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There are few things that will bring as much power and benefit to your personal and professional life as the practice of quietly appreciating the strengths of others.

To drive this point home, I’d like you to recall a time in your past when you weren’t accepted for who you are. Maybe this was within your family of origin, in a work setting, at school, or even on a sports team. C’mon, I know you have at least one period in your life like this. When was it?

From your vantage point today, wasn’t that experience exhausting? Didn’t you spend more time and energy worrying if you’d ever fit in than you did on working towards your goal? Didn’t that period in your life pretty much suck?

You’re not alone. A recent Gallup Research poll shows that employees who feel accepted by their managers and peers feel highly engaged in their jobs while those who get negative feedback (or even worse — are ignored all together) are actively disengaged:

Source: Gallup Research.

It doesn’t take a genius to realize that higher engagement leads to higher productivity, creativity, and job performance. When we don’t feel accepted for who we are and we don’t have the opportunity to play to our strengths, it costs us a tremendous amount of energy and saps our productivity and morale.

By the way, I think this experience is pretty common for entrepreneurs. Many of us felt like we didn’t fit into the existing structures and so we create our own. But that’s for another story.

Now I’d like you to imagine something different. You’re a fly on the wall at ACME Corp. ACME is an average-performing company with an average culture.

From your vantage point on the wall, you observe that, while everyone is professional and polite on the surface, they seem more focused on what’s happening within the company itself than in how to kick ass in the marketplace.

Specifically, you notice an undercurrent of subtle “shoulds” that the colleagues at ACME hold towards each other. True, nothing really damaging is said outright. It’s usually couched in language like this:

• “Sure, Sam is a visionary but he can’t manage his way out of a paper bag. He should be more detail-focused and a little less erratic.”
• “Sarah is a great programmer but she’s moody as hell and only works on what she wants to work on. She should be more of a team player.”
• “Yes, Mark is a good project manager but he’s not really in tune with where the market is headed. What we really need is break-out thinking.”
• “Linda is smart as a whip but she’s a bulldozer. I wish she were more aware of how she impacts those around her.”

Can you […]

“Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.”
– Peter Drucker

When was the last time you got away from the office to take a good, long look at the trends that will likely impact your business, customers, and suppliers in the next five years?

I’m willing to bet that it’s been too long. With so many pressing demands on your time, energy, and focus right now, it can feel nearly impossible to step away from the day-to-day and invest some serious thought cycles in what might happen over the long term.

Of course, you already know that the best leaders and executives do actually invest the time and energy in thinking about and anticipating the future, and they do so on a regular basis. You also know from experience that, when you do step away from the day-to-day to really think, it turns out to be time very well spent indeed.

So what should you be thinking about when you’re doing strategic planning? MBA programs have something called a PESTEL analysis for strategic planning. With it, you look at what’s happening in the Political, Economic, Social, Technological, Environmental, and Legal environments and how anticipated changes will impact your business, customers, and suppliers. I can’t argue that these are reasonable sectors to examine and reflect on when thinking about your strategy. However, the PESTEL analysis also totally misses the most important factor to address!

When doing strategic planning, the most important question to ask is this: “DEMAND: Will there be more or less demand for what we do five years from now?” This is the most important question because, as I explain in detail in the book Organizational Physics: The Science of Growing a Business the goal of every business is to align unique capabilities with growing market opportunities (you want to be in top right “Happy” quadrant below):

(If you want to learn more about this diagram and how to integrate it into your planning, see Part III, Chapter 9 of my book: Organizational Physics: The Science of Growing a Business).

Never Misread the Environment

The greatest mistake a leader can make is to misread the environment. The reasons are self-evident. If, in the future, there’s going to be less demand for what you do now, then you need to be acting on this now to steer yourself into a growing sector. If you can’t find a growth sector, it’s just a matter of time until there’s no business at all. Or, if the environment zigs to a new growth opportunity, but you’ve zagged the company in the other direction, you’re pretty much out of luck. The environment trumps all, so […]

The next time you notice yourself stuck in a rut — or any time you feel like you’re not experiencing sustained momentum towards your goals — ask yourself three important questions:

1) Am I certain this is what I want?
2) Am I expecting to get it?
3) Am I open to receiving it in new and unexpected ways?

I was reminded of these questions at a lecture I attended recently by Dr. Larkin of the Applied Neuroscience Institute. His talk was a reminder that, when you listen to and act on your inner answers to these questions, you can snap right out of a rut and get back on the road. Here’s why these questions are more powerful than you might think:

1) Am I certain this is what I want?

This is a big one. Do you really want this thing? If so, why? Oftentimes we find ourselves pursuing things because we think we have to, not because we really want to. You can’t fight against yourself, so stop trying. It just won’t work.

The hard part can be discerning what it is you truly want – and often feeling trapped by circumstances, or the belief that can’t have what you truly want. Neither of these is true. You know in your heart what it is you truly want (versus what your family, friends, the “experts,” or the media tell you to want). Ultimately, it’s a question of how clear you are on your true desire and how committed you are to making it happen. The key here is getting in touch with your higher-order goal.

Let me explain. For the past several weeks I’ve had a goal to do a dozen pre-recorded webinars. It’s been one frustrating circle jerk of incompletions.

First I wrote the scripts. Partially. Then I changed gears and started designing the power points. Again, only in part. Then I decided to hire a videographer to help me. Then I realized I wasn’t clear on my overall strategy so I canceled the shoot date (sorry for being such a futz, Jason Argyropoulos). Then I went down a rabbit’s hole designing a self-service SAAS model for the webinars to feed into. Incomplete. Let me tell you, being me for the past few weeks was exhausting. Start. Stop. Turn around. Confusion. Sigh. Rut.

I’ve been in this pattern enough times in my life to know what I needed to do. “OK, Lex, if I knew that I was supported perfectly, what is it that I truly would want?” My answer was: “I’d want three in-bound inquiries per week from people I’m excited to help.”

Now I don’t know if I can capture the difference adequately but the feeling I get between the low-order goal of “I want a dozen pre-recorded webinars” and the higher-order goal of “I want three […]

Over a decade ago, Jim Collins wrote a brilliant article Turning Goals into Results: The Power of Catalytic Mechanisms that is a must read for every CEO. It ties directly into one of the core tenets of Organizational Physics — take a systems approach to change…

“Most executives have a big, hairy, audacious goal. One dreams of making his brand more popular than Coke; another aspires to create the most lucrative Web site in cyberspace; yet another longs to see her organization act with the guts necessary to depose its arch rival. So, too, most executives ardently hope that their outsized goals will become a reality. To that end, they write vision statements, deliver speeches, and launch change initiatives. They devise complicated incentive programs, formalize rules and checklists, and pen policies and procedures. In other words, with the best intentions, they create layer upon layer of stultifying bureaucracy. Is it any surprise that their wildly ambitious dreams are seldom realized?

But companies don’t have to act that way. Over the past six years, I have observed and studied a simple yet extremely powerful managerial tool that helps organizations turn goals into results. I have recently codified it; I call it the catalytic mechanism. Catalytic mechanisms are the crucial link between objectives and performance; they are a galvanizing, nonbureaucratic means to turn one into the other. Put another way, catalytic mechanisms are to vision what the central elements of the U.S. Constitution are to the Declaration of Independence—devices that translate lofty aspirations into concrete reality. They make big, hairy, audacious goals reachable.”

Read the full article…

Yahoo is in the news this week because the board just hired Marissa Mayer away from Google to be its new CEO. Mayer, who by all reports is highly intelligent and creative, excels as a product visionary. Yet not surprisingly, short-term value investors are upset about this hire. This is because they want Yahoo to focus on cutting costs and milking the company for cash until a strategic buyer can be found. So who’s right and what’s the best strategy for Yahoo? Before I answer, let me explain how we can answer this question.

In Organizational Physics, we use a simple code called PSIU to tell what’s right, what’s wrong, and what to expect from situations or decisions. Like DNA, PSIU explains why things “show up” the way they do. It can be used to understand individual styles, analyze organizational design, and even to anticipate organizational problems well in advance of when they occur. PSIU can also be used to understand and design a business strategy in a simple, elegant, and effective way.

Effective strategy design starts with a simple premise. Play to your strengths. What is your organization exceptional at? Basically, a business can have a strategy that capitalizes on:

• Better customer service than its competitors (P)
• Cheaper costs than its competitors (S)
• Higher innovation than its competitors (I)
• Stronger organizational culture than its competitors (U)

No single company can be the best in all four. Why? Because any given strategy consumes finite time and energy. It’s expensive and time consuming to invest in any given track. Great companies recognize where they will place their focus and what they will sacrifice.

For example, Zappo’s focuses its strategy on having a stronger organizational culture (U) and providing better customer service (P) than its competitors. They’ve done a great job of using those strengths to their advantage so far. Can you get cheaper shoes (S) elsewhere? Yes!

Amazon (which owns Zappo’s and seems to allow it to operate autonomously), on the other hand, focuses on providing the lowest cost (S) possible and providing great customer service (P). Is Amazon an example of great organizational culture (U)? Not according to insiders.

Walmart excels at delivering cheaper costs (S) than the competition. But notice that Walmart doesn’t also focus on providing a personalized shopping experience (P) or showcasing the most innovative hot new fashions (I) like a small boutique store must do. Nor is it recognized for having a great organizational culture (U). You can’t be all things to all people. Don’t even try.

In order to make sacrifices to play your strengths, you must first and foremost understand what’s happening in the environment. What type of industry do you operate in? Is it growing or aging? Are your current strengths still relevant and will they be relevant […]

In his thought-provoking book The Genius of the Beast: A Radical Re-Vision of Capitalism (2010), author Howard Bloom introduces the concept that nature explores and consolidates information using fission-fusion strategies. Fission refers to splitting apart. Fusion refers to bringing together. According to Bloom, fission and fusion are relevant to human systems as well. In other words, they apply to both human individuals and organizations. This is a powerful metaphor and it’s also useful for looking at tendencies within your business. Beyond the level of scientific frameworks, these two metaphors can help you to better lead and manage your organization.

Organizational “fission” and “fusion” don’t happen at the same time. Like a heartbeat, they happen in a rhythm. In-out, in-out, in-out. If your business is demonstrating a lot of activity involved in making new discoveries and attempting to drive things forward, we can describe it as being in “fission” mode. If it’s digesting its discoveries and consolidating people around them, we can refer to this as “fusion” mode. In other words, we can map fission and fusion onto our PSIU matrix.

If you look at the PSIU matrix of Organizational Physics below, you’ll see that Producing and Innovating forces are really fission strategies, while Stabilizing and Unifying are fusion strategies. Your organization needs a mix of both but, by law, these forces compete for available energy. Understanding that fact alone will help you to recognize and accept what forces (more fission or more fusion?) are really required for your organization and team at any given time – and why – and then give the system what it needs.

As a manager, you want to create a conscious rhythm for your business and your teams. Team meetings, strategy sessions, and group events are tactics for improving team fusion. On the other hand, giving your team the time, space, and autonomy to execute on the daily work, while tracking progress and giving clear feedback, are tactics for improving fission. What strategy should you deploy when?

If it feels like your team is too fragmented — like a clutch of chickens running around with their heads cut off — it’s a sure sign that there’s a need for more fusion. You’ll need to invest more time and energy on getting everyone on the same page, step away from the daily work, and seek to create team-wide alignment. Or, if it feels like your team is too consolidated — bogged down in bureaucracy, process, and pointless meetings — then break some glass and set them free. Get them out there mixing it up in the world and getting shit done.

While both fission and fusion are necessary for […]

Technical skills are the knowledge and skills specific to a particular occupation. Programming is a technical skill. But so are sales, marketing, writing, customer service, accounting, and so on. The best way to evaluate high technical skills in any area is to not to interview for them but to test for them.

I first saw the testing approach many years ago by watching interviews for software engineers. A potential new hire gets invited to the company to meet with one or two trusted members of the existing software team. The interviewee is given a laptop and a series of software problems to solve. Right there on the spot, the interviewee must code solutions to those problems.

Two things struck me when I first saw this interview technique. One, it’s a fast method to assess someone’s technical skills. Two, why in the heck wasn’t this same approach being used when hiring for every other position in the company? Need a VP of Marketing? Test their technical skills on the spot by having them write a press release or create an ad campaign. What about a VP of Sales? Have them pitch the room as if it were a sales prospect. Need a secretary? Have him or her answer the phone and deal with an emergency.

Of course, assessing for cultural fit, PSIU style fit, and aligned vision and values are a different interviewing challenge. But using a technical skills test allows you to quickly assess someone’s capabilities so that you can focus on those other areas of alignment. So the next time you’re interviewing a candidate and it’s time to assess their technical skills, remember to use this simple approach: “Don’t tell me; show me.”

An entrepreneur wears many hats that change during various stages of the venture but these three questions that are always relevant:

1) Where are your energy drains?
2) What does the environment need now?
3) What are you inspired to do next?

Now I get that these questions may seem strange at first so let me explain why they’re actually really sound questions that lead you to focus on the right things, at the right time, and create breakthroughs.

1) Where are your energy drains?
Energy drains are a symptom of entropy, dissolution, decay in the system. By paying attention to the drains, and eliminating them, it frees up additional energy for you to kick-ass out in the world. If you don’t eliminiate the drains, they will steal from your top-line performance.

For example, notice that if you’re back is hurting that you’re less effective at work. Or, notice that if you and you’re co-founder no longer trust and respect one another that top-line business growth suffers. Why is this? It’s because energy flows from inside-out. At any given point in time, a system has a finite amount of energy. It must use this available energy to maintain itself, make decisions, and get work done. Only after those internal needs are met, and if energy is left over, can the system go forward into the marketplace and find, sell and service customers.

When you ask the question, “where are your energy drains?” begin with you and go from the inside out. How’s your physical health? Your mental and emotional state? Are you waking up thinking about something that’s troubling? If so, you better address it. How’s your primary love relationship? Any friction or drains there? What about your relationship with your management team? Board? Key accounts? Etc. Scan and look for drains in order to free up lost energy to be put towards execution and expansion. Ignore the drains at your peril. They steal from overall success.

2) What does the environment need now?
Charles Darwin laid out the key to business success 250 years ago. (No, it’s not “survival of the fittest”). It’s adapt or perish. By forcing yourself to get out of your own head, desires, and the way you want things to be, and looking objectively at what’s really happening around you now, it allows you to focus on the most important things: producing positive and desired results for your customers now and over time.

For example, how well are you meeting customer needs now? Are you well prepared to meet them tomorrow? What changes are happening in the marketplace that will change the environment? Are you piloting, nailing, and scaling in accord with market demand and your ability to execute? (If not, you’re in a strategic folly).

Many entrepreneurs get so […]

A better way to ask this question would be, “What are effective ways to assess if someone is good at ‘getting things done’ and at what cost?”

By “cost” I mean this: If you’re looking to hire someone with a high drive to get things accomplished, then you also need to know the cost of that drive. What kind of cost? It will show up in one of three areas. You can get a sense of which area(s) by asking yourself this question:

“If this person has a high drive to produce results (Producing force), then does he or she also…

1) Overlook the details, order, and structure in getting things done (Stabilizing force)? That is, is the work accomplished but filled with errors and sloppiness? It’s hard to get it done fast and at the same time, get it done right.

2) Overlook the creative opportunities in getting things done (Innovating force)? There’s a difference between lazy and entrepreneurial lazy. It’s hard to be both heads down cranking things out and heads up, looking around for the breakthrough idea at the same time.

3) Overlook the implications to the rest of the team (Unifying force) in getting things done. Are you hiring someone who works so hard to get it done that they can’t relate to or coordinate well with others on the rest of the team?

Everything has a cost. Your job in making the right new hire is to understand what style you need for the job function and to maximize the gains and mitigate the costs of that style. There is no superman or superhire that can be all things at all times. So just be aware of the cost in what you’re hiring upfront and design around it.

Now when it comes to interviewing someone for high drive, it’s pretty easy to do. I’ll explain it below but you’ll get an immediate sense of it using this free 15 second style assessment.

1) Does this person tend to think, speak, and act more quickly or more methodically? What you’ll notice is that people with higher drive tend to lean towards being more quick, fast, and to the point in their thoughts, words, and actions.

2) Does this person tend to focus on getting things accomplished or creating new ideas? What you’ll notice is that people with a higher drive to execute on the work at hand focus their energies there more than finding creative ideas. Those who tend to prefer to find creative new ideas can absolutely show great bursts of productivity but can quickly get bored with the status quo.

Other characteristics of a person with a high drive to produce results include the fact that they take a linear and structured approach to problem solving, they focus on the short […]

There’s an article in Harvard Business Review this week, “Why HR Still Isn’t a Strategic Partner.” In it, the author laments that most corporations are asking themselves why they even have an HR department and as a solution, encourages HR leaders to ask a simple question: “do my actions cause friction in the business or do they create flow?” Then act accordingly. It’s trite advice and it misses the core issue entirely. In fact, there are really two major reasons HR is marching towards irrelevancy and it has nothing to do with intentions…

The two major reasons HR is marching towards irrelevancy:

#1. HR is a loaded word that lacks a clear cultural definition. (If you do read Craig’s article, make sure to read the comments from other HR professionals to get a sense of the confusion). Is the function of HR to perform recruiting? Career development? Hiring and firing? Prevent the company from getting sued? team performance improvements? It’s like arguing about capitalism versus socialism without understanding what each word really means. Yes, a lot of opinions get thrown about but no real progress gets made until there’s clear and mutually understood definitions.

#2. Because of a clear lack of definition, HR is usually structurally misplaced in an organization and therefore doesn’t deserve a seat at the table with functions that are driving the business forward. Why would functions like sales or marketing or strategy ever want those lowly HR peons, well-versed in arcane employment law and specializing in telling the company what not to do, mucking up their meetings? Can’t blame them.

Here’s how to solve the HR problem:

Within your organization, NEVER, EVER co-join the short range efficiency and liability prevention functions of HR (things like following employment law, dotting i’s and crossing t’s, and handling the actual process of hiring and firing and benefits administration, etc..) with the long range effectiveness functions of HR (things like recruiting, skills development, career development, etc.) as one function. Period. Stop. If you do this, I’d personally track you down and shoot you but your organization is already so messed up that I won’t have to.

Instead, place the short range efficiency and liability functions (I’ll call them Admin HR) under the Admin function of your organization and place the long range effectiveness functions (I’ll call them People Dev HR) under the Strategy function of your organization.

(BTW: You can outsource the Admin HR function entirely but the People Dev HR function must be overseen by the CEO directly with the support of other senior leaders and can be supported by third-party specialists in people development and team performance.)

This is a rich topic of discussion and if you’d like to learn more, read Chapter 18 in Organizational Physics – The Science of Growing a […]

Mehdi Arfaoui, a student at IESEG School of Management in Paris, France, asked me a question via Quora recently, “How is Change Management Different in Large Organizations Compared to SMEs (small and medium sized enterprises)?” Here’s what you need to know.

The principles of change management are the same regardless of how ‘big’ or ‘small’ an organization may appear to be. The answer lies in understanding Isaac Newton’s laws of motion.

All organizations have mass. Mass has little to do with the number of people or departments in an organization. It has everything to do with where the authority, power, and influence reside within the organization and how much resistance to change exists.

Even a gargantuan organization, like the United States, can move incredibly quickly when the mass is coalesced. Just remember 9/11 and the Patriot Act. But even a two person organization, like a bad marriage, can move incrediblly slowly, resisting any change that appears to benefit one partner at the expense of another.

When it comes to change management, don’t think ‘small’ or ‘large’ organization. Instead think in terms of inertia and what must first be done to gather in the organizational mass in order to enact a change.

Mr. Arafoui went on to ask, “So, according to you, we couldn’t say that there are existing differences in the management of changes between MNCs or SMEs for example? Because change will anyways be determined by the company’s culture and resistance?”

There are obviously some more complexities to managing multi-national’s (MNCs) but the fundamentals of enacting a change are the same, regardless of size.

So how do you manage the greater the complexities in an MNC? Every successful complex adaptive system uses a common framework, language, and sequence to operate. This framework, language, and sequence must also adapt to changes in the environment.

For example, a colony of ants can change tactics and directions amazingly fast because the colony shares a common way of sensing the world (framework), enabled by a common way of communicating (language), and a series of steps to take when presented with an opportunity-threat (sequence). If the colony is going to be successful over time, then it must also be able to adapt this framework, language, and sequence as the environment changes. If not, it will perish.

The complexities in managing MNC’s emerge when the organization lacks a common framework, language, and sequence, or it ceases to adapt them to changing times. In my company Organizational Physics, one of the first things we do when working with a new company is to teach a common framework, language, and sequence to follow to enact a change. That’s not new. Every organizational development company in the world does the same. What’s unique about our approach is that we use a universally applicable framework, […]

Venture capitalist and renowned blogger John Greathouse reviewed my new book Organizational Physics – The Science of Growing a Business on Forbes.

Lex’s new book, Organizational Physics, is compelling, as it applies the fundamental laws of physics to the world of business. By viewing companies through this prism, one can diagnose organizational problems and identify corresponding solutions, irrespective of a company’s size, the markets it serves or even the personalities of its senior executives – which makes the book a powerful toolkit for business leaders.

Read the review.

Join Lex for a virtual book tour of Organizational Physics – The Science of Growing a Business.

During this 50 minute call, Lex will talk about the key concepts of his pre-release book (get a copy here), how to apply them, and answer your questions.

Space is limited to the first 25 callers. Copy and paste the phone number and code into your calendar.

Join in, ask questions, get inspired. I hope to hear from you on the call. Thanks!