Passion, People and Principles
post # 99 — June 6, 2006 — a Strategy post
The first thing they teach you in any introductory economics course is that, in a free-market economy, price is set not by inherent value (water is more valuable than diamonds are) but by the relative balance of supply and demand.
As an individual or as a firm, you may be very skilled and talented at what you do, but if 100 other people in town can also do it, you won’t command a high income or be in great demand.
The essence of strategy, for people and organizations, is to find a way to be different. If you follow the beaten path, you will be beaten. Its not winning just to say you can do MORE than others. You need to be able to show thatwhat you have is faster, prettier, easy to use, lighter, heavier or more flexible.
A number of lessons flow from this simple insight. First, it needs to be stressed that the essence of strategy is that not about size, or number of locations or the range of your services. This should be obvious, but it’s astounding the number of businesses that define their success as “growth” and are prepared to do anything to achieve it.
In industry after industry, companies and firms continue to pursue volume strategies. They are always asking “How do we get MORE?” They don’t seem to spend anywhere near a much time asking “How do we get BETTER?” (In ways that matter to the customers?)
Of course, getting better is MUCH harder work than adding volume, locations, staff, service-lines, new products and new markets – so companies avoid doing it. It’s harder to invent metrics that show you are getting better – easier to show you are getting more.
Strategy is also the recognition that you don’t have to be great at everything. What you do have to do is to pick one or two things and do those better than anyone else and you’ll have enough for a lifetime of success.
Thomas Jefferson couldn’t give a speech well, couldn’t lead and never faught. But he could write better than any other man of his generation! His entire career before, during and after the Revolutionary War derived from that one talent.
Company or individual, your challenge is to find your angle. What can you make yourself truly special at?
And when others start copying your success, what’s your Act 2 going to be?
post # 98 — June 5, 2006 — a Careers post
As you plan your week, month, year and the rest of your life, why not take a few moments out to reflect on how well you’re doing on these things?
Rate yourself on the following skills/attributes, using the following scale:
1 = This is something I really need to improve:
2 = I am less strong at this compared to the typical professional at my level;
3 = I am about as good at this as the typical professional at my level;
4 = I am a little bit better at this than the typical professional at my level;
5 = This is a particular strength of mine
- The caliber of work I’m involved in
- The strength of my external relationships (with clients)
- The strength of my relationships with my superior(s)
- The strength of my relationships with my colleagues
- The strength of my relationships with my family
- The new skills I have developed in the past two years
- My current mood
- My current energy level
- My ability to set priorities well, so I do what’s important, not what’s urgent
- Ability to be decisive, i.e. make decisions with limited information
- Ability to avoid jumping to conclusions too quickly
- Ability to win people’s trust and confidence
- Ability to get others to treat me like a member of their team
- Ability to persuade and convince, rather than to assert conclusions
- Ability to convey “bad” news to people in a way that they find acceptable
- Being good at delegating to others what does not really require my talents
- Confront and deal with underperformance in those who work for me – tackle issues, rather than avoid them
- Listen well to what people have to say before reacting
- Show an interest in people beyond the specifics of the tasks that require you to deal with them
- Deal with problems in my relationships openly and quickly
- Demonstrate energy, drive, ambition
Any patterns to your answers? Does it make you want to do anything differently this week?
post # 97 — June 4, 2006 — a Careers, Managing post
If you were in charge of recruiting and selecting entry-level people (say, people in their early 20s) what criteria would you use in prediciting future success not just as a skilled technician, but as someone who would be likely to succeed in becoming (eventually) an effective manager or leader in the business?
Based on what I’ve seen , here’s what I’d look for: Someone with…
- A modest background – not extreme poverty or riches. – Someone who had had to create their own success – a self-made man or woman, with above-average energy, drive and ambition
- A character that shines through regardless of the role they are playing, as illustrated by references from past clients, subordinates, colleagues, superiors and friends. I’d want to know if everybody (from every direction) said the same thing about the person’s character.
- A track record of having a hunger for responsibility, already demonstrated in volunteering for leadership roles in extracurricular activities Consistent high-rated scores from the beginning, not just as they approached final exams or the end of school.
- Some evidence that they are driven by a restless curiosity, seeking variety, showing the initiative to eagerly taking risks with their careers. I’d worry about someone who had been too focused, or followed too logical a path.
- A history of long, strong, stable personal relationships.
- A desire to accomplish something that they can describe interms other than money, treating riches as the outcome of achieving their success, not as the definition of it.
Anyone agree? Disagree?
Do you think you could spot these things in a young person in the typical recruiting interview process? If not, how would you go about finding out about them?
(Would the criteria change if you were recruiting mid-career lateral hires – say, people in the 30s, 40s or 50s?
post # 96 — June 2, 2006 — a Managing post
Adam Smith discusses whether or not a firm made up of partners (ie owners) should disclose to everyone what each partner is paid.
I believe it is almost always misleading to do this, and often injurious.
It is relatively easy to disclose what each person has been paid – it’s not so easy to disclose all the factors (quantitative and qualitative) that were taken into account in arriving at the compensation decision. As a result, people are inevitably left to speculate (and inevitably misinterpret) WHY individual A got less than individual B.
This ambiguity becomes particularly invidious when the compensation setting group has (appropriately) taken into account some very personal factor that may have influenced performance, but which it would be entirely inappropriate to disclose openly.
As I discussed in Managing the Professional Service Firm (my 1993 book), it is meaningful for the compensation-setting group to disclose and discuss patterns and trends in compensation, but individual results will always be literally “meaning-less” without knowing the reasons for the decisions. It may be symbolically or legally necessary in some firms because of the partners’ ownership status, but that doesn’t make it of any constructive value.
post # 95 — — a Careers post
Another post from the archives. This question was originally posed in October, 2002, but I still get asked it again and again.
You have created what I believe is a high level of credibility and a brand. Have you ever been tempted to become David Maister and Associates? What factors would you consider in making this type of decision?
My (updated) reply is this: I am defiantly solo, and have never been tempted to build a firm. This has nothing to do with any business theory, but is just a reflection of my tastes and (eccentric?) personality.
If there’s a general theory behind it, it’s simply that you must know and accept yourself and try to arrange your life around what you want to do and what your goals are, never accepting other people’s views on what you “should” do.
I believe the goal of life is to maximize happiness and fulfilment as you yourself define it it.
You must never accept other people’s definition of success or happiness. There are too many ways to live life, and you’re allowed (maybe even required) to choose your own, without living up to other people’s views and beliefs. Assuming, of course, that you’re prepared to accept the consequences of what you have chosen.
My primary goal has never been to maximize income or net worth – it’s not my definition of happiness. So, building a firm to get rich never appealed.
Actually, building a firm at all never appealed. The legacy I wanted (and still want) to leave was not an institution, but to be remembered as someone who, as an author, made a difference by contributing sensible ideas clearly expressed; and, as a consultant, helped other people achieve more of their goals.
I understand and admire, tremendously, those who have built firms: many are my clients, and I am in awe of what the best among them have accomplished in creating firms.
But I don’t want to do what they do. I understand enough about what it takes to be an effective manager to know that I don’t want to spend my days doing it. I’ve seen enough partnerships in twenty years to know that partnership is not for me.
I LOVE the freedom that comes from having no colleagues, no bosses, no subordinates. I can and do collaborate (8 of the 12 books I have written, including those done in academia, were coauthored, joint projects.) But I love the freedom of choosing when I want to collaborate and when I don’t.
If all that means that I have to work a little harder and shoulder the full, personal responsibility for building my reputation and creating my own individual success, well, that’s fine with me.
I don’t say it’s right for others, just that it’s a perfect fit with who I am. And, done right, it pays well enough to keep my wife and I more than contented! (English understatement.)
Here’s the challenge for each of you out there: are you enthusiastically, deliriously, delightfully pleased with the career choices you made? Are you doing what YOU wanted and chose? I hope so!
post # 94 — June 1, 2006 — a Strategy post
Run, don’t walk, to read Brian Sommers ‘ analysis.
Confession time: I’ve been very busy this week, and did not prepare (as I sometimes do) a week’s worth of blogs in advance.
So, for today, I thought I’d dig into my past files and see what was there that might still be current and of interest to all you kind folks who are tuning in.
Here’s a question that was posed to me (on my website) in May 2003:
David, one of my clients’ has become accustomed to operating in crisis mode. They are constantly in reactive mode vs. proactive. I have not been asked to help fix this, my firm is involved in other projects. However, I feel like I am watching a train crash about to happen. How can I get them to see that reactive mode and crisis is not a normal way of conducting business, when they have not asked for help? Thanks.
Here’s the reply (slightly modified) that I gave three years ago:
I don’t completely accept your premise that a “reactive mode and crisis is not a normal way of conducting business.” It may not be a good idea, but it IS remarkably common.
But let’s address your question: One of my rules is that you shouldn’t give your opinion until it’s asked for – it will just be resented (spouses and best friends, take note!) First, you must build a relationship and earn the right to comment.
Next, remember that there’s no point commenting to someone who isn’t empowered to change things. So, you must ask “If they were to change this mode of operating, who would have to lead that change? Who is the key decision-maker here?”
Even when you figure out who that person is, you must tread carefully. Imagine this: you observe that this person in your social circle that you’ve met (not a close friend) is overweight and unfit. You think it’s not healthy to live that way. They haven’t asked your opinion. But you want them to understand that there’s a better way. How would you approach THAT???
I’d almost certainly try to find an INFORMAL occasion (out of the office, over a drink?) to do this. If it’s going to work, it’s only going to do so when it’s human-to-human, not when it’s “consultant” to “client.”
You’ll probably have to guess that you are not the first person to point out to them that they are fat and unfit (and ugly, as well!) They’ve heard it before, in all probability.
So what’s going to be different about your approach? It’s important to remember that it won’t be the logic of your argument that will prevail. (Let me really PROVE to you that you are fat, unfit and ugly!)
Whatever the process is will mostly be about learning to influence people’s emotions: creating the DESIRE for the benefits that fitness can bring, helping boost their confidence and courage that, the self-belief that, yes, they CAN change. You must be skilled in quelling their fears about dropping their past habits.
Since you will be dealing with an organization and not just an individual, you must also be very astute in understanding the group psychodynamics that led them to operate the way they do now. There’s probably a reason – not a good one, I grant you, but a reason nevertheless. There’s always a history that you need to take the time to figure out if you are going to help them break free from it.
You’ll need to be a skilled counselor, psychotherapist and corporate politician to pull all this off. I don’t claim to be immensely skilled at it myself. In part, I (co)wrote the book Trusted Advisor so that I could force myself to think all this through. And understanding whta you shuld do doesn’t always mean you have the rescence of mind or the self-control to do it and say it the way you know you should.
Helping others ain’t easy.
Good luck! Let me know how it goes!
I have just added to my audio page an interview with me on Eric Mattson’s MarketingMonger podcast series about the challenges facing businesses today and the principles that define successful business and managers.
One of the key messages I passed on was that the elements of good management often sound like “moral” points – you “should” care about clients and customers and you “should” act as if you cared about whether your employees are engaged and enthused. In the past, I used to apologize for this and say “it’s not a moral point, it just works in business!”
But then I made an interesting discovery. If you think something is a moral point, you’ll just implement and execute it better – and thereby get the business benefits faster and more extensively.
It turns out that there is nothing so powerful in business as actually having some principles that you actually hold on to passionately and require those around you to believe.
I further explore the ideas Eric and I discussed in these articles:
(You can receive all of my future articles directly by subscribing to my free article newsletter.)
Thanks to Eric for the enjoyable interview. Best wishes to him on the remaining 968 interviews in his 1000 podcast series.
By the way, folks – does your experience match mine?
Do people who actually believe things and have a personal morality about how business should be conducted actually attract like-minded people and build more successful institutions?
What about the opposite? Can you be a “pragmatic skeptic” and still build a thriving, financially successful business?
As part of leading discussions on the keys to great business relationships, I often ask seminar participants what they think the keys to great relationships are in personal life.
Frequently, someone will say “Compromise” and I think this is dead wrong. Compromise means neither party gets what they want, and both sides end up unhappy.
Instead, the secret is “Take Turns!”
Some of the time, the focus is on one person, fulfilling their needs, and some of the time the focus is on the other person. This way, both sides experience the other party wholeheartedly paying attention to them, and doing things that they want.
The principle applies to business. Employees know that most of the time, the organization is going to be run for the benefit of the owners and the bosses. But if occasionally, just occasionally, the employees needs become front and center and receive true attention, the commitment to the relationship is strengthened.
Don’t pretend that my interests are always taken into account in your decisions – I know they are not. Don’t attempt to make small token gestures, giving me unsatisfying, tiny pieces of what I want.
Periodically, make me the focus and give me a major part of your attention – and I’ll hang in there through the rough spots of our relationship.
Taking turns doesn’t have to be an even-handed 50-50 proposition. I just need to know that you can be fair, equitable and just, and recognize that we both have to contribute to make this relationship work. And you do that when *I* get to be front-and-center. It’s not ALWAYS about what you want.
post # 90 — May 27, 2006 — a Managing, Strategy post
Among the most frequent consulting questions I receive is how, amid a scarcity of young knowledge workers, junior staff can be attracted, motivated and retained.
My clients also want to know how to justify and pay for the increasingly ridiculous salaries that these young people can command. As one example, young people straight out of law school in the US are being paid more than $140,000 per year!
Similar ridiculous numbers are showing up in a multitude of industries and countries across the world. Ask some Indian parents how they view the incomes their 20-something children can earn in the outsourcing factories of Mumbai!
My clients insist that there is a new “Millenial” generation with different attitudes – that “they” are different than we were (or are.)
I think this is wrong. Because of differences in the supply / demand balance, younger people today may have more opportunities than baby-boomers like me (or like Generation X, Y or Z. or whatever) but the realities of building a career remain the same.
What a young person needs (in addition to a good paycheck) – in fact what he or she MUST have – is the opportunity to work on stretching, challenging interesting things – the chance to build skills.
Without this, they can not develop themselves and have a career – they will be stuck in low added-value jobs. For someone who has not yet “made it”, learning and growing is not a “nice-to-have” – it’s critical.
If they are not learning new things, they HAVE to move on in order to have a career and get somewhere with their work lives.
So, there’s a very simple secret to solve the twin dilemma of how to both hold on to mobile young people AND to justify their ever-escalating salaries. It is this – make sure that they are put to their highest and best use.
To do this requires that the organization has no “underdelegation” – work currently being done by a more senior person that could be done by the more junior person. It means that companies must outperform their competitors in establishing procedures, processes, templates, forms, databanks, knowledge systems and a multitude of other tools to ensure that the (expensive) junior talent can be economically justified by producing ever-increasing high-value output.
Companies that do this find that everybody wins – the juniors get fulfilling, developmental careers that provide opportunities to learn that they could not get elsewhere; the product or service that the company makes is produced more efficiently than when it is made by higher-priced people. Some of the savings can be passed on to the customers or clients in the form of lower prices or fees, while some can be retained as company profits. And the time of the more senior people is freed up to invest in and pursue higher-value opportunities that will keep the organization competitive.
Ah, but THERE’s the problem for many firms and companies. To achieve this nirvana, the senior people must be willing to give up the comfort of holding on to the work they are already responsible for, and be willing to prove that a younger person could do what they have worked for so long to be able to handle!
In many places, this “delegation” solution is virtually impossible to achieve because the existing, senior people are afraid to expose themselves in this way. And company measurement systems that evaluate senior people on how busy they are only serve to reinforce this bad behavior.
This syndrome is not new. I first wrote about it in chapter 2 of MANAGING THE PROFESSIONAL FIRM in 1993. Kids today may be expensive and have an attitude problem, but wise management practices to deal with them remain the same as they always were.
