The Five Default Corporate Cultures

Years ago I worked in a firm that had no culture. At least that is how I viewed it at the time. It was the middle of a .com boom and magazines like Wired and Business 2.0 talked incessantly about cultures of innovation, cultures of creativity, the culture of the new economy, etc. It was all good, and no one was talking about the darker side of corporate culture. Now the older, wiser me recognizes that in the void of intentional leadership I was experiencing a "default" culture.

A few days ago I was listening to Greg Kyte and Jason Blumer talk about an HBR article on corporate corporate culture. Just like my days at that old firm, most of the talk was about good culture. Then Greg said something about "default" culture that brought me back to those days in my old job. In the absence of focused, intentional effort to build a positive culture a different culture will develop, a default culture. It is my opinion that there are a handful of default cultures. Like weeds, they crop up when no one is trying to cultivate something better.

Working for the weekend

Uploaded by Joao ANJOSIRO on 2013-07-23.

This probably describes the culture most employees experience. Work is something to be endured. Management provides a paycheck for which the employees should be grateful. That check can only be enjoyed when not at work. And, by god, if you want me to stay late it better come with overtime or comp time. If you wonder if you have this kind of culture just count how many times you hear the words "hump day" on Wednesday morning.

It wasn't me

Uploaded by Williams Wilmart on 2011-12-10.

if you have ever had a colleague tell you more than once "I know I sent it, check your spam folder," you might be living in this kind of culture. It is full of excuses, and the only thing that most people care about this avoiding blame. The problem is that nothing can ever get accomplished. The entire organization is only concerned about the status quo while maintaining anonymity by "flying below the radar." These cultures feel more like a high school study hall period than a place where meaningful work gets done.

Cults of personality

Music video by Living Colour performing Cult Of Personality. (C) 1988 SONY BMG MUSIC ENTERTAINMENT

in this culture the company goes as the boss goes. If the boss is having a bad day the company is having a bad day. Employees are subjected to equal parts narcissism and schizophrenia. They learn the most effective ways to manipulate the boss while trying not to be labeled a brown noser by their colleagues. This culture seems to be particularly popular in the "nameplate" professions of law and accounting.

Money money money moneeeeey

Classic from the great o'jays

In this culture advancement is the name of the game. Everyone is keenly aware of titles. The guidelines for advancement are the most dog eared sections of the employee manual. Taking credit is a varsity sport while giving credit is a sign of weakness. Turnover is steep and choice assignments are doled out like political favors. In my .com days our President came from P&G. As we moved into a new office building I caught him counting the ceiling tiles in each office to compare square footage before he assigned them based on titles. That's all he knew from the culture he'd grown up in. 

I Don't Wanna Love Somebody Else

This was incredible!

These are some of the most pathetic and life draining places to work. The employees feel sorry for the owner's predicament while the owner takes advantage of the employee's charity. Opportunities to advance are nonexistent because the company itself is going nowhere. Self-esteem is low and clients are mediocre. The only thing missing is a going out of business sale.

If you recognize one of these cultures in your company there is good news. You can change it. It is hard, long, tedious work. But it can be done. Realize that many of the employees are as addicted to the culture as you are, even though they hate it. Some of them will not be able to make the change, and you will have to part ways. In almost every instance the culture is going to require some outside help. The first step is calling out the culture you have and deciding to make a change.  Commit to it, invest in it, and don't settle for a default existence.

Three Rules for Scheduling a Virtual Meeting

Things that are technically possible are not always practically feasible. When I was a kid it was technically possible for me to build an electric door lock out of Legos. However, it was practically impossible since my sister would not stop kicking the door open long enough for me to complete it. I have experienced something similar in the virtual meeting space.

The technology for virtual meetings has been around for a long time. Today every computer, laptop, tablet and smart phone has the ability to host and attend a virtual meeting. But the natural inclination of 2 people who need to get together is to calculate time and distance in an effort to find a place and time to meet in person. In my work with companies few things hold the promise and allure of the virtual meeting. With only 24 hours in a day anything that can shorten the commute and cut to the chase is welcome.

After leaving a recent appointment I thought "why in the world didn't we do this on the computer?" Just the day before one of my clients had saved me over two hours by suggesting that we meet on the phone instead of in person. So I asked "when is virtual at least as good as face-to-face?" Below are three criteria to help you determine when to go virtual and went to stay at your desk or computer.

One-on-one
One-on-one meetings are ideal virtual candidates. With an audience of one there is plenty of time for everyone to be heard. There is also less opportunity for you to miss the ample nonverbal communication that occurs in group settings. We have all been on conference calls with 10 or more attendees. These virtual meetings are troublesome because it is impossible for the speaker to interact with the attendees. When speaking the leader is quite literally broadcasting to a captive audience. Then the floor is relinquished to the next speaker. There is no ability to gauge how attendees are receiving the feedback of their colleagues because almost all nonverbal communications is whiped out in a virtual setting. Without productive dialogue meeting attendees usually look back in hindsight and wish someone had just sent an email.

By contrast, one-on-one conversations have been happening on business phones for decades. We may prefer face-to-face encounters for particularly sensitive conversations, but most of the time the phone or computer is just fine. Groups of three can also usually be accommodated virtually as long as there is a clear intent behind the meeting. And that leads to the next point.

Simple agenda
If the agenda is easily defined and everyone understands the focus of the meeting ahead of time it is a good virtual candidate. This doesn't mean that the topic is simplistic or that the material to be covered is easily dealt with. But it does imply that the material is straightforward. For example, a meeting about a key employee's lack of performance is a good opportunity to skip the travel and meet virtually. But a meeting to brainstorm organizational chart changes is probably better handled in person. The difference between these two scenarios is that in the first case the agenda is well known and all the issues are easily disclosed in premeeting preparation materials. But in the second scenario we don't quite know what all of the issues are. Part of the purpose of the meeting is to uncover things we don't know yet.

In person meetings are also preferable when understanding the personality of the other person is a large part of the agenda. This is one of the reasons sales are often more effective in person while customer service is almost always done on the phone. The decision to buy can be emotional and intense with all kinds of "why" questions. But customer support is all about the "what" of diagnosing and solving problems.

I was recently interviewing the son of a company founder over the phone. After an hour discussing the dynamics of his relationship with his dad I recommended that we fly him down for a face-to-face meeting before proceeding any further. There are some things that are communicated more readily through nonverbal communication and you need to see those things in person to hear them. In my work those types of conversations only account for about 20% of my meetings. The other 80% fall under the category of simple agendas and known issues that can be tackled virtually.

Short duration
The last point is probably the easiest to evaluate. If the meeting can be concluded in less than an hour it is a good candidate to go virtual. Sometimes 90 minutes is an acceptable threshold. Why? Because everything happens faster in a virtual world. When a blind person is deprived of their sight hearing becomes much more acute. It's the same with meetings. When you remove all of the extraneous stimuli surrounding a face-to-face meeting the focus is narrowed to the issues at hand and things progress more quickly. If you factor out the small talk and the stalling to stretch a meeting to its scheduled end time most substantive issues can be handled in about 20 to 30 minutes.

The other thing that you need to consider is that your audience on the other end of the phone or computer terminal is unencumbered from any obligation to give you 100% of their attention. The moment that the intensity of your discussion lets up they will be checking email, walking around the shop floor, or digging through their inbox. We will put up with idleness in face-to-face meetings that we will never tolerate on the phone. There is a drivenness in the virtual world that recognizes the many competing interests for your colleague's attention. Use that focus to your advantage and accomplish more in less time. If you need an hour in person do not be surprised if 20 minutes into the call you are wrapping things up.

Face-to-face meetings will always be the desire of salesman and employees asking for a raise. But when you are dealing with a small audience, with easily defined issues, and a fairly predictable time window reach for the virtual venue first. I think everyone will be thankful for the change of scenery.

The Three Technology Gaps that are Killing Your Growth

When companies want us to help them put together a strategic plan there are several areas we examine to see if they are ready. One of the biggest is technology. Today the effective use of technology is a table stake in the game of business growth. There are three areas I am primarily concerned with when evaluating a prospective client's use of technology.

First, and most important is the condition of systems used to measure what is happening in the business. This includes accounting systems and the related pieces used for reporting. A good strategic plan has benchmarks and milestones that can be used to measure progress. But if there is no system to capture the information, and no understandable way to report it we won't know whether the plan is working or not.

You can grade measurement systems on an A to F scale just by understanding the two ends of the spectrum.

A - Give yourself an A if all of the following apply. Multiple users can access the system simultaneously. Reporting is easy to access and is engaging enough to be accessed daily or weekly by team members. Records are kept up to date and periods are closed within one week.

F - You fail if only one person has access, reports must be requisitioned, and the monthly close takes longer than three weeks.

The second area to focus on is the the technology used to collaborate with colleagues. These systems include network environments, mobile access, tools used to collaborate with vendors and partners, and how the organization as a whole keeps up with where it is and where it is going. The reason these systems are critical to strategic planning and execution is because growth usually requires leveraging partners and resources that are not inside your four walls. How can you work with a marketing company to acquire real time customer feedback if they have to wait for you to pull a report every time you want them to contact customers? How can your accountant update key KPI's without real time access to the accounting system?

An A-F scale for collaboration technologies might look something like this:

A - Give yourself an A if you can work collaboratively with users inside or outside your domain and physical presence is not a prerequisite for productivity.

F - You fail if your response is "We have email, what else do we need?"

The last area is the technology used to engage customers. This includes CRM systems, web presence, online portals that allow the automated creation of customer tickets, contact forms, e-commerce platforms and the dead horse of social media. All of these are important to strategy because growth and sustainability requires customers. The more intimate and integrated the relationship between a firm and its customers the more successful it will be in keeping those customers as it makes strategic changes to grow the business.

A - Give yourself an A if you can poll electronic records for a detailed profile of your customers including such things as purchase history, number and substance of interactions with the company, resolution of problems in the past and probable future purchases.

F - You fail if customer information is not kept up to date and readily accessible.

If you grade consistently below a B average there might be some housekeeping that needs to take place before you can put together and execute a strategic plan for growth. If you are deficient in just one area it is likely that any growth plan you put together will focus on that area as a key strategy in achieving your goals.

Five Questions to Ask Before You Start Your Strategic Plan

A company's prior experience with strategic planning is an important piece of assessing their readiness to become a strategic planning client. The most basic question that can be asked is whether the company has any prior strategic planning experience or not.

Strategic planning is as much art as science. If the company hasn't been through the exercise before it will take some time to educate the leaders. Chances are some of them have been through something like strategic planning in a prior life at another company. There may be some residue from lackluster prior experiences. Or, we might be able to start with a clean slate, without having to deal with the baggage of past failures.

The basic premise is that it doesn't matter whether a company has experience or not. Those with and those without experience can be equally successful in constructing and executing their next strategic plan. But knowing what experiences they've had will help us go about the planning process in a way that makes it more relevant and ultimately more successful.

If a company doesn't have any prior experience there are a few things I'd like to know.

1. Has the company ever set goals that were shared with every employee?
2. Have they celebrated a success together such as hitting a sales target or staying "accident free" for a record number of days?
3. Do they write things down? Are team members held accountable to written plans? Are sales quotas tracked month after month? Are meetings run with an agenda and are followup items sent out to attendees after the meeting?
4. What happened the last time someone was held accountable? Was it messy and confrontational or orderly and constructive?
5. Are team decisions usually based on numbers and data or does the team usually talk about perceptions and base arguments on anecdotes?

If a company does have prior experience with strategic planning here is how I would expect those questions to be answered.

• Yes, when we did planning before every employee received a very summarized copy of the plan that showed how their job or department was expected to contribute.
• Yes, we have celebrated both big and small things in the past. And people knew those celebrations were coming because we talked about the goal and tracked progress until we crossed the finish line.
• Someone is always taking notes when we make decisions and those notes conclude with action items. When we get back together we make sure the action items from our last meeting were completed. We also don't expect people to show up at meetings without an agenda.
• The last time we held someone accountable they weren't surprised by the conversation. They pretty much knew they had been coming up short and we were able to constructively talk about suggestions for getting things back on track.
• We like to see numbers. We know they aren't everything, but seeing them helps us understand if the stories we are hearing are systemic. Sometimes we hear things or "feel" a certain way, but the data just doesn't bear it out and we can see where emotion is getting the better of us. At other times we see things in the numbers that cause us to go out and solicit stories so we understand what is driving the data. It's a two way street.

Just to be clear, we almost never see all of these answers in one company. Sometimes companies are very data focused but horrible at holding people accountable. Sometimes they are great at throwing celebrations but terrible at communicating how the celebration fits into what the company is trying to achieve long term. But we also run into companies that haven't done strategic planning before that have very good answers to these questions.

The point is this, the questions are the same regardless of the company's experience level with strategic planning. The answers tell us whether the basic disciplines and tools are in place to make planning worthwhile. There is generally a good bit of housekeeping that needs to be done to insure that planning on a company-wide scale has a good chance of success. Smart questions are a good place to start.

Is Your Company Ready for a Strategic Plan?

I was talking with a new acquaintance this week and we were discussing whether or not he should start his own business. We discussed things like his dissatisfaction with the current situation, the steps that would be required to open his own shop, support from family members, how to keep work in check when it comes to a healthy marriage, and about half a dozen other things. In short, we talked a lot about his readiness to step out on his own.

Readiness is a very useful concept in business. It speaks to a combination of competency, timing, resource availability and mindset. It applies to all kinds of areas, but in my work I am most interested in a company's readiness for strategic planning. I spend a lot of time in due diligence trying to assess that readiness before I allow anyone to become a new client. So for the next several weeks I am going to break down the various components of strategic readiness. And I will start with the company as a whole. What companies are good candidates for strategic planning?

Company Size

The companies that we work with are typically between $2-20 million in revenue. There are several good reasons for this. First, these companies have outgrown the owner's ability to do everything. In my experience small firms can do about $1 million in revenue with an owner who serves as chief cook and bottle washer. Beyond $1 million delegation and management become much more important. The ability to acquire and leverage these skills makes growth possible. By the time a company reaches $2 million the owner has worked out many of the kinks in personal management style and has proven capable of delegation. That is key in strategic planning because execution has to be a team affair. Putting all of the execution on the owner’s shoulders is overwhelming and is not sustainable.

Second, companies at she $2 million level and above typically have the resources to invest in our services and money to spend on strategic initiatives. While we would like to work with everybody we also need to turn a profit. Sometimes smaller firms with good margins will hire us because they are committed to rapid growth, but they are the exception. It is very hard for the smallest of small businesses to afford outside help with planning and execution. That is unfortunate because in many respects these are the companies that can benefit the most from a little planning. In these cases motivated owners with some extra time can make great strides with some self help resources and a good peer group to serve as a sounding board.

Finally, companies larger than $2 million have teams. Teams are powerful things. One of the highest value skills we bring to clients is the ability to focus the entire team on one set of strategies and goals. When I say team I mean small groups of people that are at roughly the same level on the organization chart. A typical team might consist of the owner, the sales manager, the operations manager, the controller and the head of customer service. Once a plan is established and we begin execution this team is capable of holding one another accountable. They can help fellow team members problem solve and trouble shoot obstacles. They can pass the baton as certain groups take the lead in implementation. And they can sustain and even build momentum behind the plan. Teams are very important in the implementation of plans so working with companies that have established teams is generally more impactful.

I should say something about the upper limit of $20 million. Once companies get to this level we need a larger team of specialists to tackle different elements of most strategic plans. For instance, a plan built on the vision of becoming a mid market player will likely employ some type of capitalization strategy to fund expansion. Without a dedicated equity or debt specialist on our team I feel like we would be doing these companies a disservice. The same thing is true of companies that pursue M&A strategies in this space. We are very hands on during implementation. Moving into the market north of $20 million would mean delegating much of the implementation work to other experts. As we grow and add these resources that will change. However, we need to be honest about how thin we can stretch and how comfortable we are letting someone else drive the plan that we work so hard to build with our clients.

We have clients smaller than $2 million and we have clients larger than $20 million. But each of those outliers have extenuating circumstances that make them good candidates for strategic planning in spite of their failure to meet these revenue criteria.

Strategic Planning for Dummies

That's really not fair. I mean, no one likes to be called a Dummie. But admit it, we've all picked up one of those books in the hopes that some long sought after skill could finally be ours. The genius of the "Dummies" books is that they start at the beginning. So in that spirit I did a short podcast for all those business owners who aren't ready to hire their first strategic planning expert. They don't want to jump in with both feet. They just want to start at square one. Well in the strategic planning world square one is occupied by something called a strategic agenda.

The Role of S.W.O.T. Analysis

I will be honest. I am not a big fan of SWOT analysis. But who could blame me? My first introduction to the tool was at a partner retreat. The scene was set. There were two flip charts arranged in the middle of a 3 sided sofa arena. Our facilitator's penmanship was flawless. We broke for coffee and snacks after an hour and started back in again with renewed enthusiasm. But no one knew why we were doing this. It was like having all the building materials for a million dollar home delivered to the middle of a football field. No one knew what we were supposed to do with all of this intellectually inspiring, but contextually void material.

Since that time I have sat through many SWOT analysis sessions and I have led several. And sometimes I knew exactly what was going on, but other times I just felt like we were doing mental calisthenics. I have learned that many people know how to do SWOT analysis, but few know why they are doing it or what to do with the results.

**The role of SWOT is to help companies come up with strategies.** But unless the company knows what those strategies are supposed to achieve SWOT  simply serves to offer up a bunch of suggestions about things the company COULD do without saying anything about what the company SHOULD do. This can be the frustrating part for the bright minds in the room. During SWOT people are challenged to come up with their very best ideas, but no one knows how to filter and refine those ideas through the lens of a **strategic foundation.**

The strategic foundation is simply all of those things you address before you get to strategy. In order of importance they are:

1. The values of the organization and its leadership
2. The vision that leadership has for where the organization will end up.
3. The point of differentiation that sets this company apart from others. Sometimes this is called mission, or it is closely correlated to mission.
4. The mid range objectives (goals) the company is trying to get to on the way to attainment of the vision. These are usually 3, 4, or 5 year goals.

At this point SWOT gives the leadership team something to talk about. A careful, well facilitated discussion of strengths, weaknesses, opportunities and threats will inform the best way to go about achieving those mid range objectives. Many potential strategies will fall away because they are seen as inconsistent with the company's values or because they jeopardize the point of differentiation, or because they don't take the company in the direction of the vision. And a few will resonate so deeply with the strategic foundation that they become clear candidates for team's focus over the next year. 

That final selection of strategies is beyond the scope of this post. The point here is to give the SWOT tool some context so that when it is employed the output of the group is channeled into something useful instead of something intellectually stimulating but aimless and more than a little frustrating for the participants. If you do not have a strategic foundation that can be understood and explained by every member of the team you should spend time on that before you gather everyone for a day of SWOT analysis.

Why I do what I do

Are You Trying to Remove Roadblocks or Build a New Road?

In the course of helping companies with their strategic planning I have come to view the process in one of two ways. When putting together a strategic plan you are either removing roadblocks or building the road. These analogies might seem simplistic, but I think they are useful for a few reasons.

First, strategic planning can be intimidating, especially for teams at smaller companies. Teams with little planning experience may not know what they are expected to accomplish. Similarly, teams that do have planning experience may have been engaged in a process that was so complex they lost sight of the purpose of planning. A simple analogy contrasting two distinct types of planning can remove that mystique and give everyone a better sense of where they are expected to wind up at the end of the exercise.

Second, strategic plans are often abandoned. A clear understanding of the process, especially if presented in simple, easy to digest language will increase the involvement of the team. Greater team engagement makes it hard to abandon the plan later. There is a great sense of accountability that comes with a group effort.

Third, the easier it is to understand and communicate the process the more likely that it will become a regular part of the team’s role. The same principles that are used in broad, business planning are useful as more narrowly focused teams work on operational challenges or specific performance improvements.

So what does building a road look like? Strategic planning using this method is sometimes called goals-based planning. At its most fundamental level it involves a) defining where you are and where you want to go b) deciding the best route or strategy to get you there and c) making the operational changes necessary to close the gap and arrive at the goal or vision.

The road building analogy is useful because everyone can relate to charting a course from their present position to a desired destination. It is also useful because it can serve to illustrate the different phases a company goes through in the planning process. There is designing the plan (surveying the route the road is going to take), executing the plan (physically building the road) and working on efficiencies while establishing new standard operating procedures (maintaining the road).

But some companies have a hard time with such a comprehensive planning process. There could be lots of reasons that teams find the road building type of planning difficult. Often they have no prior experience setting organization wide goals or they may have had a dismal experience working on a prior plan. Sometimes they just lack the resources to tackle something as intense as a goals-based plan. Whatever the reasons the paradigm of removing roadblocks may serve these teams better.

Removing roadblocks recognizes that whichever route or strategy a team takes there are some fundamental issues that keep holding them back. That is why this type of work is often called “issues-based” planning. Some good examples of roadblocks are poor delegation by top managers, lack of a good sales process, ineffective information gathering systems, insufficient capital, inconsistent product or service quality. The list goes on.

In this type of planning the team’s first job is to prioritize all of the issues that could be addressed. Next, the team focuses its entire effort on removing the number one road block. And this is key. Teams that spread their efforts over three or four different issues often fail to make significant progress on any of them. But those teams that put everything else on the back burner except the ugliest and nastiest road block can often dispatch the issue in two to three months. Then they move on to the next item on the list.

It is usually the case that teams graduate from removing road blocks to building their own roads after twelve to eighteen months of successful issues-based planning. The morale, trust and confidence gained through successful road block removal serves these teams well and frees them up to imagine the possibilities to be realized through goals-based planning.

If you are about to begin the planning process for the first time or if you are trying to overcome the problems created by past planning efforts consider adopting the analogy that fits your planning paradigm. The imagery of road blocks and road building just might help your team get its arms around a plan to take the company to the next level.

Big, Hairy, Audacious Problems

In the 18 years since James Collins and Jerry Porras coined the phrase Big Hairy Audacious Goal most people instantly recognize BHAG as that thing that sets the vision for the organization. BHAG’s are very helpful at keeping companies focused on the long term. They give context to strategic plans and help companies weed through strategies until they find the ones that align with the big picture. They inspire and guide at the same time. In many ways they are the starting point for developing a plan and the ending point when you reset the vision.

Goals are important to the planning process and a big, hairy, audacious one can serve companies well. But along the way you may encounter problems or roadblocks that are just as big, just as hairy, and just as audacious. When that happens you may find that it is best to put the quarterly plan aside (you do have a list of priorities for the quarter don’t you?) and just focus all the effort on overcoming the problem. This post is about recognizing BHAP’s and how to put the plan on hold while you work to solve them.

How do you know when you are up against a BHAP? How do you know you aren’t just experiencing a run of the mill roadblock? This is important. Every team runs into problems that have to be solved. Troubleshooting is one of the central tasks of managers. Leadership teams in smaller companies must get good at diagnosing and remedying all sorts of operational challenges. Any company executing an intentional growth plan should expect to encounter workflow bottlenecks and impediments to growth. When these normal challenges arise they are typically delegated to a team member or operations unit to solve. Many times a manager will run up against a problem and the issue never makes it to the leadership team because the manager feels like it is their problem to solve. And most of the time this works just fine. Not every problem requires the resources and focused efforts of the team.

But BHAP’s are not like ordinary road blocks. They do require attention and resources from the whole team. The easiest way to examine a BHAP is with an example. There once was a team that had developed a cross selling strategy. This strategy required the company to adopt a new CRM system. The implementation of this system was delegated to the finance and accounting department because they had the most experience getting new software platforms up and running. The install and conversion of existing data went smoothly enough, but adoption of the new system was painfully slow. Week after week the manager continued to deliver disappointing and frustrating project updates. Finally, the whole team decided to help the controller take a closer look at what was holding things up.

What no one anticipated was that the new CRM’s user interface would require minor tweaks to the workflow processes of almost every department. These were not big changes, but management had done a great job over the years standardizing processes and building a very efficient machine. In fact, they had done such a good job standardizing processes that standardization and documentation had become part of the company culture. In their highly regulated industry this had even come to be viewed as a competitive advantage. This view was reinforced each time they acquired a smaller competitor. Newly acquired employees would see immediate productivity, sales and efficiency gains as they adopted the standardized processes of their new employer.

But this culture was a double edged sword. Now the employees were being asked to use a system that didn’t exactly match up with the standardization they had embraced for years. When the management team recognized they were facing a BHAP they decided to suspend all of the other projects tied to the strategic plan. At this point they were about 3 weeks away from the quarter end and only two weeks away from their planning meeting for the next quarter. Not only were they going to miss the implementation targets for this quarter, it looked like they were in jeopardy of starting the next quarter way behind schedule. But they didn’t panic. They proactively decided that addressing the BHAP should be their top priority for the next 16 weeks and that other elements of the plan could wait until they had resolved the CRM and workflow problem.

It was a good thing they set aside so much time because it took about 16 weeks to solve the problem. Every manager went back to their team and painstakingly documented every place where the new CRM user interface departed from the previously documented standards. They then asked the question, “do the standards need to change or does the user interface need to change.” By the end of the next quarter they not only had 100% adoption of the new CRM, they had business processes that were much stronger than the industry leading practices they were already using.

If you find that a team member is struggling with an area of the strategic plan you need to consider whether the company might be running up against a BHAP. In my experience any project that gets more than 4–6 weeks behind is a BHAP candidate. And even small problems can become BHAP’s. We have all experienced the runaway project with the outrageously blown budget. When any team member starts to feel overwhelmed consider marshaling the resources of the group. Call the calvary, declare a BHAP and focus everyone on solving the problem so the plan can get back on track. Suspending your strategic plan for a quarter or two could be the smartest thing you do all year.

Also recognized that addressing BHAP’s is not like working your normal strategic plan. A BHAP has become Big, Hairy and Audacious for a reason. You need to treat it seriously. I recommend that teams facing a BHAP set aside a space for their BHAP war room. I also push teams to set aside a second daily huddle for the managers or team members working most directly to solve the BHAP. This is important for two reason. The first is practical. Every big problem represents a big opportunity. If the team is paying attention it will uncover some new knowledge that stands to have great value for the company. Dedicating a separate space and meeting time to the BHAP guarantees that there will be a place to capture, organize and later (once the BHAP is solved) analyze this information for the future good of the company. It is often times the leadership team that takes over the BHAP war room after things have settled down to debrief the troubleshooting team and draw conclusions from the new data. Picture the generals and CIA spooks picking over the remains of an overrun enemy stronghold. What you do with the aftermath of a BHAP campaign can be more valuable than solving the original problem.

In the example above the team discovered that some of the process and standardization issues that had been causing them headaches were caused by the enhanced capabilities of the new CRM’s back end. Their original systems were designed around flat file databases. The new CRM was relational and allowed for the creation of ad-hoc datasets by even front line users. The team that came in to perform the BHAP “autopsy” recommended that the next year’s strategic plan consider how restructuring their backend database could provide a competitive advantage.

The second reason it is important to declare war on BHAP’s and to set aside space and time for it is behavioral. BHAP’s have been pestering the managers involved with them for weeks or months. They have become 800 pound gorilla’s that get heavier and meaner every day. To those in the thick of it they appear insurmountable. When the BHAP team decides to start attacking the problem in very different, very tangible ways it helps the people who have been struggling since day one to find their own personal reset button. They rejoin the fight to solve the problem with renewed morale and a fresh outlook. This might sound trivial, but it is not. Teams will almost always find that the breakthrough comes form someone who has been working on the project since the beginning. The shakeup, the war room, the new faces and the renewed energy give your front line problem solvers a new outlook that usually works to shake loose a solution no one could see before.

BHAP’s are a pain in neck, but unless you are running into them you can’t be sure that the progress you are making is meaningful. Don’t get discouraged and don’t be afraid to set aside your strategic plan for a few months while you tackle the problem. Mix things up and resist the urge to just throw more people at the problem using the same methods that haven’t worked. Setup a war room. Convene a separate daily huddle. Give the front line people a day off before the big launch and tell them you need a fresh look at the problem. And when it’s solved, throw a party. Your team will deserve it.

Mastering the Rockefeller Habits by Verne Harnish

This month's Axiom Book Club event featured Verne Harnish's book Mastering the Rockefeller Habits. Axiom founder, Joey Brannon gives a one hour overview of the book and the key points necessary to put Harnish's planning principles into effect immediately.

What Whiteboards Can Teach You About Failing Faster

When I started a CPA firm years ago I leased space in a mid-rise office building. Every room in our space had big five foot high windows along the exterior wall. One day I picked up a pack of dry erase markers and instantly converted about 30 linear feet of window space into the largest whiteboard I had ever used. I was in love. Over the years clients learned to love the window whiteboards as much as I did. There were a lot of good ideas hatched on those windows. But we had to take pictures of them before it got dark or you couldn’t see what you had put up on the board.

The more I used whiteboards and, importantly, the more I watched others use them I saw how the impermanency of the medium helped people embrace failure, albeit a very specific kind of failure. The whiteboard helped people embrace idea failure. To see the effect impermanency has on a person’s willingness to take risk ask her to brainstorm on a flip chart. Then compare that performance to a second session using a whiteboard. People seem to know that anything they put up on a whiteboard is relatively fleeting compared to the “set-in-stone” flip chart. There is some inate fear that the boss might pull out the old flip chart years down the road to remind you of the ridiculous idea you tossed up during the annual retreat.

There is a lesson in here, and it isn’t that you should replace all of your flip charts with whiteboards. When you are developing strategies and tactics to move your company forward you should be willing to try new things. To encourage trying new things you need to create an environment of impermanency. Because if you hang the success of the company on the success of the next project you are going to encounter a group of terrified, not motivated, participants.

How do you bring the impermanency of a whiteboard to your strategies and tactics? One way is to run trials. Rather than overhaul your purchasing process to increase gross margin maybe you can try a new purchasing procedure for just 30 days. Instead of trashing the hardcopy field manuals maybe you can issue iPads to just two technicians and have them report back after four weeks of use. As an alternative to wholesale pricing revisions you can use the new pricing methodology on all new proposals for two weeks.

The point is this. If your team knows that their neck is only going to be out there for a few weeks they are more likely to stick it out. And you can encourage them to do it more often by showing grace and trumpeting their courage at the end of every trial season.

The maxim “fail faster” has become so cliche few people take it as a serious cultural value. It is cliche because no one goes on to describe how to build systems that help you fail faster. The answer is that you build systems that can also win faster. If there is one problem I see when teams develop new strategies and tactics it is that they don’t specify where the finish line is or they put that line too far out to determine a winner or loser quickly. If you can build your projects and initiatives with a definite, near term finish line you will not only be failing faster, you will also be succeeding faster. Win or lose, your team needs to know where they stand before it becomes painfully obvious that the horse they bet on is going to finish dead last no matter what and there isn’t anyone brave enough to put a bullet in it for them.

There is another way you can encourage impermanency. You can set the table so that the stakes are low enough that no matter what happens the result will not be a game changer. For instance, you can roll out new technology in one department rather than push it out to the whole company. You can send one team on a leadership retreat rather than the whole company. You can change the product mix in one store rather than the entire chain. In a way these are trials too, but they are better suited to programs that might take a long time to measure as successful or not. This is often the case with longer term strategies.

A good example of this longer term perspective is a strategy to acquire new business to hit growth targets. Acquisition has many variables and different industries, even different markets, will have varying success rates when trying to grow this way. It could take a year more to know for certain whether a company’s culture can be transferred over to the employees of the acquired company. It can take a really long time to see if customers in a different culture will buy at the same rate and the same prices as the company’s home country consumers. By starting small you can lessen the anxiety that somone on your team is going to be responsible for the catastrophically expensive failure of a new idea.

These are only two ways that you can foster impermanency to increase the engagement and risk tolerance of your team. I am sure there are others. To find them ask you leaders what is holding them back. Ask them what fears, spoken and unspoken are behind any lack of engagement. And lead by example. Be transparent with your team. Communicate your own fears of failure and how you overcome them to take risks that are key to your company’s long term growth. Explain your own definition of long term and what kinds of short term setbacks you have had to overcome. Finally, do everything you can to fight the Chicken Little response. Poise and an unflappable response in the face of daunting failure will do more to set the tone for your team than anything you will read in a blog post.

As leaders we owe it to our team members to encourage new ideas. They will appreciate the freedom to fail. But words are not enough. We have to do practical things like facilitating trials and scaling down new initiatives to make them more comfortable taking these risks.

Accountability is a Voluntary Act

accountable (əˈkaʊntəb ə l)
— adj
1. responsible to someone or for some action; answerable
2. able to be explained

Accountability is incredibly important to execution. Without it great ideas remain ideas. Plans remain plans. Nothing gets checked off the list. No progress is made. Accountability may just be the secret sauce of achievement. On teams where accountability is taken for granted people follow through on their assignments, they show up on time for meetings and their reports are turned in on deadline. Accountable teams will challenge one another. They will call people out. And their relationships will get deeper because of this brashness, not in spite of it. This all sounds pretty good. The hard part is making it happen.

At Axiom we get to peek behind the curtains of organizations in a way experienced by few outsiders. What we see in management meetings, weekly updates and annual strategy sessions gives us a pretty good sense of how people relate to one another. This is important because it helps us know how to facilitate future communication within the group. We know who agressively participates, and who needs encouragement. We know who is likely to resist change, and who wants change for change sake. But this isn’t the whole picture. You don’t really understand a team until you see them at something less than their best.

We see a different side when projects fall behind schedule, when targets are missed and when the ball gets dropped. These situations tell us a lot about how accountable these team members are to each other. I experienced this on a team recently when a member openly admitted that the ball got dropped. The response from the team was understanding and encouraging. The admission and the followup discussion resulted in broader support for the idea. Not only did the team recommit itself to the project, several members who were not involved in the initial push volunteered to help out. But there was a tipping point where it could have gone either way. This was the point where accountability would either take center stage and all the goodness and positive effects of an accountable team word would be enjoyed or it was the point where feelings would get hurt, blame would be passed around and nothing constructive would result.

It would be nice if I could tell you that the faciliatator of this meeting had some masterful skill, a talent for getting groups to be accountable to one another. But that was not the case. It would also be nice if I could point to some team development book that they had all read, a book that caused them to see the benefits of accountability and the plan for implementing an accountable culutre. But they had not read any books. Finally, it might be convenient if I could point to some recruiting policy or filtering screen that only allowed accountable people on the team. But there was no such filter.

The truth is that the group tipped the right way for one reason and one reason only. The person who dropped the ball ALLOWED the group to hold her accountable. Accountability is a voluntary act. It is a submissive act. Unless I allow you to hold me accountable you can’t do it. You can try, but the results will be blame and misunderstanding. If you are my boss you can issue an ultimatum. But that is just holding me responsible. It is only when I take responsibility, and do it voluntarily, that I am choosing to be held accountable.

Because accountability is a voluntary act it is up to each team member to create a culture of accountability. As more members submit to be held accountable others emulate their volunteer spirit. The thing that makes all of this possible is trust. Team members who trust one another can submit to one another more easily. Once trust is broken accountability begins to weaken. Once it is gone the team may retain its high achievers, but the synergy of the team is gone. The group will cease to be greater than the sum of its parts.

So what do you do if you find yourself on a team that has no accountability? Worse, what if you are in charge of a team that has no accountability? You care. I don’t mean that you give out hugs before each meeting or that you counsel your teammates. I mean simply that you care about a person enough to speak up when you believe they are producing less than their best. You care about your own work and how it is contributing to the team. You care about the projects and the goals your team has undertaken. You care about results and stop worrying about what people are going to think of you. Get yourself out of the picture and start putting others first. I think you will find that your best work happens when you volunteer to be held accountable and encourage others to do the same.

The One Page Business Plan Secret Sauce

I have been a reader and writer of business plans since my undergraduate days. During that span of nearly 20 years I have become clearer about what a plan should do. I have also come to understand the secret sauce of effective plans. The one page business plan has been around a long time. I have not been able to find out who came up with the concept or coined the phrase. I personally didn't start using it until 4 or 5 years ago. But I have come to rely on it as an important tool in helping businesses realize their vision.

First, what should business plans do? The simplest answer is that they should give direction, context and meaning to the daily plans and actions of people working in the company. A plan is no good if it does not direct the actions of the team. But this is not the way most plans are written. The most frequent reason people build business plans is to get funding. Let me say that if you are building a business plan for an investor's benefit I hope that person is not a friend or family member. Here's why.

If you are trying to convince someone to put money into your company and you yourself are not able to articulate where the company is going and how it plans to get there then you should not be asking for money. That is my opinion. I think your chances for success are minimal and I think that extra money can only help you dig a deeper hole. We have all heard stories of .com progenies accepting million dollar checks from angels after developing only a few code snippets. That is the exception. Smart investors will not hand over cash without a very clear picture of how you plan to achieve success and some demonstrated ability to do the things necessary to make that success happen.

So let us assume that you are not asking for money. You want a plan for some better reason. You want your existing business to start growing again. You want the business you have just bought to justify the investment made. You want the company that is on the brink to become an industry leader. Or you want to move toward an exit strategy that will be years in the making. Whatever your motives they should be directed at knowing what actions need to be taken this week, this month, this quarter in order to achieve your particular vision. These are great reasons to build a business plan.

But why one page? Isn't more detail better? Shouldn't we try to articulate all the possible bottlenecks, critical paths and possible risks behind each strategy. Yes and no. Yes, you should consider all these things. You should even document them. But I am going to argue that leaving analysis out of your plan is the best way to make it useful on a day to day and week to week basis.

Most one page business plan templates follow a model that moves from left to right. My particular favorite is the one used by Vern Harnish and detailed in his book Mastering the Rockefeller Habits. On the left side you start with big picture stuff like values, mission and vision. On the far right are listed the individual team member's top priorities for the quarter. In between are a range of increasingly specific strategies, goals, and objective measures.

And there you have it. The secret sauce of the one page business plan is that it allows you to keep everything in front of you at once. You can see the 50,000 foot values of the organization and you can see the priorities that must be given attention this week. You have the what I must do and the why I must do it in one place. In this type of plan there is an update every 13 weeks. It never become stale. There is no binder to consult. There is no regional manager to ask for a strategic roadmap. There is only the page with a series of brutally measurable numbers that will tell you if the company is achieving its desired results.

Of course you have to execute and you have to hold people accountable. But the plan tells you what numbers to measure and it tells you what values are good and what values are bad when you take your measurements. Those specifics make accountability feasible. And that is the whole point of the one page business plan. It makes progress feasible.

The problem with 25 or 50 or 500 page business plans is that it is impossible to manage the day to day and week to week activities of a whole team with any long term continuity using those tools. The plan cannot be consulted on a regular basis because it takes too long to digest. It cannot speak to short term priorities because the process of updating those priorities is too inefficient to be effective. The one page plan format only appears incredibly practical because the alternatives are so ridiculously impractical.

If you are interested in simplifying your planning process I would encourage you to get a copy of Harhish's book. It is the most practical business planning and leadership resource I have ever used.

McKinsey Starts with a Hypothesis. Should You?

In their book The McKinsey Mind, Ethan Rasel and Paul Friga breakdown the methodologies used by one of the world's most well-known consulting firms. One of the basic building blocks of the McKinsey method is to begin with a hypothesis. Consultants are trained to use a hypothesis to focus their research and analysis early in the engagement. 

Initially I had a hard time coming to terms with this idea. It seemed to me that if I were to begin much of my data gathering and analysis with the hypothesis in mind objectivity would be thrown out the window. I questioned how we can truly arrive at the best solution for clients if we demonstrate bias in the beginning by formulating a hypothesis too early. I have thought about this a lot in the last few weeks, and I'm beginning to see the value in McKinsey's push to arrive at a hypothesis before much of the work is done.

The most often levied criticism against the consulting profession is that its practitioners fly in, diagnose all the problems with the client company, then fly back out without spending much, if any, time on execution. But if the consultant begins with the hypothesis, and the client understands the hypothesis and its implications something very different happens. If the hypothesis is proven true the client has a very clear and definitive course of action to take. The fact that much of the data gathering and analysis was based on a mutually understood hypothesis means that there will be a lot of objective information to guide the client's post diagnostic actions.

Consider the example of a small specialty manufacturing company. They've been losing market share for three years and hire some outside help to determine why. In talking with the management team the consultant narrows the possibilities down to pricing or lack of design+build capability. Of these two the consultant formulates a hypothesis that the client is losing market share because design+build services are not offered to customers. From here a very efficient scope of work is constructed to gather the data and analyze the results to prove or disprove the hypothesis.

If the hypothesis is proven true the client knows that in order to maintain and gain back market share an investment in design services must be made, and this new capability must be communicated to the marketplace. These are tactical projects well within the capabilities of the management team.

If the hypothesis is proven untrue the client will immediately look at pricing, and may or may not engage the consultant for help. Data will still be gathered and analyzed since it would be unwise to assume the disproving of one hypothesis is proof of an alternative. However, if the initial narrowing of hypotheses was valid there is a very good chance the client will find that pricing is indeed the issue. Data that eventually proved the hypothesis will also guide the client's decisions in changing pricing to retain and regain market share.

Formulating a hypothesis early in the engagement has the benefits of informing data gathering and analysis, and putting together a more concrete implementation plan once the hypothesis is proven or disproven. To make this work I think consultants should build the following into their engagement model.

• Intentionally structure the engagement into two phases 1) hypothesis formulating and 2) hypotheses proving.


• Build a sense of urgency around phase 1, hypothesis formulating. Through interviews and due diligence good consultants can whittle down the possibilities and arrive at a consensus with the client about what the most likely hypothesis should be. A sense of urgency means the value added work of data gathering and analysis can begin sooner before the client's budget is wasted educating the consultant on every conceivable problem or inefficiency contributing to less than optimal performance.


• Educate clients that hypotheses proven false can be just as valuable as hypotheses proven true. The goal is to understand what is going on and what to do about it. Eliminating expensive and time wasting options is extremely important. Had someone taken the time to disprove the hypothesis that online content should drive mass media distribution the AOL Time Warner debacle could have been avoided.


• Hone hypothesis formulating skills and tool sets. McKinsey does this by curating and managing their accumulated intellectual capital. Knowledge management is essential to getting better at the art and science of hypothesis formulation. Taking the time to write up case abstracts, standardize tool sets and make incremental improvements in processes make us better at delivering value early via thoughtful, informed hypotheses formulation.

Strategic Planning for Dummies

The "for Dummies" franchise was pretty good at breaking the ice. It allowed millions of people to stop being intimidated by subjects oustide their area of expertise. I find that small businesses in particular (less than $10 million in revenue) are intimidated by the idea of strategic planning. But they need not be. This short video explains what I think are the most basic elements of the planning process.