Passion, People and Principles
There are some mysteries about my hobby – pop music – that I would love to know the answer to, because I’m sure that if I understood them better there would be some interesting business lessons: a) What really ARE the marketing lessons of Madonna’s career? How did someone of her (shall we say modest) talents become the lasting global phenomenon she did?
b) Why is there such a dichotomy between “hip” and “professional?” McCartney was always clearly the most talented musically, but he could never approach the reverence that Lennon achieved thorough his “attitude” and “persona.”
c) On a related point, most of the (I think) truly talented pop music artists I like – Abba, Beach Boys, Bee Gees, etc, – are viewed as terminally unhip, no matter how well they sell. I know that says a lot about me, but beyond that, what does it say about the role of “hipness” in marketing?
d) I like the Eagles, I really do – but how does one explain the fact that their Greatest Hits volume 1 is the best selling album of all-time (rivaled only by Thriller.)? Does that teach us more about marketing and management or more about musical tastes?
e) So much of pop music success seems to be about “catching the cultural wave” – which is what a lot of businesses would like to know more about (and which ‘The Tipping Point’ only just touched on.) Has anyone developed any general lessons? Anyone want to co-author the book?
post # 138 — July 20, 2006 — a Strategy post
Cristian Mitreanu has written a fascinating article called “Is Strategy a Bad Word?” He writes:
What explains the relative failure of most organizations to create effective strategy? Part of the problem …can be traced to their interpretation of the word strategy itself…
In war, objectives can often be clearly defined, and so strategy is thought of as a means to a specific end. ….By contrast, sustainable success is not, and cannot be by definition, an end unto itself or a goal to achieve. That is, goal orientation becomes arguably inappropriate when success has to be indefinitely sustained.
Despite this, an overwhelming number of top executives and researchers make extensive use of objectives in their quest for lasting corporate success. …It is, of course, impractical and probably imprudent to advocate a total ban on using objectives in creating corporate strategy, but it is important for strategists to remember that the more specific an objective, the further away it may potentially lead the organization from its optimal big picture.
Another person who offers the caution that we should beware taking our business parallels from war or from sports is Charlie Green, my co-author on The Trusted Advisor.
How does your view of how you would make business (or career) decisions change if there were no “end points” and no date- or time-related objectives? What if all measures were temporary indicators on the way, rather than ‘final scores’?
What if you were aiming to create something that would go, on and on, outlasting even you, with no one point at time being the ultimate stage at which you measured your success?
This is evocative of a biological entity or a species. How does the species act if the measure of success is not a state at any period of time, but the overall health and fitness of the species to flourish and survive in whatever new environment comes along?
Bring it closer to home: What if the whole point of the enterprise (or your career) was to survive, pass on the gene pool and act as stewards for the next generation? What if your business’ goal was to give your (business) offspring a better life than you had?
These are not new thoughts: others have written about this “stewardship’ approach to running a business (for example, Peter Block (although there’s a weighting toard the moral argument in his work). Some of these ideas are also embedded in Collins’ and Porras’ book Built to Last (not built to maximize income next quarter, but built to LAST).
Viewed this way, the right measure for success of the enterprise would not be “net shareholder value” but whether or not you had “left the organization behind in better shape when you leave than when you inherited it.”
The fascinating thing is that I do hear some (usually very successful) firms talk this way, and this approach (related to the One-Firm Firm concept described in Managing the Professional Service Firm) does, in my anecdotal experience, lead to greater commitment by the members of the organization, and hence better work and service delivered to customers, and hence superior financial returns.
So, let me try and elicit reactions from you out there, who are probably ahead of me in understanding this point of view – what precsiely do you do differently if you take this perpspective? What does it mean for how you manage, deal with clients, employees and others?
Obviously, if you don’t know when the final whistle is going to blow – or if you know there isn’t going to be one – what does that do to how you live your life, your career and your business enterprise? Or as Cristian Mitreanu would ask: what does doing strategy really mean in this context?
post # 137 — July 19, 2006 — a Managing, Strategy post
Kieran Flatt, with whom I have corresponded, has written a piece about IT strategy in law firms called “Pick a side…and stay there. ” Here’s what he had to say:
There are a lot of firms out there with something of an identity crisis. Their profits are good but not stellar, their reputation is solid, their key client relationships are fairly secure. Do they choose the path of management theory and use IT to shift the bottom line? Or does the partnership buy into the philosophy espoused by David Maister, the high priest of profitability in professional firms, whose simple recipe for success is to focus almost exclusively on excellence …….. with much less emphasis on strategy, processes, technology and management structure than is the norm.
It is a tough call. Either get big and global, rely on good management and innovative systems, commoditise much of your business and slash your margins to compete – which gives the leaders of the IT department a vital role in driving profitability and running the business – or just focus on providing good support IT, keep costs to a minimum and expectations low, and let the fee-earners and partners get on with making the money.
While I appreciate being given yet another label to wear (‘the high priest of profitability”?) I’d like to offer some clarifications.
First, I think Kieren unnecessarily downplays the variety of roles that IT can play. It’s not just (or even) about slashing costs – the greatest value may be in empowering the front-line professionals to deliver more value. As Richard Susskind’s famous Grid illustrated, there are many ways to think about using IT and they are not all large-scale systems available only to mega-firms – and they are not all about lowering costs.
What I’d really like to clarify, however, is Kieran’s description of my philosophy as “focus almost exclusively on excellence …. with much less emphasis on strategy, processes, technology and management structure than is the norm.” and “let the fee-earners and partners get on with making the money.”
I’d phrase my philosophies slightly differently. If I’m the high priest of anything, here’s my catechism:
1) The main goal of business success is to figure out ways to get better, not to get bigger. That mostly means changing the behaviors and habits of the people who interact with clients and subodinates. Technology can help this, but is only a support instrument, never a substitute.
2) If it ever comes to a choice between quality and volume, you must go with quality
3) Strategy is not (yawn) about one more restatement of goals and plans but about permanently adopting new behaviors you are going to live your life by. I’m all for strategy. I’m just against strategic planning, which is nothing more than a diversionary device to avoid addressing strategic issues.
4) The secret to business success does not lie in enhanced processes and systems but in enhancing one-on-one interpersonal interactions, inside and outside the business. Don’t build a system before you have created the desire to use it. For example, you don’t get people in silos to collaborate more by providing for the capability of better exchanges of jointly useful available data. You’ve got to manage them so they want to be team players.
5) Technology is a wonderful tool to put in the hands of energetic people with focus and ambition. It’s a terrible substitute for energy, focus and ambition. You don’t hand out sophisticated weapons to people until they understand and believe in the cause for which they will be fighting.
6) Too many places put in new tools so that the front-line senior people won’t have to change what THEY do, – ie, they pass the task of achieving competitive advantage on to the techies. Firms have taken this approach for a long time – they would rather spend money on low ROI activities than change personally. They did this in marketing, always looking for something (branding, PR, brochures, websites) that could be done by somebody else, so they (the front-line senior professionals) wouldn’t have to change the way they dealt with clients and customers.
7) Management STRUCTURE is just another excuse to reshuffle the deck chairs on the Titanic – I vigorously support effective management and managerial processes, I’m just against believing that formal structures, systems, procedures, policies and one more bureaucratic initiative truly represent what management is. The mantra is: focus on changing behaviors, not structures!
So, yes, Kieran, I agree there’s an alternative to the “get big and global with innovative IT systems to slash costs” strategy. But it’s not to “de-emphasize strategy, systems and management” – it’s to understand what these things really are, and to understand how firms of all sizes can adopt healthy philosophies and practices, even if they don’t have the mega-bucks for investment that the big boys have.
And it certainly isn’t “let the fee-earners and partners get on with making the money.” That sounds too much like a cop-out, do-nothing strategy. The alternative to spending on IT is being vigorously active in helping individual human beings get better at interacting with other human beings inside and outside the firm, in ways that lead to greater enthusiasm, excitement dynamism and profits. (Of course, said that way, many firms will vote for the IT investment instead – which is my point!)
Here endeth the lesson.
Shaula Evans, part of my tech team, spotted an interesting discussion with John Updike, which raised some concerns about the future of publishing. Since we discussed the future of writing books in this blog back in February, she thought we all might be interested.
Apologizing for her rephrasing, Shaula says
In short, much of the advice to (published and aspiring) authors in the digital age boils down to: “Don’t worry about monitizing books. Give books away, and make money through collateral revenue streams.”
To which Updike responds that authors are writers, not performers, and not likely to succeed as entertainers.
Of course, you (David) have already addressed in your post the reality that those of us who are not already John Updike are not likely to make money through the conventional book publishing and promotion model, either.
It makes me wonder if the middlemen (Amazon, speaker’s bureaus, promoters) are the only ones making money here…
Shaula, I would also relate your comments to the recent stories (New York Times July 17, 2006) about film director M. Night Shyamalan’s superior ability at self-promotion. Do film makers need to turn themselves into a “brand” to get their films into blockbuster status? Should we all be taking lessons from Madonna on how to create and market (constantly evolving) personas in order to draw attention to ourselves?
Do these challenges apply also to those of us trying to practice so-called “professions?” Do we consultants, lawyers, accountants, engineers and others have to take note of all this?
I do believe that there is such a thing as marketing with greater or lesser taste, but as much as I want to sympathize with Updike, I think we live increasingly in a pop-culture world where performing and entertaining ARE indeed where the money lies.
And, Shaula, if the writer doesn’t want to take control of the marketing, the performing, the persona creation, then, as has always been true in the music business, the intermediaries will write the contracts and make the most money.
Denise Howell, a long-time blogging lawyer, announced on Saturday that she had been fired by her mega-law firm and used the occasion for a stimulating post about the apparent inability of many (all?) businesses to really offer flexible work-lifestyle balance options to those seeking an alternative to flat-out careers.
Her blogpost elicited numerous comments on her blog and across the blogosphere. Virtually all of them provided sympathy and support, and took business (especially law firms) to task for failing to deliver on the promise of work-lifestyle balance options.
Since it is my normal role to be the provocateur, can I risk (without any lack of sympathy for Denise) exploring the opposing point of view, that it might not be possible for a business organizations to offer, in one firm, a widevariety of personal choices on work intensity?
I first wrote about the issue of shared intensity in my book TRUE PROFESSIONALISM in 1997. Here’s an excerpt, from a chapter called How Firms (Should) Add Value:
The importance of having something shared is illustrated by a firm which asked me to moderate a retreat between its two warring factions. One faction was involved in a transactional, high-intensity, premium-fee type of practice which demanded significant dedication including long workdays and frequent weekend work. The other faction had a more small-business, relationship practice where the pace and the rewards were lower. These two groups labeled themselves the “Sharks” and the “Flounders.” (These sound like David Maister labels, but I didn’t invent them – they did!)
We struggled mightily at the retreat to establish firm policies which would accommodate both kinds of practice. All concerned hoped that differences between the groups could be resolved through compensation system adjustments. Of course they could not, and the firm eventually split up – which was probably the right outcome.
Neither group was wrong in any real sense. One group wanted the excitement of a fast-paced practice and the rewards that flow from it, and the other was willing to forego high rewards for a more normal lifestyle. Either group could be happy and get what they wanted in a firm of like-minded souls. Neither could live with the other. Differences in intensity could not be papered over with dollar differentials. At bottom, there was no reason for these groups to be in partnership with each other.
(I’ll be discussing this example a little more in my new podcasting series on strategy.)
In another chapter in the same book, I reported a similar real-world experience:
The importance of shared intensity is also illustrated by my experience working with a consulting firm aiming (they said) to be the “truly excellent and clearly a leading firm”. We spent months figuring out precisely how to get them there, and came up with a plan that, all agreed, would work. But then one professional, in front of the whole group, said: “We are all saying we want to be the best, and we agree on how to become that, but are we really willing to accept that much change in how we practice?”
I called for a secret, anonymous vote with the following scale: Vote “5” if you really want to “go for the gold”, and vote “1” if you just want to make whatever changes we have to make to avoid ruining what we’ve got. Or you can vote something in between.
The result? The vote was split between one group with “4’s” and “5’s”, and another with “1’s” and “2’s”. In preparing their strategic plan, they had all acted as if they wanted to be “truly the best”, but when push came to shove, half of them didn’t really want that much change in their lives. Was either group wrong to make their choice? Of course not. It’s each individual’s free choice as to what to do with their professional lives.
However, the firm now had a problem. How was it to proceed? One approach considered was to attempt to use the compensation system to accommodate these differing preferences. Those who wanted to “Go for the gold” (and succeeded) would be compensated for their efforts, while the others (who wanted a different lifestyle) would accept the financial implications of this choice. We named this the “Tolerant” approach.
However, the more we explored this possibility, the less feasible it appeared. Even if the right compensation levels could be determined, how would firm decisions on investments be made when there were fundamentally different goals? How well would people of different intensity levels work together? Could one really apply two different performance standards?
The more we discussed, the more it became apparent that to function effectively, the firm needed its professionals to share an intensity level (be it high or low). There needed to be a shared “Social Compact”. The firm needed to agree on a set of values, goals, and performance standards and then be intolerant about everyone working to fulfill those goals and meet those standards.
Neither side was wrong – not everybody has to aim to be world-famous, and not everyone has to make a lifestyle choice. But it is hard to achieve anybody’s goals (income, prestige or lifestyle) if you’re in partnership with others who do not share your goals. It was no-one’s fault – they were just in the wrong marriage.
Those were my experiences and views in 1997. Has my perspective changed?
Not really.
Please note that I am NOT arguing for everyone working themselves to death. My argument is that a single, given organization, if it is to be cohesive and stick together, must have a SHARED, common intensity – whatever that level of intensity is.
It should be possible for all the people who want medium-intensity career choices to leave their high-intensity firms, join together with like-minded people, and run a medium-intensity operation, accepting the trade-offs that come with that choice.
Like most business leaders (who, contrary to popular opinion are not all venal monsters) I would love to believe that a single business entity could offer choice of intensity – but I’m not sure it can if it is aiming to be among the best in its field.
Can the Olympic team let people decide what work-life balance they want to choose? I don’t know the factual answer to this next question, but I’d love to know: can a mission-oriented organization like the Marines or NASA offer work-life balance options?
Forget “management.” In a high achievement context, would the rest of the team (the colleagues and co-workers) really be willing to let individual choices be made, without giving in to resentments that some people are not seen as carrying their “fair” share of the burden? I’m not arguing that such resentments are valid – but I am reporting that they are virtually unavoidable and poisonous when they do occur.
Is it really possible, as many (including Denise) would hope, that an organization can offer a Chinese menu of work choices and benefits (take one from column A, one from column B and so on), I doubt the practicality.
I’m reminded of one of the lessons of Jim Collins’ book “Good to Great” that to cover the gap implied in the title of the book, it is first necessary to (and I quote) “get the right people on and off the bus.” In other words, in you want to come on our ambitious journey, fine. If you don’t that’s also fine, but we’re going there and your either with us or – you’re not with us.
Now, I could easily have got this factually wrong. Maybe it IS possible to both be the best and offer intensity options. If so, I’d love to be directed to real-world examples.
post # 134 — July 17, 2006 — a General post
Today, I’m hosting this week’s Carnival of Business. Numerous submissions were made, from which I have selected what I thought were the most interesting (presented here in descending order, starting with those I liked most.)
I LOVED Small Business CEO which describes how a Japanese company is redesigning barcodes to have appealing visual elements, to help with branding. There’s a neat video to watch, too! I’m usually a “function over design” type of person, but this one got through to me.
David Lorenzo’s Career Intensity has a thoughtful Top Ten list for Superachievers (and actually, for everybody else.)
The Business of America is Business contains an excellent discussion of the ongoing debate about whether the extradition by the US of the three UK bankers connected to the Enron affair is valid. Whether you are new to the story or have followed it all along, there’s good analysis here.
Matt Inglot has a really useful post (for beginners) about how to process online payments. I found it very helpful.
Getting Out of Debt has some creative ideas about running a home-based business, especially on turning weaknesses into strengths.
Christine Kane (a musician) writes about having an Adventure Day – doing something unpredictable and fun. She took the idea from a business context and applies to personal life, but it translates back very easily. A fun and stimulating post.
Money Thinking presents a list of eight questions to ask to determine if your new business idea is a good one. Not the first time I’ve seen these thoughts, but a good concise list.
Small Business Trend Radio has a 60-minute audio on search engine optimization for small businesses. I would have preferred the information packaged in a way that didn’t take 60 minutes of my time, but there was useful information there.
Debt Free explores the issue of the number of visas issued to allow foreign tech workers to come to the US, making the argument for protecting domestic US employment. Vehemently argued, with supporting statistics – but he didn’t quite convert this naturalized citizen who has a bias for open markets.
Blogtreprener describes how, every Friday, he and a group of friends get together to discuss ethical issues. This post, on ethics in entrepreneurialism, is a bit lightweight but could stimulate some interesting discussions in any group you may have.
Sequence Inc reports on the lawsuit against insurance companies by those damaged by Katrina. Does hurricane damage cover flood damage? There’s not a lot here that’s not been in the newspapers, but it’s an interesting topic.
Nubricks.com referring to a US site, talks about (some pretty obvious) good and bad reasons to cash in on the equity in any real estate you own.
RadicalHop.com makes the simple but effective point that ther is no such thing as time management – only self management.
post # 133 — July 14, 2006 — a Strategy post
Here’s an old question that’s newly relevant. In a network of operators, how do you tell if the network is working?
The network could be the different offices or departments of a single firm. In these days, when whole departments move between one professional firm and another, this is a highly relevant question. Groups that are shopping around have to decide which networks or ‘firms’ to join.
Or the question could apply to today’s “virtual” firms, where professional providers act in informal cooperation with each other over the internet without being legally bound.
Or it could be something in the middle: declared alliances without overlapping ownership.
In any of these cases, there follows the question: How do you tell whether the network is really adding value to its members (especially in comparison to belonging to other networks?
If you were looking for some possible metrics, here’s a few you might consider.
First of all, some metrics which attempt to judge the outcomes or results:
- Amount of referred work (as a percent of all revenues)
- Joint work (how many client projects involve teams simultaneously from more than one group or unit)
- Percent of clients served by more than one group / unit
- Percentage of joint proposals won
- Take top X clients and ask what percentage of the markets they operate in does the network do work for them (penetration percentage)
- Average rate (fee level) on joint work (network is adding value if joint work produces higher-than-average fee levels. If it produces less than average fee-levels, then more joint work by itself does not prove that network adds value)
- Average rate (fee level) on referred work (network is adding value if referred work produces higher-than-average fee levels. If it produces less than average fee-levels, then more referred work by itself does not prove that network adds value)
- Exchange of methodologies. (How many “tools” developed in one place are being used elsewhere?)
In addition to these measures of outcomes, you could also attempt to measure network effectiveness through metrics which judge “effort”
- Exchange of peopele among different groups
- Amount of joint proposals
- Amount of shared market research
- Amount of assistance on domestic proposals
- Amount of joint training
- How often is network expertise tapped into?
As I indicated at the beginning of this blogpost, this is an important topic even for single firms. Measures like these might allow the firm to judge its “cohesion” – the degree to which it is truly acting like one organization, rtahre than a bunch of separate operators trading under the same brand name.
Anyone got some additional and, especially, BETTER ideas?
post # 132 — July 13, 2006 — a Managing post
In a prior blogpost about getting feedback , Steve Farber (www.stevefarber.com ) pointed out that the willingness to seek out feedback on yourself takes a lot of guts. He then asked me if I thought you could teach “guts.”
By coincidence, on the same day, I received the following email from Jay Bertram, President of the Toronto office of TBWA, the global advertising agency. This is what Jay had to say:
I know you don’t remember me. I was at a seminar you put on last year. Like many, I was thoroughly moved by your passionate plea for senior management accountability. The difference is I actually did what you challenged all of us to do.
Maybe it’s because I’m Canadian and we do what we are told to do, but I took your challenge to heart and acted the first day I came back to my office.
I want to thank you for encouraging me to be a better manager. It is because of you that I am making a real difference for my employees. I have never been happier and more productive.
What Jay had done was to go back to his office and immediately ask all his people to evaluate their overall job satisfaction, their feelings about the office and (most critically) their overall rating of him as a leader. As I had recommended, he announced to all of his staff that, if he did not improve significantly in their rating of him as a leader, he would resign.
I telephoned Jay to thank him for his kind words, and to ask what it was that had given him the impetus to act. This is what he said:
It wasn’t that I learned anything new, but because of your bluntness and forcefulness, you made me act on what I realized I believed was the right thing to do – not what you believed was right, but what I believed was right. You helped me contemplate whether I really was acting in accordance with my own philosophies.
You challenged me to be prepared to be accountable. It struck home when you said that many people kept on lying -to others and to themselves – when they publicly proclaimed their commitment to standards of excellence or missions for their organization.
Mostly, you gave me the reassurance that living up to my standards, and being prepared to be accountable for them, was the right thing to do.
You’ll all gather that when I do seminars and presentations, I ask the organizers for permission to “not hold back.” I like being allowed to tell the truth as I see it, and invite the listener to face up to the “elephant in the room” (the truth that everyone knows but no-one has the courage to talk about.)
For better or for worse, this can be very provocative, confrontative and disruptive. (Not all of my clieents give me permission to take this approach.) But, as in Jay’s case, once in a while you get through to people by being dramatic, forceful and impassioned.
As I wrote about in Are You Abusive, Cynical or Exciting? and in Strategy and The Fat Smoker I understand those who are trying for self-improvement, and I understand those who choose not to try. What I don’t understand (and don’t think works) is to PRETEND to be trying for something without being willing to be held accountable for how well you are doing. I call it lying.
In my consulting and speaking over the years, I have tried various approaches to getting people to get on the self-improvement path by accepting this accountability (including feedback.)
Among the approaches I have used:
- Making them feel dissatisfied with their current situation
- Trying to paint a picture of the glamour of the future situation they could find themselves in
- Helping people see that significant improvement in their lot is actually possible, if only they are prepared to try a little and then keep it up
- Revealing the hypocrisy of the difference between their words and actions
- Giving people hope that, yes, it is real-world to operate in different ways
As Jay reports, the most effective way to get people to change, and to accept feedback, has proven to be to cause them (force them if necessary) to articulate what THEY really believe and then to get them to ponder, in the dark midnight of their soul, whether they are truly living up to their OWN standards.
post # 131 — July 12, 2006 — a General post
Starting today, I have added some new tools to help visitors find their way around my website.
My work tends to fall into four categories:
Strategy
Managing
Client Relations
Careers
However, not all visitors may be interested in everything I write about, so I have made it easier for each person to hone in on the topics that interest him or her.
On every page (except the home page) you’ll find an extra navigaton bar (in RED) that gives you the option to sort through my site by each of the four categories above. You’ll see listed (with links) all the articles, blog posts, podcasts and videos that I have on that subject.
The home page provides the same ability with the navigational tools in the center of the page instead of on the tool bar.
The search function (at the top right of each page) remains the same.
I hope these changes help you get more use out of my materials, and discover resources here about which you were perhaps not even aware.
Let me know what you think, and please make any other suggestions for improving both the content and the navigability of the site.
post # 130 — — a Strategy post
In a recent Financial times special study on innovation in law firms
, UK firm Slaughter and May (the UK’s most profitable law firm, I think) was commended for its innovative “best friends” strategy for serving its clients’ internatonal needs though partnering on a case-by-case basis with unaffiliated foreign firms – a policy it has ALWAYS had, for many decades now.
Unlike its major competitors which have merged, globalized, formed (and unformed) alliances, opened (and closed) offices, Slaughter and May have stuck to a policy of being a “premium unaligned firm”, working to be absolutely the best in their own domestic marketplace, and serving their international clients by teaming up with “best friends” firms in other jurisdictions on a case-by-case basis.
If you think about it, there’s something strange in being commended for an innovation which is defined as not changing – NOT making all the changes that your competitors made.
However, there’s a kind of logic to it, too. Slaughter & May has been incredibly successful, and is much respected. And not all of their competitors’ moves have panned out so well. In a recent article, I wrote about my concerns about geographic expansion strategies
In todays’ competitive landscape, it IS somewhat innovative to find a firm that achieved success by resisting the siren call of volume, geographic expansion and diversification and has clearly placed caliber of work -ie quality as it’s key strategic goal.
There’s something fascinating here. Maybe we worship change too much. Maybe there is something innovative about a firm that has stuck to its own philosophies and resisted the path that all its competitors have followed.
Anyone else got any thoughts on this?
