the fat.  When you treat your employees like inventory (LIFO), you send a clear message that job security = survival skills with no direct correlation to adding value.

If you have to trim, don't trim to your current production capacity.  If you do, you'll have no headroom when things improve (which they will).  Use that headroom to train and put a 5S program in place.  You'll be glad you did.

Don't Pay Off That Debt

By
Lanny Goodman
on October 26, 2008 12:32 PM | | Comments (0) | TrackBacks (0)
I read somewhere recently that the banking industry has managed to lose more money in the past couple of years than the entire industry has made since banking began.  What that all means is anyone's guess, but one thing it clearly means (for a while anyway) is that you don't want to be paying off your debt.  

That statement may seem counterintuitive given the uncertainties we face which would suggest keeping a more conservative balance sheet.  But what is debt?  Debt is money I owe someone that I can't pay off all at once.  If I owe you a zillion dollars and have twenty bucks in the bank, that's debt.  If I owe you a zillion dollars and have a zillion in the bank, then that's not debt.  From a balance sheet standpoint, the two cancel each other out.  

The point is that if someone has been kind enough to loan you money because times were good and they had it to loan and they were pretty confident that you would and could pay it back, hang on to it, because once you've paid it back it will be a while before anyone makes you that offer again.  Make the minimum payments and sock away the cash to pay it off, but in the meantime enjoy the addition to your working capital that you might very well wish you still had if you precipitously paid it back in the name of fiscal conservatism.

Strange Days

By
Lanny Goodman
on October 16, 2008 1:00 AM | | Comments (0)
Wow...the markets.

It's embarrassing actually.  Sophisticated grown men and women with six, seven eight figures and more to invest running in wholesale panic.  The Dow almost 1000 points down one day up 700 the next, back and forth, completely improbable swings.

Then there's Bernanke..."broader economic recovery will not happen right away."  There's an encouraging word.  At least Greenspan understood that economics was a behavioral science and knew how to spread oil on the water to calm the markets down.

There's an old saying, "When your neighbor's out of work, it's a recession.  When you're out of work, it's a depression."

What is it when your business is growing like gangbusters while the pundits wring their hands and gnash their teeth about how awful it all is?  There are companies out there doing that as we speak.  Back in the '92 recession, which was tough for many companies, I had two clients that were growing like crazy.  One was on a 100% annual pace and the other a 200% a year pace.

Granted, when things are as ridiculous as they are at the moment, it's hard to get people to make decisions.  But human needs don't change, human aspirations don't change.  During the great depression the movie moguls made huge fortunes.  

I hope one lesson comes out of all this madness: deregulation is a bad idea.  Ok, I know this is tantamount to worshiping the antichrist to conservatives, but look back at the savings and loan crisis.  Now the banking crisis.  How many billions (trillions?) of debt do we have to burden our children with before we figure out that business cannot be trusted to police itself?  As a former client of mine used to say, "Lead us not into temptation, for we will fail."  

By the way, whatever happened to fiscal responsibility?  Reagan left a huge deficit.  Bush has doubled the national debt.  Incomprehensible numbers.  

We complain about energy costs, since we import most of our oil, the cost is a function of the value of the dollar isn't it?  Historic lows for the dollar and historic highs for energy.  Suppose there is a correlation?  Would you loan money to a friend who is clearly spending more than he earns?  Why would anyone want to loan money to us.  Our fiscal policy is not remotely sustainable.  But, our presidents are only in office for up to eight years, so it will wind up being someone else's problem.  

After decades of republicans bashing democrats for being "tax and spend liberals", how ironic is it that the only people in Congress who seem to have any concern about fiscal responsibility these days are the so-called blue dog democrats?   

I understand all the Friedman economics behind the idea of deregulation but as the old song says, "freedom's just another word for nothing left to lose."  Unlimited freedom is a utopian idea which does not work.  Limits are intrinsic to life.  If it weren't for limits, what possible use would we have for creativity?

If we want to deregulate an industry, how about we charge them a tax which is kept in a pool to bail them out when they fail (as if politicians could ever keep their hands off such a pool).  Autos, airlines, banks, S&Ls, telecoms.  You name it.  Deregulation breeds big companies, who inevitably create big influence with big politicians.  This is the result of Friedman economics.  I'm not a fan of big government but I'm also not a fan of being forced to bail out a bunch of irresponsible insurance, brokerage and banking executives to the tune of almost a trillion dollars while the rich get richer and the middle class shrinks.  

It's not an issue for me personally, because I've always made a decent and comfortable living and I'm very confident of being able to continue to do so.  But people are living at the margin in unprecedented numbers, at least in our lifetime.  How come?

Part is the pressure of the baby boom generation which had blown up every system it's hit from education, to real estate, and now to healthcare.  Part of it is we've become a knowledge economy and we haven't effectively built companies that effectively leverage our people.  Which translates into the fact that we haven't created the productivity gains from knowledge workers that we got from factory workers after World War II which gave rise to the middle class our parents largely enjoyed.  

It's time to get past the religious fervor of conservative doctrine.  Ism's don't work.  We have to mature as a people to take what works from wherever we find it.  Balance freedom with responsibility and accountability to society.  That is what we pay government for: to make sure that members of society play by the rules and to make sure there are rules to play by.  If that means business people need to work a bit harder to exercise their creativity on how to prosper within the constraints of regulation, so be it.  It won't kill them or us.  Chaos in the markets can devastate a lifetime's worth of work and effort.

My father graduated from Cal Tech in 1932.  He was one of two graduates to get a job when he left school.  Unthinkable today.  The depression marked him for his whole life, even though he was very successful by most standards.  We do not need another great depression.

What to do?  Chin up.  Good attitude.  Spread the word.  Vote for some sanity.  Find opportunities for your business, learn to leverage your people (they have more creativity and talent than you have any idea).  Sanity begins at home, with your family and your colleagues at work.  It's a brave new world.  We just need to get creative and we can all figure out how to prosper in it.

The Design of Business

By
Lanny Goodman
on September 21, 2008 8:22 PM | | Comments (0)

Imagine your dismay when this hypothetical product has all manner of dysfunctions that require endless workarounds to compensate for its bad design. Would you settle for that? Not likely. Odds are excellent that in short order you'd be on your way back to the store and standing at the returns desk.

If we won't tolerate badly designed products in our lives (MS Windows notwithstanding), why do we tolerate badly designed businesses? When you consider the relative importance in our lives of that from which we derive our livelihood, we should have far less tolerance for dysfunction at work than we do at home.

The problem is that dysfunctional organizational environments is mostly all we've ever known.

The great anthropologist Edward T. Hall in his classic book The Silent Language said that "culture is largely invisible to its participants." In our lifetimes there has been much research and education and popular awareness of corporate cultures. However, what has remained invisible is the culture of business.

For those who are not conversant with the concept, culture can be thought of as that set of beliefs and assumptions about reality that order all personal and social activities. In the culture of business, there are many assumptions which are never seriously questioned. An example would be how many direct reports a manager should have. The rule of thumb is six to eight. No one questions job costing as a legitimate accounting technique.

As a reality check, i personally know a CEO of a $600M company who has 500 direct reports and the people who invented job costing were very aware that it introduces very serious distortions into understanding how companies make money.

One of the great failings of Western culture is that we tend to fixate on symptoms when systems are dysfunctional (like our health) rather than striving to understand what the underlying causes are that are giving rise to the observable symptoms. Nowhere is this more true than in organizational life.

We have created a massive infrastructure of consultants, writers and thinkers who exhort us to have emotional intelligence, have fierce conversations, understand the five dysfunctions of a team, be one minute managers and remain calm when someone moves our cheese. This infrastructure virtually without exception if focused on treating symptoms and never really asks the hard question, "What is it about the way in which we have designed businesses, leadership and management that is giving rise the the many dysfunctions of which anyone who has spent any time in any kind of organization is intimately aware?"

Asking this question, brings to visibility, the heretofore invisible layer of business culture. It puts us in the uncomfortable position of having to question our most sacred assumptions, to bump off our sacred cows, to throw ourselves into the non-linear space of not knowing.

Most people do not find this a happy experience.

Sadly most of us are willing to accept the corrosive effects of chronic pain of living with dysfunction for the short spike of acute pain of working through the unknown and arriving at a new way of being and doing in which the dysfunctions have disappeared.

We know that organizations cannot remain static. The world is changing rapidly and organizations that fail to adapt and evolve become obsolete and incapable of delivering adequate value to their constituents to survive. The Quality disciplines (TQM, Six Sigma, Lean) are powerful tools and have had a huge impact on our ability to do more with less.

In recent years, the body of work that perhaps has come closest to challenging the norms of business culture has been Goldratt's Theory of Constraints. If you haven't read The Goal, It's Not Luck, and Critical Chain, you need to do so.

But the issue remains that from a design standpoint, if organizations were better designed, we would not have to deal with the incredible dysfunctions that organizations manifest and I would make the case that we cannot remotely afford the cost of these dysfunctions in what is rapidly becoming a just-in-time world.

How do we attack this problem? The starting point is to realize the assumptions that went into the design of what i call traditional management practice.

The inventors of management as we know it were 19th century intellectuals whose worldview was Newtonian, that is they understood the universe to be a cosmic machine. At some levels this understanding was accurate, but a long way from complete.

We now know the universe is self-organizing and that below it's more superficial machine-like qualities, creation is much more complex and unpredictable. The fact that Complexity Theory has shown us that all systems have a natural propensity to self-organize should help us begin to see how we need to attack the redesign of organizations, leadership and management.

The key elements are how we structure organizational relationships, how we compensate, how we provide feedback, how we educate, train and orient our employees.

If you look at traditional management practice from the point of view of Complexity Theory, it becomes apparent that much of traditional management is designed to prevent self-organization. Surely it makes more sense to design organizations which swim with the currents of how the universe appears to actually work rather than against them.

When Systems Go Non-Linear

By
Lanny Goodman
on July 5, 2008 4:40 PM | | Comments (0)
We are reminded today of the old Chinese curse, "May you live in interesting times!"

We are in interesting times indeed.  What makes for interesting times is non-linearity.  In other words when a system that has been functioning in a linear, predictable way suddenly or not so suddenly, the system goes haywire and predictability disappears.  

We are in one of those times.  These times are characterized by dislocation, pain, and uncertainty.  What to do?

First of all, dealing with what's real is essential.  As human beings we love to stick our heads in the sand and pretend "This isn't happening!"  The people who bought homes an hour and a half from work because that's the only place they could afford the mortgage are now between a rock and a hard place because of the price of gas.  Can't sell the SUV, can't sell the house.

Dealing with what's real means tackling the problem head-on and not assuming it's going to get better somehow.

If you're not sure what to do, talk to people, solicit ideas.  Run experiments so you can gather real-world information.  If you are a business person whose business has gone non-linear, while not fun, is inevitably a source of new and creative opportunities.  Chances are if your business has gone non-linear, others have as well.  What can you do to help them?

Interesting times are actually the times of greatest opportunity.  But not for the complacent or faint of heart. 


When was your last "ah-ha!" moment?

By
Lanny Goodman
on May 30, 2008 9:40 PM | | Comments (0)
When was the last time you had an "ah-ha!" moment?

Seems as though they come in two versions.  The first version is when your worldview shifts.  These ah-has are usually permanent.  Once things have shifted, they don't ever go back.  Discovering complexity theory was that for me, the notion that all systems have a natural tendency to self-organize.  Head slappers.

The other type is more ephemeral and usually an observation or insight on ourselves or our organizations.  These are at least as if not more important but have a tendency to slip away quickly.  If you've ever flown on a day with low overcast skies and as the plane takes off, at some point gets above the cloud deck into astonishing sunlight.  Sooner or later, however the plane begins its decent back into the murk.  So it is with these moments of insight.

How to somehow insure that these insights are not lost?  

1) Write them down.
2) Act on them.  Now.

That's what you can do in my experience.

I had one today.  And I'm acting on it by writing this blog.

The insight was this: The output of my work is not nearly as creative as the output of my brain.  

Anyone else ever share this reality?  (Raise your hand.) 

There is a reason for this, actually, but it is a problem that is amenable to process improvement.  Here's the issue:

Accomplishing anything involves two design problems:  the first is the design of what you would like to create.  The second design problem is how to execute the results of the first design problem.  What normally happens is one of two things:

1. We start trying to figure out the second design problem concurrent with the first design problem.  This turns the whole exercise into a fur ball and typically fatally compromises both the quality of the vision and the quality of execution.

2. We get so bogged down in the details of execution that the execution is late or never gets done at all and as a result we don't innovate at anything like the pace either of which we are conceptually capable or that we need to to maximize mining of our markets.

Solutions:

1. Never worry about execution during the creative design phase.

2. Build the organizational infrastructure for execution.  Hire an assistant, hire a project manager, contract with an agency, bring in a temp, set up an office space, put up a big bulletin board, do whatever you need to do to capture those ideas and get them executed quickly.

3. Engrave the following mantra in your brain: "The Key to Innovation is Miniaturization."  Execute all your ideas on a small scale.  They will execute much more quickly, you won't got bogged down with budget discussions, accountants and lawyers won't get involved (and no one can shut down execution faster than lawyers and accountants) and if the idea turns out to be a dud, so what?  The cost was relatively trivial.  If it actually works, then put more resources behind it and push.  Your worst enemy is your own organization.  

It's worth remembering that the fundamental imperative behind every organization is to make sure that absolutely nothing new ever happens.  To get something new happening you have to push people out of their comfort zones, or (if you're smart) pull people out of their comfort zones.  Bring a wild new idea to the table and everyone's brakes lock.  Bring a proven concept to the table and people will at least listen and chances are someone will get excited and pick up the ball and start to run.

Now I've got to go figure out how to apply this wisdom to my own life and business!

Is Your Business Making You Values Blind?

By
Lanny Goodman
on May 4, 2008 1:08 PM | | Comments (0) | TrackBacks (0)
I was having a conversation with a client the other day and we got to talking about one of the more insidious risks in business, creeping values blindness.  

The classic example is the tobacco industry.  One hundred years ago, tobacco was an honorable business to be in.  But as it grew and became a very valuable (financially) institution, and knowledge of the deleterious effects of tobacco became known, its members found themselves unable to make appropriate value judgments, such as saying, "We really should get out of this business because it's killing people."  Instead (as further discovery revealed) they began figuring out how to target women and children, develop additives that made cigarettes more addictive and generally compounded the felony of remaining in that business.  The ultimate expression of this was the spectacle of the nine CEOs of the largest tobacco companies on national television lying to Congress about their knowledge and activities.

As our knowledge and understanding evolve, we have to be very careful that our business doesn't stunt our growth.  The case for global warming is another example.  The only major country in which there is any serious debate about global warming is the US.  Why?  Because of a very carefully orchestrated disinformation campaign by the oil companies.  (For extensive documentation of this just Google "global warming disinformation".)  Given the potential impacts of climate change, how can the people involved justify these kinds of actions which by any standard of measure are immoral?  

In my writing on self-management, I've made the case that people's behavior is a product of the ecosystem in which they work.  It's not difficult to see how people get locked into a system where there is way too much peer pressure for individuals who have qualms to be able to change the system.  The system has way too much inertia to allow for a voice of sanity to be heard.  Meanwhile, the participants in the system are stuck in a moral dead end.  The knowledge of the inappropriateness of what they are doing is there, but they are unable to respond so they have no choice but to resolve this cognitive dissonance by conjuring up some justification for their behavior.  Taken to its extreme, this can have serious legal implications (e.g. tobacco).  For the entrepreneur, the issue is more one of developing a case of values blindness which stunts our spiritual growth.

Our understanding of what is healthy and in alignment with nature is growing by leaps and bounds.  Is your business built around an obsolete model?  If your business has to do with food, large energy consumption, large percentage of cost or value in throw-away packaging, or is of little intrinsic value (e.g. impulse purchases), this would be a good time to think long and hard about how to transform your business.

Would there be a cost?  Sure.  Would there be dislocation?  Sure.  But think of it this way, someone out there without the liability of the organizational and market inertia you have is laying awake at night trying to figure out how to displace you with products and services that make yours either irrelevant or unappealing to generations of consumers who are looking at what they buy in very different ways than has historically been the case.  

Ultimately the issue is that in times of great change, the status quo is the most dangerous strategy.  Not only does it bring a significant business risk, but values blindness is a significant personal risk as well. 

The Five Most Dangerous Words in Business

By
Lanny Goodman
on April 21, 2008 4:30 PM | | Comments (0)
The great anthropologist Edward T Hall said in his classic book The Silent Language, culture is largely invisible to its participants.  Culture, of course can be defined as those assumptions and beliefs about the nature of reality that never get questioned.  There has been much said and written about corporate cultures over the years and a quick search on amazon for "the culture of business" brings up many books on doing business in other countries.  But what assumptions do we make in how we organize, compensate, provide feedback, educate and orient our employees?  There are many assumptions and beliefs that never get scrutinized.  

And they cause big trouble.

Let's be honest, American businesses (and probably all businesses) are filled with all kinds of dysfunctions that create stress, inefficiencies, loss of productivity, waste, and stunt the development of the talent for which we pay so dearly.  The assumption that is the most deadly to business today can be summarized in the five most dangerous words in business:

That's just how it is.

It's almost if instead of the ten commandments, Moses came down the mountain with the blueprint for the modern organization.  An act of God determines how we do things and the dysfunctions we deal with, well, that's just how it is.

Except it isn't.

Organization design, management practices and processes are human artifacts, not holy relics.  They are the product of human design processes.  And anything humans design, humans can redesign.

How is it that we have fallen into the trap of assuming that when things go wrong that someone must be responsible?  Why is it that when there is a lack of trust among employees (or worse, leaders) that the people are the problem?  The facts are:

1) The people are uncaring, negligent, incompetent, and indifferent or
2) The people are caring, attentive, competent and committed, but are responding to the pressures and rewards of the ecosystem in which they work and to which they pay very close attention, and the dysfunctional behavior is symptomatic of the system in which they work.

What other options are there?

If you believe your people are caring and committed, then the only place to look is the system.

As Sherlock Holmes once said, "When all other alternatives are eliminated, whatever is left, no matter how improbable, must be the truth."

We do not have the luxury of putting up with the wasted efforts of people working at cross purposes in our companies.  We have to reinvent business around a different model.  We need to study the culture of business and realize the trap we've fallen into is that we have gotten so used to our organizational dysfunctions we assume that, "That's just how it is."

The good news is that nature is showing us the way.  More on this over the next few weeks.  

Meanwhile, the next time you let out a sign of exasperation about the dysfunctions in your organization and hear those five most dangerous words wander through your mind, I hope all your alarms go off.  The right response is, "We created this mess, and by God we can fix it." 
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