Everything has a lifecycle. It is born, it grows, it ages, and it ultimately dies. It’s easy to spot a lifecycle in action everywhere you look. A person is born, grows, ages, and dies. So does a star, a tree, a bee, or a civilization. So does a company, a product, or a market. Everything has a lifecycle.

All lifecycles exist within a dynamic between system development and system stability. When something is born, it’s early in its development and it also has low stability. As it grows, both its development and stability increase until it matures. After that, its ability to develop diminishes over time while its stability keeps increasing over time. Finally, it becomes so stable that it ultimately dies and, at that moment, loses all stability too.

That’s the basics of all lifecycles. We can try to optimize the path or slow the effects of aging, but ultimately every system makes this progression. Of course, not all systems follow a bell curve like the picture above. Some might die a premature death. Others are a flash in the pan. A few live long and prosper. But from insects to stars and everything in between, we can say that everything comes into being, grows, matures, ages, and ultimately fades away. Such is life.

What do the principles of adaptation and lifecycles have to do with your business strategy? Everything. Just as a parent wouldn’t treat her child the same way if she’s three or thirty years old, you must treat your strategy differently depending on the lifecycle stage. And when it comes to your business strategy, there are actually three lifecycles you must manage. They are the product, market, and execution lifecycles.

• The product lifecycle refers to the assets you make available for sale.
• The market lifecycle refers to the type of customers to whom you sell.
• The execution lifecycle refers to your company’s ability to execute.

In order to execute on a successful strategy, the stages of all three lifecycles must be in close alignment with each other. If not, like a pyramid with one side out of balance, it will collapse on itself and your strategy will fail. Why? Because aligning the product, market, and execution lifecycles gives your business the greatest probability of getting new energy from the environment now and capitalizing on emerging growth opportunities in the future. (I discussed in a previous post that the goal of any strategy is to get new energy from the environment, now and in the future.) As you’ll see, aligning all three lifecycles also decreases your probability of making major strategic mistakes.

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Every potential business strategy has the same ultimate aim. This is true whether you are trying to sell your business, go IPO, enter a new market, raise venture capital, hire top-notch talent, fend off competitors, manage increasing regulations, win an industry award, or create the next hot startup. It doesn’t matter what the strategy is — the goal is always the same. This goal is also independent of time or context. It’s just as true in recessionary times as it is in boom times. It was true one million years ago and it will be true one million years from now. So what is this goal of strategy?

The ultimate goal of any strategy is to acquire new energy from the surrounding environment now and in the future.

The evidence for this comes from the most fundamental tenant of evolution: adaptation. Before we continue, let me clear something up about evolution. When most people think of evolution they think of Darwin. And when people think of Darwin, they usually recall the term “survival of the fittest.” However, Darwin himself never used that term. Well, that’s mostly true … Darwin only used the term late in his life to refute the notion that success goes to those most fit. Instead, what Darwin made clear is that survival (and prosperity for that matter) goes to those most adapted to their environment. If there’s good adaption or integration with the environment, then the species will flourish. But if the environment changes and the species can’t adapt, it will fail. That’s why you’re reading this – and not some brontosaurus.

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During one cold winter in Minnesota, I worked as a college intern for the mayor’s office in St. Paul. There are two things I still remember about the job. One, my twenty-year-old Toyota Corolla had a broken heater and so the commute from my apartment at the University of St. Thomas to downtown St. Paul felt like a prolonged, icy slap in the face.

The second thing I remember is how totally caught up in the political system everyone was at the mayor’s office – certainly the mayor, but also the assistants, wonks, and even the janitor. Politics at the mayor’s office — who’s doing what, who’s saying what, how the political winds are moving — was all encompassing.

For example, the state newspaper published an opinion piece about some mundane issue… I think it was the style of the new streetlights. If I hadn’t set foot in the mayor’s office, I would never have given this a moment’s thought. I’m sure the rest of the population didn’t care either. But in the mayor’s office, that article caused a flurry of activity, debate, and crisis management fit for a minor natural disaster. At least three, intense meetings were called to address the issue. I remember thinking, “What’s wrong with you all? Don’t you know that no one but you actually gives a shit?”

The same thing is true for any system – including your business, your family, and your life in general. When you’re standing inside the system, small things take on great significance. It’s only when you see them from outside the system that you can put them in the proper perspective. Some time ago, I ran a large affiliate marketing company. Looking back, I can easily see how caught up in that system I was. I lived and breathed affiliate marketing all the time. If some random affiliate in Hogeye, Indiana, wrote a critical review of my company on a 100-person affiliate blog, I would respond in full crisis mode, just like the mayor of St. Paul.

One of my favorite sayings is: “You can’t see the picture when you’re standing in it.” You first have to stand outside the system. If you’re going to respond to a “crisis” or attempt to change or improve the status quo, you’ll want to look at it with a fresh set of eyes and a bird’s eye view. If you try to change a system from within – therefore without seeing it as a comprehensive whole in an even larger context – you’ll simply perpetuate what’s already there.

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Imagine that one of your clients, who is also a good friend of yours, owes you a good amount of money. You have sent multiple bills, have casually reminded him, and even had an earnest conversation. From your perspective, he seems well off and able to honor his debt. What’s the right or moral thing to do?

Morality is a complex and challenging thing to understand. On the one hand, a society or family can’t function long without a shared moral code. We all support the social norms we believe to be right or just. On the other, we often fight against norms that silence our individual expression. In other words, no one likes to be on the other end of a sermon they didn’t request. In addition, what’s understood as right and wrong actually shifts over time and with changing conditions. Just ask your grandparents.

While the world loves to judge the rightness and wrongness of everything, most of us don’t think about morality too much, nor do we reflect on the nature of our decisions. When we do so, it’s usually motivated by a sense that our life is falling apart. Then we tale a step back, reflect, and seek to make a change. Whatever the change is, it usually involves the development of a new moral code or compass – a set of beliefs, actions, and choices that feel more in alignment with who we want to be – in the hope that our life becomes congruent once again.

If you do a quick scan around the world, you’ll find as many different views on morality as you do cultures. Among these you’ll find benevolent self-interest, the golden rule, the Ten Commandments, karma, a general feeling of right and wrong, the law of the land, the expectations of others, looking out for #1, obeying authority, making it up as you go, and any combination of the above.

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When you’re involved in making an important decision, do you rely on knowingness, analysis, or both?

I’ve been catching up with season four of the hit TV series Mad Men. One scene captured the difference between knowingness and analysis really well. In it, Don Draper, the creative veteran, is in an argument with a Dr. Faye Miller, a psychologist who specializes in researching why people make the decisions they do.

Dr. Miller has just conducted a focus group of young, single women to gather research on a skin care cream. As the women talk candidly, the conversation quickly turns to men and relationships. Dr. Miller’s conclusion is that the product should be positioned as a way to help young women find husbands. Her method is proven, scientific, and verifiable.

But Don Draper isn’t convinced at all. He argues that analysis can only capture what’s been known before. He tells her, “How do you know that’s the truth? A new idea is something they don’t know yet, so of course it’s not going to come up as an option. Put my campaign on TV for a year, then hold your focus group again, and then it will show up in the results.” Throughout the series, Don has proven himself to be a “knower.” When he gets an intuitive hit that the campaign is right, it usually is.

Although Mad Men is set fifty years in the past, I think it’s safe to say that an analysis-based, by-the-numbers approach has grown to permeate much of our culture. It’s prevalent in the standardized testing of our children, in the MBA programs of business schools, and in how we allocate dollars to everything from a new TV pilot (if the TV pilot doesn’t “test” well, it won’t get funded) to, like Mad Men, deciding on new product positioning and advertising.

The problem with an analysis-only approach is that it actually prevents discovery of something new. I recently heard an NPR interview with Malcolm Gladwell where he talks about an interesting psychological study that shows what happens when people have to justify a decision. (And yes, I’m relying on an analytical approach to convince you that relying on an analytical approach is a bad idea).

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Warren Buffett’s 2010 Annual Letter to Berkshire Hathaway shareholders was recently released. It’s as outstanding as ever and worth a read. There’s a footnote in the report about their hiring a new business manager that I really loved:

“When we issued a press release about Todd’s joining us, a number of commentators pointed out that he was ‘little-known’ and expressed puzzlement that we didn’t seek a ‘big-name.’ I wonder how many of them would have known of Lou in 1979, Ajit in 1985, or, for that matter, Charlie in 1959. Our goal was to find a 2-year-old Secretariat, not a 10-year-old Seabiscuit. (Whoops – that may not be the smartest metaphor for an 80-year-old CEO to use).”

The reason I loved this footnote is that I believe too many businesses make the mistake of consistently valuing past direct experience over transferable skills and upside potential.

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I met with the CEO of a fast-growing high tech company this week. This company (we’ll call it Company X) has grown from $100M to $400M over the past three years and plans to be a billion dollar business within the next three. We got together to discuss the challenges of keeping everyone in the company focused on the most important things. It’s a classic challenge. In fact, if you ask any leader of a fast-growing organization what are his or her three biggest challenges, you’ll hear “keeping everyone on the same page” as one of the top responses. How you help to do that is the subject of this article. And a powerful answer lies in the rule of three.

In the 4th century BC, Aristotle spoke about the rule of three – how the human mind tends to easily remember three things but forgets four or more. Every great communicator through the centuries has recognized and used the rule of three:

“Veni, Vidi, Vici” (I came, I saw, I conquered) – Julius Ceasar

“Friends, Romans, Countrymen” – William Shakespeare

“Life, liberty, happiness” – Thomas Jefferson

“Blood, sweat, and tears” – Winston Churchill

Notice too how common sayings are also often structured by the Rule of 3:

“Body, mind spirit”

“Tall, grande, venti”

“Learn your ABCs and 123s”

“Reduce, reuse, recycle”

“The 3 Rs – reading, writing, arithmetic”

Similarly, Company X has used the rule of three to help its staff focus on the most important things, as well as to recognize and stop work that isn’t focused on those things. Here’s how they did it.

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Two weeks ago, I switched newsletter providers to MailChimp. MailChimp is known as a low-cost SOHO email provider with cheeky humor and copious references to Ninjas.

Over the past few years, they’ve been getting a lot of buzz and customer goodwill. Curious to give them a try, I signed up, dropped my old provider, and hoped for a smooth transition. Setting up my campaign was straighforward. It’s when I pressed “Send” that the trouble started. The MailChimp interface promptly said: “Sending: Started at Jan 30, 2011 10:57 pm” — and there it hung for over an hour.

I re-queued the campaign and tried again. Same problem. Frustrated, I emailed their customer service. A day later, I received a response. The customer service rep politely informed me that they weren’t sure what was causing the problem and the development team would have to investigate. Two days later, I received another email saying the development team wasn’t sure what the problem was either, that they canceled the email in the queue, and that I should try again. Like Groundhog Day, I tried again and got the same problem.

Now feeling very frustrated, I jumped on Twitter and broadcast to the world, “Anyone else think that MailChimp sucks? I’ve been stuck in queue for 72 hours. Is it growing pains?” About 3 minutes later, I received a reply via Twitter from MailChimp. We traded tweets back and forth and they provided some basic diagnostics — all over again. When the problem couldn’t be solved, they asked me to contact customer service using “online chat perhaps?” Now fuming, but deciding to give it one more try, I hopped onto a MailChimp online chat.

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Good managers run their business by the numbers. But imagine for a moment that your business is Earth. As the manager, you’re responsible for hitting your quarterly and long-term targets. These include providing increasing levels of prosperity, health, and happiness for all of Earth’s inhabitants, managing the use of non-renewable resources, and ensuring that future generations of stakeholders thrive. You run the Q1 2011 dashboard report and here’s a scan of what you’re working with:

- The human population is forecasted to reach 9 billion, up from 6 billion in just forty years.
- The American middle class, once a driver for economic prosperity, is in rapid decline.
- More than 80% of sewage in developing countries is discharged untreated, polluting rivers, lakes, and water supplies.
- Antibiotic resistance is increasing, posing a major threat of new super diseases.
- Nearly 70% of the world’s fish stocks are depleted or over-exploited.
- The rate of species extinction is now 100-1,000 times greater than suggested by the fossil records before humans.
- The world is getting hotter, the ocean is 30% more acidic than 260 years ago, and extreme weather events are intensifying.

You stop reading, knowing that you could spend a lifetime just reviewing the statistics. Your own gut (something you’ve come to rely on as a good manager) also tells you something is off. Modern life just doesn’t seem that high functioning for most of those in your home country. Everyone has more technology, more pressure, but less overall happiness. It’s time to take action. What do you do?

Like any good manager, you take the stats and group them into a pattern. As you scan across the many sectors of the Earth’s man-made systems, you notice something suspicious. No matter what the sector – food, water, health, technology, government, finance, entertainment, trade – you notice a consistent trend. Everything follows the same pattern. It looks something like this:

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We all have conflicts with the people we work with. Some conflicts are constructive. They can lead to better decision making and faster implementation. Other conflicts are destructive. They cause entropy to rise and prevent work from getting done.

According to organizational development expert Dr. Ichak Adizes, while there are both an art and a science to managing and harnessing conflict, the fact is that every conflict is an expression of one (or a combination) of only three fundamental types¹. They are:

1. Conflict of Competing Interests
2. Conflict of Behavioral Styles
3. Conflict of Vision and Values

The next time you’re involved in a conflict, ask yourself, “Is this a conflict of interests, styles, or vision and values?” If you can begin to discern the underlying type of conflict you’re dealing with, this will improve your effectiveness in interpersonal relationships as well as your capabilities as a manager and leader.

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