Category Archives: Business Strategy

Thoughts on Relevance, Change Management and Effective Leadership

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In the industry where I work, a recurring theme is the application of change management, and how frequently it appears more difficult to make a best decision, versus being hamstrung by paralysis and resistance to moving forward. It might be tempting at times to think resolution is simply not possible. In other words, that things can’t change or will occur so slowly it won’t matter. But I don’t believe this, and I refuse to give in to this kind of cynicism that is right out of the Peter Principle. It is possible to be fresh, relevant, effective, adaptive to change and full of life at nearly any age, or stage of career, if the mental and physical health are present to do so. I am writing this as someone who is not a young person and I am more convinced of it than ever. Deficiencies or strengths in these areas are really matter of one’s determination to stay engaged and current (for whatever purpose or specialization) through continuous learning, then apply the mental energy to implement such things. Resistance to change can also be equally present in the young. We tend to miss this observation because frequently, age often compounds the problem of resistance to change, so we automatically conclude that one presupposes the other. But this too is simply not the case. A person can be narrow minded and adverse to innovation, technology, improvement and change at any age. This is a critical point of understanding for leaders since it is people who make up the team, and they are the leverage to accomplish anything.

In The New Leader’s 100-Day Action Plan, the authors discuss the importance of  the “vision of building tactical capacity in a team” – that is, the ability to span between vision and execution, and the need for building loyalty, trust, and commitment. Tactical capacity is a tremendous discussion in itself, but I will limit the quote to a short, but excellent imperative for leadership,

[Tactical] capacity — this flexibility, energy, and skill — comes first from leadership. Your goal as a leader is to build it in each and every team member. This kind of leadership is far from intuitive. And the lack of it, in the end, is a fatal stumbling block for many leaders of new ventures. The entire process needs to be driven by an awareness of the kind of leadership that ensures success in the challenging circumstances of a transition.

This is great advice for accelerating a transition, but is is also guiding principle for ongoing process innovation of any kind. This will sometimes involve hiring and fully utilizing managers who are more skilled at given aspects of leadership and/or various areas of expertise than they are. Focusing on transformation and inspiration, and not being afraid of these skill sets, even if the senior manager does not fully understand them is key to personal and organizational success. Frequently though, there is a fear of competence, or what is simply a stylistic difference, which is rooted in human nature. The motivation could be jealousy, fear of being upstaged or even replaced. But the opposite should actually be true. If a senior leader has enough vision to identify the right talent, managing and implementing such people should only strengthen their position of leadership and produce the very best results for the organization. That is an expression of effective leadership.

Binge Viewing on the Rise

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A recent article in the Wall Street Journal reveals that, “Netflix is trying to better understand your binge-viewing habits.” Why? Because what was once thought to be an extreme lack of self-control, ranging to an aberrant use of time has now gone mainstream…and the company is even telling you you should not feel guilty about it! Or, for those among us who are seeking to justify such a use of time, Netflix says Americans are even willing to exercise while binging.

A phenomenon that is reshaping TV culture—viewers devouring shows in lengthy chunks, episode after episode. Executives say they found a strikingly consistent pattern in the pace at which people binge: In general, about half the viewers studied finished a season (up to 22 episodes) within one week.

According to the company’s news release,

“Our viewing data shows that the majority of streamers would actually prefer to have a whole season of a show available to watch at their own pace,” said Ted Sarandos, Chief Content Officer of Netflix.  “Netflix has pioneered audience choice in programming and has helped free consumers from the limitations of linear television. Our own original series are created for multi-episodic viewing, lining up the content with new norms of viewer control for the first time.”

But why does this matter? It is not something so simple as being the first to market, but rather, a continued response to demand that keeps them in the position of market maker for streaming. Will we see a tiered approach to pricing structure? I don’t see how they can’t and there already seems to be evidence of this, but that is simply an appropriate response to continue its availability, and or desire to have it all.

References:

Netflix Says Binge Viewing is No ‘House of Cards’

Netflix Declares Binge Watching is the New Normal

Netflix Finds More Than Half of Americans Willing To Trade Their Couches For Treadmills When Binge Watching In 2014

Netflix Knocks a Dollar Off Its SD Streaming Service for New Users

Innovation and Finance – Making the Connection

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A number of white papers on the topics of service and operational innovation have caught my attention, and I wrote an overview of one recently here. While many of the ideas regarding innovation are similar, the number of perspectives and expanded applications to operational innovation is impressive. As a proposed subspecies of organizational innovation, operational innovation has particular application for accounting and finance. And as such, it seems natural that information technology functions (up to a certain sized organization) commonly fall within the scope of the chief financial officer within the organizational structure. Why does this matter? Because what begins with a mindset toward innovation often requires the necessary bandwidth made available through technology.

In other words, technology in and of itself is NOT the answer. I cannot count the number of times I have seen an expensive system that was purchased in the absence of an organizational mindset that embraces and encourages innovation, and the inevitable happens: it lies dormant or is abandoned altogether. This is a particular shame because not only are resources wasted in the process, but it reinforces the mindset of those who are looking for an example of failure in order to resist change, as if change were being implemented for the sake of itself, rather than a desperately needed implementation that will move an organization forward. So the process begins with a mindset that permeates an organization, encouraging a culture of continuous learning. Although this is a simple and straightforward concept, it is far more complicated to create within an organization (of any type) than to plan.

But once this mindset is in place, or even moving in that direction through leadership or a core group of people, the possibilities for process innovation as it relates to service delivery are tremendous. In an article in Strategic Finance titled, Innovation is for CFOs, Too, the authors Davila, Epstein and Shelton suggest an integral connection to financial operations, organizational innovation and technology,

The accounting and finance functions are an important place to start. Although accounting has changed incrementally over time, we’re grounded in a model that was developed 500 years ago, and we still use that same basic model. That’s okay. The development of information technologies has changed the way we process transactions—and the speed—but the basic model hasn’t changed. Yet approaches to financing organizations and managing cash have changed dramatically over the years. Maybe most important, the role of the CFO has been totally expanded in the last decade or two. Although regulations in accounting and finance constrain some innovation in the corporate finance function, there’s still so much that can be done.

Further discussion of the “much [more] that can be done” will be in a subsequent post discussing this article, which can be downloaded from IMA here.

Institutional Innovation: White Paper Overview

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For more than two decades now we have been trying to adjust, sometimes unsuccessfully to a changed market place that in many respects does not reflect its predecessor, The Industrial Era. Some have labeled our present time the Social Era, which is a sociological outworking of a surge forward in the information age, a service based economy and global business. The dilemma for many organizations is that what worked in the past era is failing to get traction mainly due to an inability to adapt and respond in a timely manner and this results in negative effects on earnings, cost containment and an inability to innovate. This holds true in the sectors of non-profit, for profit, governments and virtually any other organizational type. Authors John Hagel and John Brown with Deloitte Center for the Edge have written a white paper, Institutional Innovation, Creating Smarter Organizations to Scale Learning that addresses a contrast between these two epochs of economic history with a focus on the historic benefits of “scalable efficiency” (benefits of economies of scale) and a new and requisite organizational characteristic, “scalable learning.”

A compelling hook at the very beginning of the paper describes the organizational structure that seeks to govern scalable efficiency: command and control. To the average person who has read any degree of managerial trends in the last decade (or two), the very term, command and control bristles against almost anything considered effective in our present time. When I say effective, I don’t mean can it exist or can you get away with it. What I mean is, does such a structure really translate into organizational value and draw out the best in people, or does it cause people to become professionals at observing the boss, and avoiding them accordingly? The upside of this structure is that it puts systems in place (assuming managerial competence) that create predictability, which worked out well when social, political and economic trends changed more slowly. The problem is, this is no longer the case. The compelling resolution that the authors suggest is “a new rationale of ‘scalable learning’.” The result, they argue (with examples), is that smarter organizations actually benefit from radical and essential change, rather than be harmed by it. The key to this is “increased learning and adaptability” that will result in coveted product and process innovations through the advent of “creation spaces,” which is not a new concept, but may be better suited than ever for addressing the future challenges of organizations of all types. Get your copy of this excellent paper here, or if you would like a quick reference copy with highlights and a note or two, drop me an email.

Reference:

Hagel, J. III & Brown, J. Institutional innovation: Creating smarter organizations to scale learning. http://dupress.com/articles/institutional-innovation/

The Shelf Life of Innovation

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For a visionary, a perfectionist, an idealist or someone who is driven by simply tying to get things right organizationally, there is a great deal of satisfaction in driving innovation whether it be product, process or service. But just about everything we work with was once an innovation. Everything was new once. It is not enough to fix something, and then create a monument to it in the form of a process that soon becomes dated and ineffective. Or worse, protect that monument rather than allow the present order to be disrupted with ideas that we may not quite understand. What needs to happen is outlined in The Case for Institutional Innovation,

In today’s environment of exponential technology change and market uncertainty, institutions that can drive accelerated learning will be more likely to create significant economic value on a sustainable basis… As institutions are rearchitected to take advantage of rapidly evolving technology infrastructures to scale learning, they can become more adept at generating richer innovations at other levels, including products, services, business models, and management systems.

This goes for every type of organization, including governments. This is perhaps especially true for smaller governmental entities even though such organizations are being challenged due to overall economic trends and possibly, long-term shifts in revenue. However, due to their manageable size, the above stated innovational trends are entirely possible if such an organization adopts and aggressively implements a philosophy of learning from top to bottom. This can be largely implemented through scaled learning, rather than simply turning to economy of scale. It does not necessarily have to be a choice between the two, scaled learning can take place in any context, and it does not require of formal system in place. This is the nature of a learning organization and the characteristic that emerges within an organizational culture that leverages learning opportunities. And it begins with leadership and willpower.

Reference:

Hagel, J. III & Brown, J. Institutional innovation: Creating smarter organizations to scale learning. http://dupress.com/articles/institutional-innovation/

Strategy: The Outworking of an Extraordinary Vision

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Successful business strategy is the outworking of vision, extraordinary vision. Ken Blanchard has summed up the issue well in his classic anthological work, Leading at a Higher Level: The biggest impediment blocking most managers from being great leaders is the … Continue reading →