It takes just 15 seconds to understand the basics of someone’s personality style (including your own).
This article is for leaders who seek an edge in navigating a personal or organizational crisis.
You’re either on top of events or events are on top of you.
- Pat Riley
A good warrior must always assess his present position, evaluate his losses and assets, and move forward.
- Tim O’Shea
When you’re in a crisis, there are three things you can do to get out of it. These three things will not only create distance from the current crisis; they’ll make you stronger and more resilient, as well as help you avoid a similar crisis in the future.
These three steps aren’t easy. They take great courage. But they work for just about any type of crisis: financial hardship, poor health or disease, a deteriorating relationship, or a business failure.
Follow these three steps whenever you’re feeling stuck, afraid, or trapped by circumstances and you’ll break through to greater freedom, perspective, and new opportunities – usually much faster than you could have imagined. The three steps are:
- Stick to your strengths and core values
- Do what you’ve been resisting doing
- Trust and follow one expert or method until the crisis has passed
HG Wells said, “The crisis of today is the joke of tomorrow.” Putting these three elements into practice will transform your crisis of today into something you can laugh at in the near future.
Stick to Your Strengths and Core Values
If you’re in a crisis, chances are that you stopped playing to your strengths or stopped living by the real values in your heart some time ago. Is this true for you? If so, then this crisis is your wake-up call.
Now is the time to get back into your strengths and double-down on your core values. Say “no” to everything that’s not in your wheel house. Say “yes” to everything that is. Play to your strengths. Stick to your core values. They’re non-negotiable.
The risk here is that, in the fear and uncertainty of the crisis, rather than doubling down on what you do singularly well and sticking to your core values, you freak out and do something drastic or foolish that isn’t in alignment at all.
If you do, an ordinary crisis can quickly turn into a catastrophe. For example, about a decade ago, Martha Stewart was at the top of her fame and power. Her strengths were media and communications and the core values she expressed were beauty, elegance, and fine entertainment. Then Martha got off track. She got caught up in an insider trading scandal. Then she lied about it, got busted for it, and was sent to prison – only to watch her empire crumble.
While we all get off track from our core mission and make mistakes, when we get a wake up call (like from the Feds), it’s like a smack across the face to get back to basics and return to our strengths and core values. If we don’t, if we panic and go in the opposite direction, this usually leads to calamity.
So don’t panic. Calm down. Take a look at the facts. Identify your core values and don’t compromise them. Identify your true strengths and begin to play from there. When you do, even the scariest situation will begin to resolve itself into clarity of purpose.
Key Question to Ask Yourself: What are your strengths and core values?
Do What You’ve Been Resisting Doing
I have an unprovable theory that we create crisis in our life because we’ve been resisting doing what we know we’re supposed to be doing in our heart. “Fate leads him who follows it and drags him who resists,” said Plutarch.
There’s something liberating about a really good crisis. It forces you to cut away those things that are no longer serving you and probably haven’t been serving you for a while. What should you cut out? It could be anything — an old mindset, a self-limiting behavior, a toxic relationship, an underperforming business unit, a job you hate. You name it.
When you cut out the old, you give space for the new to emerge. This takes real courage. For instance, at 45 years old, Mary Jones was diagnosed with terminal cancer and she was given only a few months to live by her doctors. A true crisis.
Mary’s life dream was to work with orphans in Southeast Asia but she had never found the time or money to take a sabbatical from her job as a corporate controller. Having a prognosis of just a few months to live sent Mary into action. She quit her job, sold her house, and dedicated her remaining days to helping kids while her health allowed her.
Basically, Mary cut out everything except what was truly important to her — what she knew in her heart she should have been doing all along. You won’t be surprised to learn that Mary’s cancer “miraculously” went into remission and ten years later, she has a clean bill of health. Why? In my opinion, the crisis showed up because Mary’s career choices were fighting against her true desires. The crisis went away when she owned up to what she was resisting doing and took action to actually do it.
To be clear, I’m not saying you need to leave your CEO job and go work with orphans. I’m saying that, when in crisis, you need to take action on whatever it is that you’ve been resisting so that the new thing can emerge.
Key Question to Ask Yourself: What have you been resisting doing?
Trust and Follow One Expert or Method Until the Crisis Has Passed
There’s a time to explore options, teachers, and methods. A crisis is not the time. If you need help in navigating a particular crisis, then choose and commit to only one expert or method that you trust. Cut out any other sources of advice or guidance until you’re re-integrated on the other side of the crisis and you have the energy and capability to explore new options once again.
In a recent Ted Talk, Baba Shiv explains that having too many options, or too much conflicting advice, actually makes it less likely that you’ll achieve success.
Here’s an example. About a decade ago, I had a coaching client and he was making great initial progress. He seemed on the verge of creating a breakthrough in his life and business.
Then unbeknownst to me, he started seeing an energy healer/psychic to help him with a health condition. This “psychic” said something to him that made him question our entire approach and method together.
While we did talk it through afterward, all the momentum we had built up in this early critical phase was gone and we never got it back. We soon ended our coaching collaboration. The sad thing is that he was never able to recover and, although we remained friends, he’s still stuck in that same issue today.
I recognize that blindly trusting the wrong method or guru can also be a recipe for disaster. But the solution during a crisis isn’t to dabble. The solution is to go “all in” with the method you believe in and stick it out for a reasonable time frame. If a reasonable time has passed, and if you’re still not getting the results you’re seeking, then change to a new expert or approach. But don’t trade horses mid-race.
Key Question to Ask Yourself: Who is the one person you trust to help you across to the other side?
In his book, The Winner Within, Pat Riley writes: “Renewal always begins with destruction. The key is guiding the pain of destruction in the direction of renewal. Otherwise, the pain is useless and self-defeating.” I couldn’t agree more.
A crisis is a form of destruction of the old to make way for the new. You channel the pain of the crisis by playing to your strengths, sticking to your core values, owning up to what you’ve been resisting doing, and trusting in a worthy mentor or guide to help you get across the hard parts. If you do those things, then a crisis becomes truly liberating.
What do you think? How have you successfully navigated a crisis before?
Last week, I was invited to speak to a group of college students at the Next Generation Summit at UCSB. I knew that most of them were probably under extreme pressure from their parents, peers, and society to go forth and “get a fricking job,” so I thought it would be fun (and helpful) to tell them the exact opposite: “Don’t get a job. Get in your Genius Zone!”
My core message is that everyone is a genius at something. If you don’t know what that is, and if you want a life with greater success, meaning, and happiness, then your mission is to go forth and find that “thing.” Once you’ve found it, then you must sacrifice to design everything in your life around it.
When someone hears this message for the first time, the typical reaction is, “OK, but what am I a genius at?” I answer this question in the talk with a simple formula: Talents + Purpose = Genius and then I give several examples of college students living this formula right now who are showing up as geniuses within their niche and making a positive impact on the world.
I, too, benefitted from giving this talk. My personal key takeaway is that there are committed and talented people in every generation. While the media often portrays “Millenials” as a spoiled, over-parented, unaware, and texting- and Ritalin-addicted bunch, I found this group to be incredibly insightful, passionate, engaged, and sincerely committed – not just to having a job, but to making a real difference. It was inspiring and reaffirming that humans are indeed very cool beings.
How about you? What do you think of the talk?
Adam Grant, author of Give and Take: A Revolutionary Approach to Success (a must read book!), recently published a great LinkedIn article called “What’s the Common Ingredient for Team Success in Surgery, Banking, Software, Airlines, and Basketball?” I want to share it with you, along with my comments, because it’s a great illustration that success has more to do with the surrounding environment (i.e., vision and values, structure, process, and team) than with individual talent.
To get important work done, most leaders organize people into teams. They believe that when people collaborate toward a common goal, great things can happen. Yet in reality, the whole is often much less than the sum of the parts.
Many teams fail because they lack the requisite experience. If you want to perform a successful cardiac surgery, you need to bring in surgeons who have mastered the techniques. If your aim is to make good stock recommendations to investors, it would be wise to hire analysts with a long track record of star performance. If your goal is to produce high-quality software, land an airplane safely, or win basketball games, you’d be smart to rely on people who have done it before. As Jim Collins put it, we need to get the right people on the bus. But what if work experience is overrated?
How many times have you interviewed in the past year looking for “past experience” as one of the primary drivers of job fit? This is a fallacy, which I’ve written about before in “What Warren Buffet Can Teach You About Hiring”, that needs to end. Yesterday. And here’s where this gets interesting:
In a brilliant study, researchers Robert Huckman and Gary Pisano tracked more than 200 cardiac surgeons at 43 hospitals. After analyzing more than 38,000 procedures, it turned out that the surgeons didn’t get better with practice. Their patient mortality rates were no better after 100 surgeries than after the first few.
A closer look at the data revealed a fascinating pattern. The surgeons did get better as they gained more experience at a particular hospital. Each procedure performed at one hospital decreased patient mortality rates by an average of 1%. But the benefits of experience didn’t carry over to other hospitals.
The technologies weren’t any different from one hospital to another; the people were. When the surgeons left their teams behind, it was as if they were starting over from scratch without any of the benefits of practice. Practice wasn’t an individual act; it was a team process. As the surgeons worked with a core team of nurses and anesthesiologists at one hospital, they developed effective routines that leveraged the unique talents of each member.
There’s a growing movement within the professional recruiting market to assess the skills and attributes of the top-performing “stars” in a company and seek to find new candidates just like them. Like Communism, this approach sounds great on paper but fails in reality. Why? Because great teams are born out of complements, not similars. Success occurs within complementary teams, in a unified setting, and with efficient processes, clear metrics, a sound structure, and great support. This is a delicate mix. If you keep hiring “all stars” on paper, you run the great risk of destroying the equilibrium. Just look at the 2013 Lakers. A bunch of future Hall of Famers who don’t mesh well as a team.
In teams, it appears that shared experience matters more than individual experience. The best groups aren’t necessarily the ones with the most stars, but rather the teams that have collaborated in the past. In a study of more than 1,000 security analysts led by Boris Groysberg, when star analysts moved to a new firm, it took them an average of at least five years to recover their star status—unless they moved with their teams. The star analysts who moved alone had 5% odds of receiving the highest ranking from investors, whereas those who transferred with their teams enjoyed a 10% chance of earning the top spot.
Huckman and his colleagues found similar patterns in a study of more than 100 software development projects. The highest quality and on-time delivery rates were achieved not by the teams whose members had the most individual experience, but by the teams whose members had the most shared experience working together. Another study of product development teams showed that it typically took two to four years for members to gain sufficient experience working together to achieve their potential.
Shared experience in teams is so important that Richard Hackman, one of the world’s foremost experts on teams, went so far as to include it in the very definition of team effectiveness. In Leading Teams, he argues that, in addition to assessing the quality and quantity of output, we should expand our measures of team effectiveness to include viability—whether the team retains its capability to work together in the future.
The benefits of shared experience are visible outside knowledge work. Hackman referenced a NASA study showing that fatigued crews with experience flying together made significantly fewer errors than rested crews who had never flown together. He also pointed to an NTSB analysis of airline accidents revealing that 44% occurred on a crew’s first flight together and 73% on a crew’s first day. And an investigation of all NBA basketball games played from 1980 to 1994 showed that as teams gained more experience, they won more games. This was true even after accounting for player talent and age.
If you think about it, teamwork is blending individuals’ talents and strengths into a force that is greater than the sum of its parts. There’s real chemistry and alchemy here. It takes time and seasoning for a good team to become great. Time is necessary for team members to get to know one another and anticipate each other’s thinking and moves. But I think the real value comes when the team “grows up together.” Once the team has developed a sense of a shared journey, sacrifice, and group learning from successfully moving through trials together, then its true potential can be unlocked.
There are alternative explanations for some of these findings. Many airline crews only do one flight or day together, meaning that there are more chances for accidents to occur on first flights and first days. Basketball executives and coaches work harder to keep successful teams together—and players are more motivated to stay with winning teams. Consistent with this idea, when NBA teams win more games in year 1, they’re more likely to stay together in year 2. But the opposite also holds: NBA teams with more shared experience in year 1 win more games in year 2.
Interestingly, in the NBA and R&D, the gains from shared experience declined over time. The value of the first few years together was much greater than additional years accumulated. As teams stayed together longer, they had less to learn and faced a greater risk of becoming too rigid and predictable in their routines. At that point, rotating a member—or a coach—might be a critical step. But most teams never made it there. The vast majority of teams weren’t together long enough to benefit from shared experience.
Today, too many teams are temporary: people collaborate on a single project and never work together again. Teams need the opportunity to learn about each other’s capabilities and develop productive routines. So once we get the right people on the bus, let’s make sure they spend some time driving together.
From the perspective of Organizational Physics, there’s something absolutely critical to highlight here: the importance of lifecycle theory. Great leaders understand an organization’s lifecycle stage and treat it accordingly. If you let your team stay together too long, it’s going to get tired and stale. It will lose its humph and innovative power. Conversely, if you break the team up too soon, it will never have a chance to learn from its mistakes and form into something great. The key here is to recognize what lifecycle stage each team is at, as well as the stage of the surrounding business unit in which the team operates. You don’t treat a 30-year-old like a 3-year-old and vice versa.
If you’d like to learn some signals to watch for when a team should be broken up or kept together, or if you have any other questions or comments, please include them in the comments area below.
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Ars Technica published a great article this week “The rise and fall of AMD: How an underdog stuck it to Intel.”
The article follows the rise and fall of AMD over the years in its attempt to wrest a market leadership position from Intel (a war it was never able to win) and gives many anecdotes about the leadership style of the company founder and CEO Jerry Sanders. I want to share this article because it’s a good read and because it captures the essence of how a company behaves when a Big Innovator is at the helm.
As you might know if you’re familiar with my work, the Innovator style is one of four management styles that we all possess to some degree. You can read more about these styles (Producer, Stabilizer, Innovator, and Unifier) in Part II of my book Organizational Physics: The Science of Growing a Business.
Our best Innovator qualities are our ability to anticipate change and to be imaginative, charismatic, and inventive. Without the Innovator force, we would have no ability to adapt to changes in our environment and we would quickly become irrelevant or extinct.
When the Innovator force is really high, we call it a “Big Innovator” or “Big I.” The Big I shows up in some predictable and telling ways, and this description of Sanders is a perfect example:
On June 10, 2000, Advanced Micro Devices (AMD) wanted to party—and party big. The company’s CEO, Jerry Sanders, arranged to rent out the entire San Jose Arena (now called the HP Pavilion) and then paid big bucks to bring in Faith Hill and Tim McGraw, the husband-and-wife country music superstars.
Employees “could bring anybody, your wife, your kids, your friends—it was big doings. There were celebrations, gifts and awards,” recalled Fran Barton, who served as AMD’s chief financial officer from 1998 to 2001. The boss even got in on the fun. “[Sanders] was on a high wire, he did a unicycle ride. It was totally Hollywood. He could really put on a show when he wanted to put on a show.”
And why not celebrate in style? AMD’s successful Athlon chips—Ars named the Athlon its “CPU of the Year” in 1999—had finally put the screws to archrival Intel, and in 2000 the company earned nearly $1 billion in profits.
By 2005, years of solid chip design and technological execution had the company walking with a swagger, as seen in marketing stunts which challenged Intel’s then-current server processors to a “dual-core duel.” Nowhere was this attitude more apparent than AMD’s 2005 lawsuit against Intel for anti-competitive business practices.
When a Big Innovator feels momentum, there is no greater joy to them than rallying people to their cause and celebrating the realization of their vision. They’ll put on a great show, go over the top, and try to get everyone else to feel inspired and “believe” in them and their vision.
But don’t confuse the Big Innovator’s charisma and charm on stage with his or her everyday style. Unlike Big Unifiers, Big Innovators have no real need to connect with others other than to sell their vision and create a legion of followers. They may seem charming, gregarious, or compassionate on stage, but it’s really about selling the vision, not bonding for bonding’s sake.
Now let’s read more about what happened with the business:
Doubters didn’t think the good times could last. “I rode through a few such cycles and can recall the zenith of decadent exuberance and breathtaking spectacle in 2000 when AMD’s then showman CEO, Jerry Sanders, clad in tight leather pants, shirt cracked open to the waist, descended to the stage of the HP Pavilion in a cherry-picker and announced that AMD’s stock would soar to over $100 per share and that another [chip fabrication plant] would be built in Austin,” recalled Bill Bushnell, a rank-and-file veteran software engineer at AMD, in an e-mail to Ars. “Neither occurred.”
AMD has been on a notable drop for nearly a decade now. To put it mildly, 2012 was a rough year: AMD lost over $1 billion, effectively wiping out its $471 million profit in 2010 and its $491 million profit in 2011—its two most profitable years in the last decade. Over the last 15 years, AMD has sustained a net loss of nearly $7 billion, and the company has been downgraded by credit rating agencies, burned by lower demand for PCs (and hence, for its products), and even called “un-investable” by one Wall Street analyst.
Last month, the company even sold (and then leased back) its corporate headquarters in Austin, Texas for $164 million as a way to make some quick cash. After years of technical stumbles, Intel now runs circles around AMD in desktop, laptop, and server CPUs, while newcomers like Qualcomm, Samsung, and Nvidia have used their low-power ARM chips to shut AMD out of the burgeoning smartphone and tablet markets. And critics charge that the company still has fundamental structural problems that go beyond technical missteps.
“There’s no control on spending—even now, one of the problems is if you take a look at the salary structure,” said Atiq Raza, the company’s former president, chief technical officer, and chief operating officer, in a conversation with Ars. “[AMD is] a sinking ship, fundamentally. I really am sorry for [current CEO Rory Read]. He’s a well-intentioned person but the ship has a huge hole in it. That $164 million is going to go in no time.”
Raza calls the company’s decline “one of the great fumbled opportunities of our time.” How did AMD go from the most successful period in its history to one of its bleakest—and does the company have a fighting chance going forward?
Big Innovators are big dreamers and hence can be powerful catalyzers to create and launch new opportunities by the sheer force of their will, intellect, and vision. But there’s a saying that big dreams need wings and landing gear, and that’s where Sander’s Big Innovator style ultimately cost the company big time. It’s the classic hero’s tragedy, full of genius and dangerous hubris:
When Jerry Sanders was 18, he was beaten in a street fight by people who left him unconscious in a trash can. “They fractured my skull, broke my nose—that’s why you’re photographing from the left,” Sanders told Daniel Marrow of Computerworld (PDF) in 2000. “So my nose is not more crooked than normal, ribs—I mean just a disaster. And they left me to die. They literally left me to die.”
But after three days in a coma, Sanders rallied.
“I once said ‘I can die, but I can’t fail’,” he told the San Francisco Chronicle for a profile. “What I meant was, I was always going to give it my all. I couldn’t fail, because failure wasn’t an option. I would die before I’d fail.”
Sanders went to work for Motorola and Fairchild Semiconductor, but he didn’t work long for others. He opened AMD for business on May 1, 1969—when he was just 33 years old. He quickly cemented a reputation for being defiant and flashy, and he kept a poster in his office which read, “Yea, though I walk through the valley of the shadow of death, I shall fear no evil—for I am the meanest son of a bitch in the valley.”
“He’s a mix between Don Quixote and Indiana Jones,” former CFO Barton said, “a swashbuckling idealist, not afraid to tilt at windmills and dream the impossible dream. His whole career, his impossible dream was to battle Intel. And he battled very hard for decades.”
Innovators make life interesting. The media loves to portray them as swashbuckling heroes who overcame great odds. See Steve Jobs, Larry Ellison, and Richard Branson. Get behind the press releases and fawning magazine articles and you’ll find that Big Innovators are often acerbic, defiant, and short-tempered. They change their minds frequently and often burn things and people down with as much fervor as they once built them up:
… Microsoft CEO Bill Gates showed an interest in NexGen and had a 45-minute meeting with Raza (soon to be AMD’s new COO) that stretched into a four-hour dinner. Gates suggested that Raza speak to Sanders since AMD owned a chip fab but needed a better product to build in it. Raza said he would like to talk with Sanders but said he didn’t know how to reach the AMD CEO, much less get him to pay attention.
“The first time I was introduced to Jerry Sanders, he didn’t even pause long enough to hear my name—he kept calling me Raja,” Raza told Ars. “He did that nonstop for 45 minutes telling me how AMD is going to crush me. I stayed there with a smile on my face, but how do I communicate with such a person? Bill said, ‘Jerry should not be underestimated—he has three qualities: he’s smart, he’s extremely egotistical, and he’s completely random.’”
Bill Gates totally nailed the definition of a Big Innovator. Tons of ideas. Very intelligent. Usually driven by fear/ego. Often Big Innovators are more interested in validating and defending their existing vision than in learning something new that might counter that vision. This is true until their vision isn’t executing as fast as they’d like. Then they look for a new one, which becomes the “vision of the day.”
Sanders’ management style was idiosyncratic, and it created both loyalty and friction. Patrick Moorhead, AMD’s vice president of marketing from 2000 to 2010, still remembers the day he interviewed for the AMD job with Sanders. “I parked my 1990 Toyota Camry next to his Bentley convertible,” Moorhead told Ars. “We talked about making a difference and shaking up the industry and quite frankly I just fell right into that. I absolutely loved that pitch.”
We were running quarter after quarter on the ragged edge and had been for decades. It was a real culture change of ups and downs. But Raza quickly grew unhappy with his boss’ approach to work. Since 1979, Sanders had kept his Beverly Hills office, commuting up to Silicon Valley each week and returning to Southern California Friday through Monday.
“If [Sanders] was constantly engaged, that would be acceptable,” Raza said. “He was not engaged. He would be upset if I called him too late in the evening or too early in the morning. I’m a 24/7 kind of guy.”
Here’s the thing: Big Innovators are outstanding at selling a vision and they need to work on their own schedule, whenever the mood strikes them. This is why two Big Innovators in a company usually clash… it’s a conflict of who holds the vision and who sets the direction.
The other big issue came in around finances:
As The New York Times reported in 1989, AMD’s corporate culture had also lost the thrifty habits it had at its founding. “Mr. Sanders’s increasingly lavish style also became contagious,” wrote the paper. “Salesmen who did not wear Rolex watches were likely to find their less-expensive time pieces thrown away by high-level executives who wanted the company to have a certain image. It was an atmosphere, former employees say, that encouraged loose spending throughout the company—a far cry from the early days at Advanced Micro, when Mr. Sanders once rejected a request for an electric pencil sharpener because it was too costly.”
Raza also became concerned about the spending, which he came to see as extension of Sanders’ personal lifestyle. Shortly after AMD bought NexGen, Raza visited Sanders at his expensive Los Angeles home.
“I said, ‘It’s a beautiful house,’” Raza said. “He said, ‘I got in a competition with Madonna. We had a fight and I outbid Madonna.’ I said, ‘OK…’ And he said, ‘I understand what you’re thinking. I spend more than I make. I always have spent more than I make.’” Raza said that the comment hit him like a punch in the gut. “And I said, ‘I hope you don’t do it at AMD,’ but he did,” he added. (Sanders did not respond to our request for comment.)
Notice that money is just a tool to support the vision — classic Big Innovator behavior.
Financial problems mounted. As AMD stretched out the life of the K6 line, former CFO Barton recalled how the company flitted from one near-disaster to another every few weeks.
“We would have Monday morning operating meetings and someone would say, ‘We have a glitch. The yields have dropped precipitously and we don’t have anything to sell next week,’” Barton said. “The financial ramifications of that are awful. We have nothing to sell! We’re doomed! Then everybody would get their assignments and somewhere in the next day or two there would be an e-mail or phone call saying, ‘We fixed it. And it’s even better, sales will be higher.’”
Each time this happened, Barton said, Sanders firmly delegated assignments to each department. On numerous occasions, Raza himself only got a few hours’ sleep to isolate the repeated problems and get things back on track. On the financial side, Barton and his team had to make a decision about disclosing each problem to investors or to the Securities and Exchange Commission (SEC).
“We were running quarter after quarter on the ragged edge and had been for decades,” he added. “It was a real culture change of ups and downs. “For the rest of my career nothing bothered me [as much] anymore.”
Because the Big Innovator hasn’t allowed or learned how to integrate planning, efficiences, and controls, there’s constant management-by-crisis. It can be exciting in short bursts but creates fatigue over the long term.
However, just weeks after the K7 debuted on June 23, 1999, Raza (the COO) left AMD amid rumors that he had a major falling-out with Sanders. Analysts were left scratching their heads.
“It’s certainly going to reduce confidence in the company’s ability to compete,” Linley Gwennap, chief analyst at Cahners MicroDesign Resources, told the Los Angeles Times in 1999. “Atiq was the one guy in upper management that really understood the technology behind the K6 and K7.”
As Raza tells the story today, his boss insisted on building a fab in Dresden, Germany, over Raza’s objections. (That fab, which still operates today as part of AMD spin-off GlobalFoundries, was completed in the spring of 2000.)
“The trouble in the entire economic model was that AMD did not have enough capital to be able to fund fabs the way they were funding fabs,” Raza said. “The point at which I had my final conflict was that [Sanders] started the process of building a new fab with borrowed money prematurely. We didn’t need a fab for at least another year. If we had done it a year later, we would have accumulated enough profits to afford the fab in Germany. He laid the foundation for a fundamentally inefficient capital structure that AMD never recovered from. I told him: don’t do it. I put the [purchase orders] on hold. He didn’t tell me and accelerated the entire process.”
Both Raza and Barton recalled, independently of one another, one of Sanders’ mantras: “Real men have fabs.” Raza called this comment “simultaneously a sexist remark and the most stupid thing you can say,” and he saw the fab decision as one of Sanders’ “significant acts of irresponsibility.” After he quit, Raza never spoke to Sanders again.
So that’s very much what you get when you have a Big Innovator at the helm of a company. It’s exciting. It’s erratic. There will be periods of great booms followed by periods of great busts. It’s all or nothing. It’s ultimately very frustrating for everyone involved because there’s a feeling of “what could have been.”
To be clear, all entrepreneurs have a high drive to Produce and Innovate. The great entrepreneurs — the Andrew Groves (who Sanders was never able to beat), the Jeff Bezos, the Jim Sinegals of the world — find ways to complement their strengths and create focused, sustainable enterprises that meet changing customers’ needs over time. That’s the key to greatness.
You can apply the lessons of this article in a number of ways:
1) Many VCs make the mistake of ousting the founder because he or she appears immature or uncontrollable. But unless the founder truly can’t evolve, this is a critical mistake. It’s no coincidence that the world’s greatest organizations have a founder who thrives in the CEO role and has to be taken out on a stretcher. It’s not because these were extra-special founders. It’s because these founders were able to harness their Innovating force to make it constructive and not destructive. Put another way, they were able to complement their strengths with co-founders, leaders, processes, and systems that allowed them to be Innovators and respond artfully to market dynamics without succumbing to being Big Innovators who can’t get out of their own way.
2) When you’re being “sold” by a Big Innovator, recognize that it’s going to be 99% enthusiasm, 1% reality, and absolutely no appreciation for the details involved. It’s no coincidence that AMD customer service was atrocious. Customers to a Big Innovator are not the lifeblood of the organization but are just a minor inconvenience, a pesky detail to be managed in order to realize the vision.
3) It takes a team to be successful. Big Innovators are so charismatic that they can seem to steal the limelight from everyone else. But if you look deeper into organizations that are truly market leaders, you’ll see that the charismatic founder who gets all the press and media accolades is complemented by a co-founder or partner who brings stability and unification to the system: i.e., Mr. Outside and Mr. Inside. As with any marriage, one without the other is a failure. Both together can succeed.
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I really appreciate the framework of the Lean Startup approach and I’m a big fan of the movement. One thing I notice that’s missing from it is a discussion on the lifecycle stages of the customers that the lean startup should be targeting/getting feedback from. Here’s what I mean:
The Product Lifecycle goes like this: Pilot it, Nail it, Scale it, Milk it, Kill it.
The Market Lifecycle of customer types goes like this: Innovators, Early Adopters, Early Majority, Late Majority/Laggards.
In order to navigate from the temporary organization of a startup, find the business model, and scale it, the disruptive entrepreneur should seek to align this sequence of steps together. I.e., Pilot it for Innovator Customers. Nail it for Early Adopters. Scale it for the Early Majority, and Milk it for the Late Majority/Laggards like this:
Put another way, you DON’T want to be Piloting a project for a Late Majority/Laggard clients or misaligning the other stages. Why not? Because those Late Majority/Laggard clients are old and stable. They are outstanding at telling the entrepreneur what the market needs now (or 5 years ago) but tend to be incapable of identifying where it’s going to be 5 years from now. To find that out, you have to go to the fringe — those Innovator and Early Adopter Clients that aren’t currently served by the status quo. That’s where the true disruption lies.
Late Majority/Laggard clients also have a vested interest in maintaing the status quo. So even if the entrepreneur has a visionary champion within that Late Majority/Laggard client, he or she is going to be blocked by the surrounding inertia within that large, stable organization. The Late Majority/Laggard client is also subjected to broad market forces and quarterly financial targets that may require it to shift directions. So even promises of “yes, build this for us at this price and we’ll roll it out to our distribution network” aren’t worth the email they were written on when market forces change.
A great example of this principle in action is Square, a great disruptive force in the mobile payments space. Notice that Square DID NOT go to Visa, Mastercard, and Paypal to find the initial product market fit. They went to taco truck vendors, independent artists, and others SOHO’s who were NOT served by the status quo. If CEO Jack Dorsey did go to Visa or Pay Pal to practice the Lean Startup methodology and find the product market fit, he would have gotten great product specs to support the current payments model — but not to disrupt it. I’ve written about this in detail here.
The Real Purpose of the Lean Startup Methodology
Those of you who have read my Part III of my book Organizational Physics — The Science of Growing a Business already know that what the Lean Startup or customer-driven development approaches are really trying to do is to help the entrepreneur and the start-up business unit go as far as possible from the start of quadrant 1 (Pilot it for Innovators) to the top of quadrant 2 (Nail it for Early Adopters) by interviewing, researching, and selling customers in advance before the product development process begins.
In other words, customer-driven development tries to limit the cost, risk, and time investment of making poor product or market decisions between the Pilot It and Nail It stages. They are looking for a good product/market fit before the development process begins. If they can discover what the thought leaders really value and what the early adopters’ true spending priorities are before development begins, this lowers the risk and increases the probability of meeting those needs. Development can become more focused and demand is established before any real money is spent on development.
Agile software development is a product development method that aligns very closely with a customer-driven philosophy. Agile, or iterative, development is a process of taking real-time data from actual use of the product and quickly iterating changes using short release cycles to develop a better product that meets the needs of target customers. Fundamentally, agile is a product development method that attempts to better manage changing requirements; avoid long release cycles; and produce live, working, tested software that has real business value. In an early-stage startup, using an agile approach can help a company quickly and cost-effectively navigate the Pilot It to Nail It stages by eliminating the guesswork, long product release cycles, and overhead involved in trying to do a big product design up front. In larger companies with existing products in scale mode, using agile is an attempt to better meet user requirements, based on data and customer feedback, and to turn that knowledge more quickly into new product features and extensions.
Having built several successful high-tech products and run agile development teams, I can say that I am a big fan and believer in both approaches. They go hand in hand. Their real but unstated goal is to help a company navigate up the path to prosperity more quickly and cost-effectively. These approaches can help verify that your thinking is sound, that demand is there and you’ve uncovered a proven market opportunity. Additionally, having evidence that your entrepreneurial vision is baked in the cold, hard light of reality can make all the difference in raising the capital you need. These are sound methods and they fit perfectly well into the strategy lifecycle scheme.
The truth is that there are many other methods that can also help you quickly navigate the path to prosperity. Customer-driven can work. So can vision-driven. For example, I don’t believe Steve Jobs had ever done a day of interviewing customers in his entire life. Instead, he had that rare ability to envision something entirely new, intuitively understand the needs of his target customers even before they did, and bring his vision to the world in surprising and beautiful ways. No external customer-driven development of the iPad would have worked because customers would have had no frame of reference for it. Walt Disney was the same way. He had a powerful vision and followed his own instincts about what families really valued that wasn’t being provided by other amusement parks at the time. He created magical experiences that no one was expecting. The point is that there are many ways to develop a product but the fundamentals of strategy should always the same: You must go the long way around the path and create the product/market fit in the right sequence.
I hope this helps with your thinking as you contemplate how the Lean Startup meme will play out in your own organization.
I came across a phenomenal obituary written for Frosty Westering by Chuck Culpepper at Sports on Earth today.
Frosty was the football coach for the Division III Pacific Lutheran football team and he was remarkable. He coached for over 32 seasons without a losing record in any. He never mentioned playoffs or titles to his players but won four national championships and four runner-up finishes on two levels. He died on Friday at age 85 surrounded by a loving family.
Tears welled up in my eyes and my throat got caught when I read it. I want to share this story about Frosty for that reason alone. But I also want to share it because it’s a wonderful portrait of a strong Unifier leadership style in action.
The Unifier style is one of four management style dimensions that we all possess to one degree or another. You can read more about these styles: Producer, Stabilizer, Innovator, and Unifier in Part II of my book Organizational Physics: The Science of Growing a Business.
Our best Unifier qualities are our ability to create rapport, understand and motivate others, build cohesive teams, and create sound organizational cultures based on caring, empathy, and loyalty. Without the Unifier force, we would have no ability to respond to change efficiently because the organization couldn’t act as a whole.
Let’s see how the Unifier force shows up in coach Frosty’s leadership style so that you can learn to recognize it, develop it, and manage it in your own life and work:
His players implored him to belly-flop into a California hotel pool, and he complied – at age 75. He once took a running plunge into the mud during a soppy game in Oregon. He adored when players pulled pranks on him, insisted players use his first name – Frosty! – and corrected them if they used “Coach.”
He sometimes halted practice to have players spend five minutes gazing beyond the giant evergreens to Mount Rainier. He sometimes halted practice to have players go to other sporting fields and cheer on, say, the soccer team. He always halted two-a-day practices in August and instructed players to go help freshmen move into dormitories.
He believed deeply in singing. His players sang before games, after games. Sometimes they sang to the mock direction of the coach’s cane. Always they learned to sing without embarrassment, for it had become uncool to refrain from the refrains. For his 300th win in September 2003, an offensive lineman led the team in James Taylor’s “Steamroller.” During warmups for the NCAA Division III national championship game in December 1999, right there on the field in Virginia, his players sang “The Twelve Days of Christmas,” then proceeded to win 42-13.
Can you imagine warming up on the other side, then losing 42-13 to that?
During three of the best days of my career — those in his company, in Tacoma, Wash., in 2003 — he requested that I join his players for supper in their dining hall. Three of them drove me, in a pickup truck, back to my car. Along the way, they sang “Leaving on a Jet Plane.”
“Why singing?” I asked the coach.
“When you sing,” he said, “your consciousness is raised.”
The Unifier style loves to laugh, have a great time, create “story” moments, and keep the group structure flat and inclusive. I love the focus on singing as a form of culture reinforcement. It’s brilliant.
And lest you think this guy some Left Coast flake, let me hurl at you this biographical detail: former drill instructor, United States Marine Corps.
What this tells me is that Frosty was indoctrinated in a Producer/Stabilizer style in the Marine Corps. Most likely, he found this lacking in the development of full human potential and therefore embodied a leadership style that transcended that. I have no doubt that Frosty could turn on the Producer/Stabilizer hard-ass if he needed to but that he found an alternative way to coach a football team and develop young leaders.
An airline pilot wrote to the university president. He wrote because the Pacific Lutheran presence on his airplane had taken a routine day and whipped it up into memorable. He wrote because Westering insisted his players respect other people’s work. He wrote because that respect included rapt attention to the flight attendants, which in turn included a phenomenal sound that came when the players clicked their seat belts in unison.
He wrote because at the destination gate, the college football players had held back and lined up on two sides in a “go” tunnel so they could give high-fives to disembarking crew.
A janitor wrote to the university president. He wrote because when he came upon Pacific Lutheran’s visiting locker room one postgame in Portland, he found the chairs lined up in impeccable order. He wrote because he found the floors and lockers completely free of the normal detritus. He found the place just about spotless.
He wrote because, when he arrived in the room, he found a note on the whiteboard suggesting he go home and join his wife by the Christmas tree.
Wow. The focus on empathizing and respecting others is a true Unifier trait. I love how Frosty’s consistency in message and tone unlocked the creativity of the team in how that gets expressed. Can you imagine what a positively memorable experience the flight attendants and the janitor had? Amazing.
A man in a wheelchair came to the “Afterglow,” a Westering postgame concoction where a few hundred players, coaches and fans would gather in the bleachers. They might discuss the game. Players might thank the fans for support. Fans might thank the players for inspiration. Everyone would sing “Happy Birthday” to anyone with a birthday nigh. The “Afterglow” would happen after wins, but — oh yes — the “Afterglow” would happen also after losses, because in Westering’s mind, losing meant you had just completed the privilege of playing.
On a weekday after the “Afterglow,” Westering happened upon the man in the wheelchair and invited him to practice. Soon after that, he made the man an assistant coach, and so John Nelson, a quadriplegic Singaporean-American born with a debilitating condition and spinal-cord problems, came to head up the freshmen players. And they, in turn, had to take on responsibilities for his care: dressing him, helping him eat, helping him go to the bathroom. Do you suppose that taught them anything?
By 2003, Nelson had lost count of the times he had appeared as a groomsman in the weddings of former players, reckoning the number beyond 10. He told of a road trip stop at Disneyland when the players determined he should take a ride, so one player hugged him all the way through. During those three days I spent with the team in 2003 Nelson said to me, “There’s a reason for this, a reason for the guys coming out to this program, to see somebody who’s different. Hopefully, it inspires them. If someone in public needs help, I’m sure they will be comfortable with helping them.”
Doctors thought Nelson would have trouble making 30. By 2003, he had made 38. By his death in 2009, he had made 44. At his memorial service, Frosty placed a jersey on his wheelchair.
Notice the Unifier’s focus and pride on being part of the team vs. the focus on winning at all costs? Notice too that the Unifier extends the definition of “team” out to all the stakeholders?
Westering had such stern rules. His players had to help up opponents during games on the premise that the privilege of playing could not occur without opponents. Troublemakers didn’t have to run sprints; no, they were denied the “honor” of running. He knew fear could motivate but thought love could motivate for longer, so players badly in need of upbraiding – of putdowns – would receive what Frosty called “put-ups,” and he mandated six put-ups per day.
One put-up, “Attaway” – a configuration of “That a way” – became a staple. He had players use it prolifically, including toward hotel clerks, short-order cooks, fast-food clerks, custodial staffs, flight crews. They used it one day at practice after Frosty had some women’s volleyball players address the team about their recent and difficult victory over Puget Sound.
The reason Frosty’s Unifier style can be effective is that he backs it up with the Stabilizing force. Rules, norms, and expectations are set, clear, and reinforced. If Frosty didn’t have these elements in place, he’d be all talk, and without resulting in corresponding action in the team. Instead of being a highly successful football coach, he’d be out of a job.
In a football world chockablock with practices planned to the minute if not the second, Frosty’s practices carried a decided imprecision. His son and coaching successor Scott said that, to his knowledge, his father had never written a practice plan. One day he had me address the team, impromptu. Sometimes he’d serve popsicles, with root beer one flavor during my visit. Wet days might enable frolicsome sliding contests. Meetings never started on time, and Frosty’s penchant for hazy punctuality proved so entrenched that Donna, his wife and the mother of their five children, found an “ish” clock with the suffix “ish” beside each number and placed it on their kitchen wall.
Said Donna, one day on the phone, “In fact, it’s five after 2-ish right now.”
Classic Unifier again. No real plan. Go with the flow. Time is flexible. But keep it fun. Mix it up.
Players never wore full gear until game days, then would suit up on Saturdays, sing (of course), maybe even listen to some music professor Frosty had invited to play drums for them on an upside-down bowl and plastic pitcher. Then the whistle would blow, the kickoff would go up, and players would tell of this astonishing transformation into hard, hard hitting — replete with helping up the people they’d hit.
Then again, one day in September 2003 the quarterback came to the sideline on fourth-and-12 and said, “Let’s go for it,” whereupon Frosty said, “You’re kidding,” whereupon a small gaggle of players agreed with the quarterback, whereupon Frosty said, “Let’s do it, then,” whereupon Pacific Lutheran converted the first.
Football players by nature thrive on physical challenges and hard hits. That cultural trait is there. Frosty knew that and didn’t have to coach it much. Unifiers also don’t mind when others make decisions, as long as it doesn’t threaten the harmony of the group.
Seasons would begin with a three-day getaway in which players bonded, played games but not football, apologized for any insufficient effort the prior season and sang, sang, sang, the freshmen standing on chairs and singing their high school fight songs unless they could not remember them, in which case they got stuck with “Twinkle, Twinkle Little Star.” Seasons would end the way almost all seasons everywhere end, with a loss, but with a way almost no seasons end, with an “Afterglow.” Or they ended with a win and an “Afterglow.”
Notice that the harmony of the group and respect for the individual transcends all else. That’s a Unifier.
And when players’ careers ended, the graduates sprinkled over much of the Northwest, some in coaching. One helped run a car dealership where they took time to behold Mount Rainier and they declined an applicant after a job interview in which the applicant told of being a No. 1 salesman, because they thought he had missed the point of it all.
Their former coach always bought used cars, so he drove me to the dining hall in his 1993 blue Oldsmobile. When he left one day for a speaking engagement, he offered me the use of his small office, which surely meant he wasn’t cheating. And when I returned to New York, a dear friend who does not follow college football but who read my story said something simple, but said it with an inflection that made it ring in my head for good.
“He’s a great man,” my friend said. A great man died on Friday. A great man also lived from 1927 until Friday, and while he lived, oh boy, was he alive.
I couldn’t agree more. You can apply the lessons of this article in a number of ways.
1) Learn to spot and identify Unifier characteristics. Even if these characteristics aren’t really your style, you still want to have strong Unifiers on your teams. Unifiers help bring the group together, resolve conflicts, and lighten things up. Who are the Unifiers in your culture and how can you place them into positions where they thrive?
2) Winning is a byproduct of many things, not least of which is the feeling of transcendence that results from being a part of something larger than yourself. Coach Frosty really demonstrated this powerfully. How can you create the experience of transcendence in your own culture?
3) It’s not the destination but the journey. Don’t you love how Frosty frequently took time out from the daily grind to look at the beauty of the mountains, to visit other teams and cheer them on, and to bask in the Afterglow? How can you show enough confidence in your own team and progress to do the same?
I never met Frosty but I sure wish I had the chance to play for him. I’m confident that the lessons would have served me really well in my life and work.
Blessings to the Westering family during this transition.
I lost 35 pounds and several sizes in three months. I didn’t do it by dieting. I did it by changing the way I eat. There’s a difference.
What led me to this was thinking about my health in a whole new way. After trying to navigate large amounts of conflicting nutritional information and trying on new diets over the years (many of you can relate), I had an insight based on the Organizational Physics principles I teach every day.
I took the Universal Success Formula from Chapter 1 of my book Organizational Physics: The Science of Growing a Business and made a slight modification to the terms. The original formula looks like this:
If you’re new to the Universal Success Formula, all you need to know is that any system is acted upon by entropy and will eventually fail unless new energy is added to the system. Once you decrease entropy, the energy available for integration and success increases.
For example, imagine that you have a friend in the hospital. He can’t go out in the world and be successful (high integration) because most of his available energy has to go towards healing his illness (entropy). Once he recovers, entropy will be lower and he’ll have more energy to re-integrate into the world and thrive.
Applying the same concepts to health and diet, the Universal Success Formula can be worded like this:
Think of your health as a highly organized system — body and mind — which is acted upon by entropy over time and fails unless it continues to have new energy sources that you can assimilate. Entropy, in this case, can mean inflammation, congestion, and any other state of less-than-optimal functioning in the body. Vitality is synonymous with integration. It is a state of high energy in which you are thriving in relationship with your environment, continuing to obtain energy from it. When inflammation-related entropy is high, for example, it’s harder to convert new energy sources and vitality is naturally lower.
Put another way, at any given point in time, the body/mind has a finite amount of energy. It must get new energy or fuel from external sources. Food is fuel. Water is fuel. Thought is fuel. Relationships are fuel.
Good fuels are those that the body/mind can easily convert into new energy and that don’t increase entropy in the system. Bad fuels are those that the body and mind can’t convert easily, increasing entropy over time. Like a car with too much gunk in the fuel lines, your body just can’t drive as efficiently. The bottom line is that you want to utilize good fuel sources that don’t cause systemic harm (i.e., increase entropy) and are easy to convert into new energy.
Using this formula as a metaphor, I simply began to assess how foods impacted my energy level and which ones seemed to be contributing to inflammation in my body. When did my blood sugar shoot up or bottom out? When did allergies seem to strike? When did I feel more moody or unusually tired? In this process of trial and error, I also relied on expert opinions about which foods cause inflammation and which ones don’t, using these opinions as suggestions for exploring what works best for me.
I made a 30-day commitment to cut out inflammatory foods. For me, this meant eliminating all grains, sugar, and refined anything. Please note I’m not saying that’s what you should do. Health and diet are a very personal thing. There’s no one-size-fits-all. What I’m saying is that, if you want better health and fitness, you’ll want to eliminate any sources of high entropy from the system and increase your body’s access to good fuels. Period. You can start with expert opinions, but you’ll want to closely observe, first-hand, what works and doesn’t work for you.
In my own journey, after 30 days, I felt great. I had lost some weight and especially a lot of puffiness in my face and waist. I decided to keep going, continuing to pay attention to those things that cause inflammation and eliminating them. It’s now been 5 months and I’m still going strong. It no longer feels like a diet but a new way of living that has increased my vitality and become second nature to me.
I hope this perspective helps you tune in and amp up your own personal journey to health and wellness as well, wherever that path may lead you.
There is a growing body of evidence that points to chronic, low-grade inflammation as a kind of a “unified field” explanation of disease. That is, some researchers now believe that low-grade inflammation is associated with everything from Alzheimer’s and arthritis to diabetes and heart disease, and may even be the cause of most chronic diseases.
If you’re interested in supporting evidence that inflammation is the enemy of good health, you might take a look some sources that I found helpful:
- Why You Get Fat (3-minute video and I’m ashamed to admit I didn’t know this 30 years ago)
- Genetic Roulette (documentary on how GMOs cause increased inflammation).
- The No-Grain Diet (I read this book 4 or 5 years ago but didn’t have the wherewithal to follow it. Making the connection between entropy and inflammation finally helped me commit to change and it was surprisingly easy. Go figure.)
Simon Sinek is the author of Start with Why and the creator of concept he calls “The Golden Circle.” The Ted Talk he gave on the topic is incredibly popular, almost 10 million views as I write this.
The concept of the Golden Circle is simple. It looks like this:
Sinek purports that great organizations seem to create their foundation by first addressing Why they exist, then How they go about their mission, and then finally, What they do.
Let me say first that I really appreciate what Sinek is doing — inspiring leaders to think about the soulful calling of their organizations and to rally others to a bigger cause beyond just selling widgets. And he does a masterful job of calling out that people don’t buy what you do, they buy why you do it, and that it’s critical to attract customers who believe what you believe. Awesome.
However, the truth is that great organizations build their core ideology by first defining and reinforcing Who they serve and the customer problem or need that they solve in the marketplace. Then they address and reinforce Why they exist, then How they go about their mission, and finally What they do.
So a modified more accurate Golden Circle should really be drawn like this:
How do I know? Two reasons:
1) A business doesn’t exist to promote its beliefs. It exists to produce results for its customers (Who it serves). Understanding who your customer really is and the problem or pain they seek to solve is what differentiates a company in the marketplace and keeps it focused on the highest goal — creating customers.
It’s an easy trap to fall into. You get so caught up in your own beliefs — how you think the world should be versus how it really is — that you lose sight of who your customer is and the pain point that they really want solved. That’s why you exist. To solve a need in the marketplace. If you’re not solving needs, then you’re quickly going to go out of business regardless of how inspiring your vision statement is.
2) Leading with Who is what also allows the business to successfully navigate what in his Ted Talk Sinek calls the “Law of Innovation Diffusion.” This law is a term used to describe how innovations spread in the marketplace through a series of unique stages of customer groups. It tends to be depicted in a bell curve like this:
Here again Who is most important. By focusing on the Who you serve, it allows you to understand which customer segment you’re selling to at any given time and to refine/adapt your solutions to meet those customer needs over time.
Knowing which type of customer to pay attention to, and when, also allows you to anticipate and respond to changes in the marketplace and successfully drive new innovations forward. I explain how to do this in detail in Part III of my book: Organizational Physics – The Science of Growing a Business.)
I think Sinek realizes that great organizations begin with Who too. For example, when he says that Tivo should have led their branding with this, “If you’re a person who values having total control of your life, then you’ll love our product”. He’s really calling out the power of starting with Who. Also, his example of Martin Luther King also supports the notion of leading with Who. “I have a dream that all men are created equal.” Dr. King is also focusing on the Who first. Finally, the ultimate point Sinek is trying to make is that people buy what they believe (Who), not what you believe.
To sum up: The reason that your organization should build its foundation on Who is that every business exist to serve the needs of other individuals and organizations in the marketplace, who. Bring “who you serve and the problem or need that you solve” to the forefront of your organization’s consciousness. By doing so, you focus organizational efforts on the most important thing – meeting customer needs – and by monitoring and adapting to those needs, you cause the organization to adapt and innovate over time. And as Sinek points out so well, you must marry the Who with a powerful Why — a set of internal beliefs that all of your marketing and communications flow from within the organization to outside in the world. Think Who. Then Why, How, and What.
B = f(P,E)
It means this: An individual’s Behavior is a function of that Person’s personality, capabilities, training, experience, etc. and his/her existing Environment.
Makes sense, right?
So what’s the problem? The problem is that most management thinking today seems to have totally forgotten the critical importance of the surrounding environment when it comes to performance management.
Businesses measure and invest tons of money in individual training and skill development. They study and implement crafty new performance incentive programs. They run personality profile tests — all that crap.
But what great organizations do differently compared to the rest is they give equal attention to the inner structure, processes, and core ideology (i.e., the environment) of the organization itself.
The truth is that each of us is governed by the environment in which we live and work. If the surrounding environment is designed well, then a C player is going to look and perform like a B+ player. And if the surrounding environment and opportunity is top-notch, then A players are going to flock to that organization to apply their talents. The corollary is that if the surrounding environment is designed poorly, then even A players are going to show up like C players.
Let me give two examples to drive this point home. One from a famous and controversial study at Stanford and the other from the NFL.
The Stanford Prison ExperimentThis famous study conducted at Stanford University in 1971 tried to answer the question, “what happens when you put good people in an evil place? Does humanity win over evil, or does evil triumph?” by designing a mock prison experience.
The answer they found is that the environment controls behavior. In fact, the planned two-week investigation into the psychology of prison life had to be ended prematurely after only six days because of what the situation was doing to the college students who participated. In only a few days, the guards became sadistic and the prisoners became depressed and showed signs of extreme stress.
This study is controversial due to a lack of controls and an accused generalization of the results. When the BBC tried to partially replicate the same study, what they found was the importance of leadership in acting as a counterweight against the force of tyranny. That is, a strong and noble leader can make the surrounding environment less destructive.
From my perspective, leadership is critical in setting the right environment. In fact, the entire purpose of leadership is to design the system so that it works well for all concerned and is resilient against tyranny and bureaucracy. Leaders create the environment and the environment shapes the people.
The New England PatriotsOn the lighter side, my favorite football team is the New England Patriots. Why? Because under head coach Bill Belichick, they’ve embodied what it means to create and reinforce a system of performance by focusing equally on player development and creating the right surrounding environment. In fact, if you want to read a great book on a systematic approach to management, read War Room: The Legacy of Bill Belichick and the Art of Building the Perfect Team.
Just notice how most unsuccessful NFL teams seem to jump from one big free agent signing after the other but fail to make the leap to the next level. Using Kurt Lewin’s formula above, these loser teams confuse the P with the E. But teams like the Patriots, on the other hand, are always first designing and redesigning their system and philosophy and then look for players who can fill a role within that system and philosophy. It’s an equal recognition of the importance of both P and E.
The same is true for your business. Spend as much time in designing the right environment as you do in recruiting and developing the right people and you’ll double your chances of success.
I read Who Moved My Cheese for Kids to my 9-year-old son recently. It’s a fun little book, based on the eponymous bestseller, about four characters who live in a ‘maze’ and look for ‘cheese’ to nourish them and make them happy. You probably know how the story goes already (it was a bestseller) but if not, or you’ve forgotten, here’s a quick synopsis:
Two of the characters are mice named Sniff and Scurry and two are littlepeople – beings the size of mice who look and act a lot like people. Their names are Hem and Haw. The ‘cheese’ is a metaphor for what you want to have in life – whether it’s a good job, a loving relationship, money, possessions, health, or peace of mind. The ‘maze’ is where you look for what you want – the organization you work in, or the family or community you live in.
In the story, the characters are faced with unexpected change. Eventually, one of the littlepeople deals with it successfully, and writes what he has learned from his experience on the maze walls. When you come to see the handwriting on the wall you can discover for yourself how to deal with change, so that you enjoy less stress and more success (however you define it) in your work and life.
There’s a lot of truth in the book and I thought it would be fun to relate the four characters to the four PSIU forces of Organizational Physics. That way, the next time you’re managing a Hem, Haw, Sniff, or Scurry, you’ll have a better sense for how to handle it.
As a refresher, here’s a matrix that shows the traits of the four universal PSIU forces. If this concept is new to you, you can quickly get a sense of it using the world’s fastest personality test (it takes less than 15 seconds to get a good sense of someone’s style).
And here are the four Who Moved My Cheese characters mapped to each force:
In a nutshell:
- Sniff is an Innovator style. He’s got the ability to sense and respond to changes happening in the environment much more quickly than the other styles. He gets excited about creating new things and likes you to get excited with him.
- Scurry is a Producer style. He’s got the ability to run, run, run and do the work from early to late. He gets frustrated when there are obstacles in his path and seeks to run around them or punch through them.
- Hem is a Stabilizer style. He’s got the ability to make things systematized and controllable. In the story, it is Hem who gets left behind because change can be seen as a really big threat to someone who excels at control and stability.
- Haw is a Unifier style. He’s got the ability to empathize and connect well with others. In the story, it is Haw who follows Sniff and Scurry but all the while is concerned about where Hem is and how Hem is doing. Ultimately, Haw leaves the writing on the wall for others like Hem to follow.
The main thing I want you to take away is that the four PSIU foces of Organizational Physics are universal. That means they show up in good children’s books and the board room alike. When you learn to spot and understand them, you exponentially increase your own capabilities as a communicator and manager.
The second thing that I want you to take away is that, just as in the story Who Moved My Cheese, the correct approach to managing change is to be on the right side of the matrix above. The Producer and Innovator are both lean-forward styles who excel at sniffing out change and scurrying to make it work in their favor. You too should lean into change rather than lean away from it.
The third thing that I want you to take away isn’t in the story. It’s that the left side of the matrix, the Stabilizer and Unifier, also bring incredible value to the table. They help to make things systematized and efficient and care for others while helping to keep everyone working well as a team.
It takes a complementary team to manage and respond to change. One side without the other is doomed to fail. In other words, all sides — all forces — working in concert towards a common goal are what makes “finding the cheese” truly fun and sustainable over time.
Instead of thinking that your leadership role means having power over others, think instead of having power with others. Put another way, the order shouldn’t be given by you to them but should come from a shared awareness of the situation itself.
For example, let’s say that you just got word that your company is about to lose a big deal in NYC. You’re the CEO and you’ve called a meeting with the VP of Sales.
The VP of Sales comes into your office and you bark out an order, “Get on a plane to NYC and save that deal. Go!!”
Fast? Yes. Effective? No.
Why isn’t that effective? Because every time you issue an order to someone, you deplete your reserve of authority and you also deplete their reserve of power. Let me explain.
Authority is the authorized right to say “yes” and “no” to something. Clearly, a boss has more authority than their subordinates. But like an artesian well with a fixed amount of water, each time the boss draws upon his or her authority, they take some water from the well. If they keep being “bossy” and playing the authority card, that well will soon run dry and they won’t have any authority left at all.
For example, I have authority over my kids. But if I were to over-play the authority card and issue orders like, “Clean up your room because I’m in charge,” then I’m already doomed. My kids might listen to that once, maybe twice, but soon their reaction is going to be, “So what? You can’t make me. In fact, I think you’re an idiot.”
If I try to revert to even more authority, our relationship will deteriorate faster. I will be constantly issuing orders, following up, and feeling frustrated that those orders are not instantly followed. Thank you, but I prefer being happy and highly effective over being exhausted and unhappy.
Remember, each time you draw on authority, you lose a finite resource. So use it sparingly and only in emergencies.
The other thing that happens when orders get issued is the “orderee” feels a loss of power. Power is the ability to exercise self-determination and creativity, and to help or hinder a situation.
Here’s an example. Think of the last time you were issued an order by an authority figure. Your reaction might have easily been something like, “What a jerk! He’s not even seeing the situation clearly. If I were in charge…then I’d show him.”
Now whether you or the authority figure was right, or the orders were right, is not the point at all. The point is that, instead of thinking creatively and objectively about the problem and finding breakthrough solutions, you reacted negatively to the simple act of being given an order. You felt less powerful and, if you did follow through on the order, didn’t you do just enough to meet the letter of the law, without exercising your full creative power? I would venture to bet so.
Each time an order is given, both the order-giver and the order-taker lose. The order-giver loses authority and the order-taker loses power.
The right way to give an order is not to give an order at all. Instead, make sure that respective accountabilities are clear and then draw out the facts and viewpoints on the situation itself so that the former “order-taker” naturally creates and accepts his/her own order and follows through with self-determination and creativity.
Let’s go back to the pending loss of a big deal in NYC. Instead of an order like, “Get on a plane now!”, here is a mutually-respectful dialogue on the situation itself:
CEO: “I heard that we’re about to lose the big NYC deal. Is that true?”
VP Sales: “It’s 50/50. I just put in a call to our champion and she says it’s down to pricing.”
CEO: “What do you think we need to do to win the deal?”
VP Sales: “I’m not sure yet. I’m on a flight to NYC tonight to meet with them and figure out if it’s really a pricing issue or if that’s a red herring. I’ve got a meeting scheduled tomorrow morning with their decision makers.”
CEO: “Anything I can do to support you?”
VP Sales: “Yeah, can you put in a call to their Chairman and let them now how important this account is for us and how we’ll go the extra mile?”
CEO: “You got it. I’ll call him right after this and will let you know how it goes. Anything else?”
VP Sales: “No, just trust that I’m on it and will do my very best.”
CEO: “I know it. Keep me posted.”
It’s obviously a simple dialogue but the right spirit is there. Will they get the deal? Who knows. But their chances of getting the deal are significantly higher than if the CEO was barking orders. The VP of Sales feels her power intact and is thinking and acting in a creative and self-determined way, and the CEO isn’t depleting her authority to get it done.
Mary Parker Follett, one of the world’s pioneering management thinkers, said it perfectly back in 1924: “Leadership is not defined by the exercise of power, but by the capacity to increase the sense of power among those led.” It’s just as true now as it was then.
The next time you find yourself about to give an order, stop yourself. Instead, ensure that accountabilities are clear, assess the facts and viewpoints together, and allow the right order to flow from the situation itself.
One f-law in particular stands out for me as something that’s all too true. It’s about the tendency to measure and focus on the wrong things because they are easy to track.
Instead, what we should focus on — in business and in life — is identifying what it is that we truly do want, even if it’s hard to measure.
In a society that seems to excel at measuring and celebrating empty accomplishments, it’s a great f-law to keep top of mind:
“Managers who don’t know how to measure what they want settle for wanting what they can measure.
For example, those who want a high quality of work life but don’t know how to measure it, often settle for wanting a high standard of living because they can measure it. The tragedy is that they come to believe that quality of life and standard of living are the same thing. The fact is that further increases to an already high standard of living often reduce quality of life.
Unfortunately and similarly, the (unmeasurable) quality of products or services is taken to be proportional to their (measurable) price. The price of a product or service, however, is usually proportional to the cost of producing it, not to its quality; and this cost tends to be proportional to the relative incompetence of the organization that produces it.
Like economists, managers place no value on work they do not pay for because they can’t measure it. Work that has no quantifiable output includes some of the most important work that is done, for example, raising children and maintaining a home. On the other hand, economists place a high value on work that destroys value, because the cost of such work can be measured. Hence the paradox: a prolonged war is a very good way of raising gross national product but reducing quality of life.
When it comes to life goals it’s even more basic than that. Managers don’t know what they want because they never think about it. One executive told his psychotherapist he was depressed because he felt he wasn’t successful. To the therapist he looked successful: good job, great salary, lovely family and beautiful home.
She asked how he would know when he was successful. He couldn’t answer. He just kept on striving without knowing what he was striving for. But I agree that, if they get as far as measuring, the measurement is usually quantitative and limited to how much they earn. Certainly the more they earn and the more their standard of living rises the more their quality of life drops. They become trapped by golden handcuffs.
In the workplace it’s also true that managers will measure anything that can be quantified in order to be able to set targets. Training is a great example. Many companies measure numbers of days training and numbers of people trained. If the goal is to do lots of training then that’s a good measurement. But the goal ought to be to develop the workforce to become more skilled.
The best organizations explicitly develop employees to fulfil their potential and even advise them on finding jobs outside the organization, if that’s what it takes. Measuring skills is harder. It takes time and commitment and, often, the value of training cannot be quantified. How astonishing that such ‘input’ measures continue to be accepted as valid even though they are value-less.”
Data is for Q4 2012. See Asmyco.com for source and notes.
Two things that I love about this chart:
- First, it’s just a great visual representation. All data should be so beautiful.
- It reflects how Apple truly is an ecosystem company. Note that even though the revenue of hardware sales dwarfs the combined sales of digital services (i.e., music, apps, and software sales which are still huge in their own right), it is these digital services that extend the Apple ecosystem and make it large and vibrant. And of course, the larger and more vibrant the ecosystem, the more value it creates.
You can see the same “ecosystem economics” in another great brand — Amazon. Both Amazon and Apple are in the business of getting customers into their ecosystem by creating value to customers, and then consistently reducing the friction for new transactions to occur.
Once you buy a Kindle, or sign up for Amazon Prime, there’s very low friction for you to make future purchases (i.e, it’s easy for Amazon to extract new energy in the form of money, brand clout, and capabilities from its surrounding ecosystem). And just like a Lion prefers hunting grounds with lots of Antelope, the more digital services each brand offers, the more consumers desire to be a part of that ecosystem.
Keep this concept in the front of your mind when you’re scaling your own business — think in terms of creating ecosystem economics around a core value proposition where there’s low transaction friction and high customer engagement over time. Don’t be a product company. Be a systems company.
“It’s possible to rehabilitate large-scale damaged ecosystems.”
- John D. Liu
“Green Gold” is a film documentary about how farming cultures in Africa, Asia, and South America are reclaiming once fertile land from the desert. I’m inspired to share it for three very important reasons:
It’s a great synopsis of systems thinking in action. Small changes have big repercussions. Every action has an equal and opposite reaction… even continents away. And every part of the global system is interconnected and interdependent with the rest. Once you set up the ecosystem the right way, it organically grows, prospers, and flourishes over time. In the words of an expert interviewed in the film, “The world gets more and more complicated all the time, but the solutions to fix the world’s ecosystems remains relatively simple.” The same thing is true for your business growth. If it seems complicated, the solutions are simple. Be a systems thinker, eliminate entropy, apply the right force of change, know what steps to take next. Design your system or business so that it can scale organically…even without your direct involvement.
It’s a wonderful example of an individual leveraging his strengths and passions to solve a big problem in the world. The filmaker, John D. Liu, is one of the world’s foremost experts on ecosystem reconstruction. But guess what? By background, he’s just a contract documentary filmmaker. John has no formal training in ecology, biology, farming, or permaculture. He stumbled across a solution to the complex global problem of desertification. Seeing solutions that work and inspired to take action, he learned what he needed to learn while leveraging his talents of filmmaking and curiosity. This is a very powerful example of Your Genius Zone in action.
It inspires positive, concrete action in the face of accelerating climate change. According to the UN, some two billion people depend on ecosystems in dry land areas, 90% of whom live in developing countries. The scientific consensus is that the rate of desertification is increasing around the world. As this map shows, it’s a pretty big fucking deal:
So doesn’t it make sense to invest in restoring once vibrant ecosystems? The techniques are simple. The dividends are long-term and catalyze a positive impact on every aspect of society — food and water availability, renewed harmony with the land, quality of life – and act as a powerful counterweight to climate change. As they ask in the film, “If it’s possible to restore large-scale damaged ecosystems, then why don’t we do just that?”