growth

Q: Is capitalism doomed?

I originally published this article in January 2011 but it seemed like a good response to this question. The bottom line is that if humanity is going to survive and thrive, we must restructure our economy and society towards decentralized local production.

Good managers run their businesses 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 a 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 […]

By Lex Sisney|2021-05-18T02:36:06-07:00July 15th, 2012|

The Happy High Achievers

Are you happy in your job? The data says you’re probably not. I can also speak from experience. For most of my life, I operated under a false assumption that the more successful I became, the more happiness I’d feel. But what I found was just the opposite. At one point in my early thirties, I had the experience of attaining everything I had once dreamed of. But instead of feeling elated and happy, I felt burdened, stressed, and beaten down by constant and competing demands. In my experience in the Young President’s Association, a worldwide group of successful CEOs, I found that very few were actually genuinely happy as well.

Why is this? Why doesn’t greater success seem to lead to greater happiness? There’s an interesting study on success and happiness by Dr. Vance Caesar of the Caesar Group that sheds some light on this phenomenon. In an ongoing study of high achievers (the top 2-3 percent of individuals in a given field) across all walks of life, Dr. Caesar discovered this: Only 1 out of 10 high achievers (.2 to .3 percent of the total pool) rate themselves as authentically happy. Imagine that: If you gather ten thousand top achievers from all walks of life—the rich, the famous, the talented—only a handful will actually consider themselves happy.

What’s the difference between a happy high achiever and the rest? In his research, Dr. Caesar identifies eight attributes that dictate both success and happiness. Most of these are fairly easy to recognize and intuitively make sense. They include a driving sense of purpose, a compelling vision, and the intrinsic feeling that your work is meaningful. Other attributes include beliefs and behaviors that create inner peace, a regular process involving […]

By Lex Sisney|2021-05-18T04:56:16-07:00March 11th, 2012|

Where Are Your Energy Drains?

According to the laws of physics, your success is determined by how you manage energy – and there’s a universal success formula to prove it. Quite simply: success is a function of integration over entropy. Your goal is always to have high integration and low entropy. In “How to Choose the Right Strategy“, I explained how to create high integration in your company. What gets too little attention in business, however, is the havoc that high entropy plays on a system. It truly is the ultimate killer. Or as physicists Sir Arthur Eddington aptly put it in the early 20th century, “The law that entropy always increases holds, I think, the supreme position among the laws of Nature. If someone points out to you that your pet theory of the universe is in disagreement with Maxwell’s equations — then so much the worse for Maxwell’s equations. If it is found to be contradicted by observation — well, these experimentalists do bungle things sometimes. But if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation.”

So if there’s anything you should be doing in your business that you’re probably not focused enough on, it’s cultivating an awareness of entropy and a commitment to reducing it. Personally, I didn’t appreciate the significance of entropy in my own business until I ran into it. Hard.

In 1998, at the age of 28, I co-founded an affiliate marketing company in Minnesota and moved it to Santa Barbara, California. By 2001, the company was soaring like a rocket, generating incredible growth rates (much easier to do for a small company than a […]

By Lex Sisney|2021-05-18T05:49:57-07:00February 27th, 2012|

The Misaligned Organization and What to Do About It

In 1993 I was a college student in St. Paul, Minnesota. I drove a twenty-year-old canary yellow Toyota Corolla with bald tires, a broken heater, and a misaligned chassis. Because my spending priorities then were the necessities of college life (pizza, beer, girls, and rent), I never invested in making the car safe to drive.

Navigating that car on the icy roads of thirty-below Minnesota winters required a certain ability to go with the flow. But eventually, my refusal to to replace the tires and align the chassis caught up with me. Driving late one winter night … it’s easy to guess what happened. Wipe out. Crash. Car totaled.

Thankfully, no one was hurt.

I share this story because it’s easy to tell when a car is misaligned. The car squeaks, there’s friction and a loss of power, and it’s difficult to steer where you want to go. Similarly, if you know what to look for, it’s easy to tell when your business is misaligned. If you act early on, you can avoid a crash and even improve performance fast.

What It Means to Have an Aligned Organization

Well after I had sold that old Toyota, I received some more equally important lessons on the value of organizational alignment. In my late twenties to mid-thirties, I personally led two companies into compound annual growth rates (CAGR) exceeding 5,0000% per year. From startup to $4M and $12M in two and four years respectively. While this may be chump change to some entrepreneurs, these periods of rapid growth were priceless learning for me. They also provide a valuable lesson that’s applicable to companies of all sizes and at all lifecycle stages. […]

By Lex Sisney|2021-05-18T05:21:42-07:00February 10th, 2012|

Mastering Team-Based Decision Making

Every business has mass, which is a measure of its resistance to change. The challenge in getting an organization to change direction is the fact that its mass isn’t neatly self-contained. Rather, it’s scattered throughout its people, systems, structures, and processes – and the collective inertia causes resistance to change. In order to get the organization to execute on its strategy, you’ve got to get the mass contained and headed in one direction.

Having aligned vision and values, as well as an aligned organizational structure, is the first step. If you have misalignment in these areas, then no matter what, you’re not going to get very far. At the same time, alignment in vision, values, and structure alone won’t cause the business to move. They just help to hold the mass together and keep internal friction low. Making the organization come alive and move quickly in a chosen direction requires that two things be done well: making and implementing decisions. In fact, the secret to organizational momentum lies in continually making good decisions and implementing them quickly.

The Most Important Process in Your Business

Every business relies on multiple processes (sales, customer service, finance, product development, marketing, etc.). These can be highly visible or nearly invisible, organic, haphazard, detailed, flexible, constant, or changing and either a boon or a burden. When a process is performing well, it allows the work to get done better and faster. When it’s not, you feel like you’re swimming upstream.

While your business has many different processes – some working well and others maybe a total clusterf#@*k – it’s the process of decision making and implementation that’s most critical to your success. Why? Because at the most fundamental level, a business […]

By Lex Sisney|2021-05-18T05:23:17-07:00January 24th, 2012|

Organizational Physics Business Acceleration Coaching

Q4 of 2011 was a big period for me. I successfully restructured 3 fast-growing companies while personally coaching 17 entrepreneurs and business leaders. Wow! I’m grateful for the opportunities and to participate in some awesome results. What kind of results? Here’s a snapshot:

A company with flat sales the past two years was struggling with accelerating growth. The company co-founders were feeling burned out. We reset the strategy, restructured the organization so the founders could escape low-value tasks, repositioned the story to appeal to investors, and accelerated the product development process. The result? The company raised over $500K in financing, launched a new killer app, and already has a full sales pipeline for 2012.

A 5-year-old company had been losing money since its inception. It had a strong culture but was suffering from customer turnover and too many competing priorities, with no way to manage them effectively. We implemented a new go-to-market strategy, restructured the company for clearer ownership, and streamlined the decision-making and product development processes. The result? The company reached cash flow profitability for the first time and is poised to grow from $3M to $7M in 2012.

After Google changed its AdSense algorithm, a 7-year-old international internet company lost 90% of its revenue overnight. Ouch. At the same time, the founder was feeling ready to move on and pursue the next new thing. What did we do? We quickly sold off the business for over six figures, netting a nice profit. Then we launched an entirely new business that the founder is truly passionate about.

My goal this quarter is to reach a new audience of entrepreneurs and business leaders. I have a few slots open. There’s no better time than right now to align and activate for the coming year around proven principles that drive results. If 2012 […]

By Lex Sisney|2019-08-11T10:54:42-07:00January 18th, 2012|

The 5 Classic Mistakes in Organizational Structure: Or, How to Design Your Organization the Right Way

Is your organization designed to be a rocket or a parachute? If I were to ask you a random and seemingly strange question, “Why does a rocket behave the way it does and how is it different from a parachute that behaves the way it does?” You’d probably say something like, “Well, duh, they’re designed differently. One is designed to go fast and far and the other is designed to cause drag and slow an objection in motion. Because they’re designed differently, they behave differently.” And you’d be correct. How something is designed controls how it behaves. (If you doubt this, just try attaching an engine directly to a parachute and see what happens).

But if I were to ask you a similar question about your business, “Why does your business behave the way it does and how can you make it behave differently?” would you answer “design?” Very few people — even management experts — would. But the fact is that how your organization is designed determines how it performs. If you want to improve organizational performance, you’ll need to change the organizational design. And the heart of organizational design is its structure.

Form Follows Function — The 3 Elements of Organizational Structure & Design

A good design supports its purpose. There’s a saying in architecture and design that “form follows function.” Put another way, the design of something should support its purpose. For example, take a minute and observe the environment you’re sitting in (the room, building, vehicle, etc.) as well as the objects in it (the computer, phone, chair, books, coffee mug, and so on). Notice how everything serves a particular purpose. The purpose of a chair is to support a sitting human […]

By Lex Sisney|2021-05-18T05:25:49-07:00January 9th, 2012|

The Physics of Fast Execution

If you want to execute fast, gather the mass. Let’s do a thought experiment. Imagine that you’re standing in the middle of a racquetball court surrounded by four walls. At your feet is a soccerball. First, notice how the soccerball just tends to sit there. That’s called inertia. In order to get the ball to do something, you have to apply a force to it. In this case, you give it a kick and the ball rolls along the floor, bounces off the wall, and careens in another direction before coming to rest again. Next, you walk and retrieve the ball and bring it back to the center of the court, place it on the floor, and this time, you give it a really hard kick. What happens? The ball rolls even faster across the floor, bounces off the wall with more power, and travels further in a new direction than the first kick. In essence, you just experienced all three of Newton’s laws of motion.

Newton’s three laws of motion will shed light on the speed and direction of your organization. If you want to move your organization forward quickly in a chosen direction, you should understand these laws and how they apply to business execution. Put another way, if you want to be successful, work with – not against – the physics.

The First Law of Motion

Newton’s first law of motion is about inertia. Inertia is a recognition that an object will tend to do what it’s been doing, unless acted upon by an imbalanced or outside force. In our thought experiment, that’s why the ball tends to stay at rest in the middle of the floor until you do something, like give it a kick. Inertia works in both […]

By Lex Sisney|2023-02-20T10:23:37-08:00December 13th, 2011|

Getting from PSIU … to Really Good Management

If you’ve been following along in the management guide, you know that there are four fundamental forces (PSIU) that shape individual and organizational behavior. You also know that these forces compete for available system energy and that if even one of the forces is absent, the organization will perish. I’ve also mentioned that, if you want your organization to do something new – such as change direction or accelerate performance – you must engage the appropriate force. But how does all this translate into practical steps? And how can you use it to be a better manager of people and situations?

1) Know the Forces at Play

Knowing the forces at play within an individual or an organization delivers fast insight into what otherwise appears as complex or random behavior. For example, if you set up a team with all Producers, then that team is going to demonstrate some predictable behavior and outcomes. It’s going to move very quickly, produce a large volume of work, and blow past its milestones in record time. However, the work is going to have errors (it will be an inch deep and a mile wide), it will totally miss out on the implications and the coordination with other departments, and it will lack creative problem solving. A team of all Unifiers would have very different but equally predictable outcomes.

There’s another important benefit to knowing the forces at play. It’s this: it allows you to see and accept things for what they are, with less judgement. You should not underestimate the power of this. On the one hand, judgment is the capacity to assess situations or circumstances astutely and to draw sound conclusions. Obviously, good judgment is a critical skill for a manager. On […]

By Lex Sisney|2021-05-18T05:27:17-07:00December 5th, 2011|

The Four Styles of Management

What is your work style and how does it interact with other styles? Who’s on your team and how can you help them to reach a higher level of performance? And what about the style of your boss or your spouse – how can you best influence him or her so that you both get what you desire? These are all million-dollar questions. The answers can be found in understanding how the four forces — Producing, Stabilizing, Innovating, and Unifying — operate within each of us.

Each of us expresses a certain work style – understood in its broadest sense as a mode of operating in the world – that reflects our own unique combination of the Producing, Stabilizing, Innovating and Unifying Forces. All four forces are present in each of us in some form, but usually one or two of them come to us most naturally. In addition, when one force is relatively strong, one or more of the others forces will be relatively weak.

While we may modify our general style depending on circumstances, stepping out of our natural strengths costs us more energy than operating within them. For example, imagine a highly innovative entrepreneur who is forced to do bookkeeping for a week. Sure, she may be able to do it, but she’s also going to feel extreme tedium, effort, and a loss of energy as a result. It’s because of this energy cost that most of us express fairly consistent characteristics that reflect our usual way of managing. Effective management therefore requires understanding your own style and its relative strengths and weakness, as well as that of the people with […]

By Lex Sisney|2021-05-18T05:33:27-07:00November 9th, 2011|

How Square Went Against Popular Strategic Advice and Won

There’s a popular view among technology startups that a smart business strategy is to build a product that’s designed for the leading industry giant to acquire. It usually sounds something like this: “We’re building the next-generation router that Cisco will need to add to its product line. Our strategy is to build the product, get them to adopt it, and ultimately have them buy us out.” Like a lot of things in life, just because this view is popular, doesn’t mean it’s right. In fact, gearing your strategy towards the leading industry giant is usually dead wrong. Here’s why and how to choose a better strategy.

The Story of Square

You may have heard of a company called Square Payments, Inc. Square is a mobile payment solution company that allows anyone to accept credit card payments using their mobile phone. In just over a year since its launch, the company had nearly $1 billion in processed payments. It has recently accepted an undisclosed investment from Visa, the leading credit card processor. The insider consensus is that, if Square continues to execute its strategy, it will revolutionize how we pay for things in the real world. It could be as disruptive to payments as iTunes was to music. How did this all happen in such a short amount of time?

The story of how Square came to life is a great one. Square was created by Jack Dorsey (Jack also happens to be the co-founder and Executive Chairman of Twitter, but that’s a different story). When you learn the story of Square, it becomes clear that Jack didn’t start out to revolutionize the payments industry. His original […]

By Lex Sisney|2021-05-18T05:34:42-07:00November 2nd, 2011|

The Stages of the Execution Lifecycle

Navigating your company up the execution lifecycle ¹ and keeping it in optimum shape is a great challenge. This article will show you how to do it successfully.

The stages of the execution lifecycle become easier to understand with a little pattern recognition. Basically, every business must shape or respond to its environment and it must do so as a whole organization, including its parts and subparts. If it doesn’t do this, it will cease to exist. Recognizing this, we can call out four basic patterns or forces that give rise to individual and collective behavior within an organization. They are the Producing, Stabilizing, Innovating, and Unifying (PSIU) forces. Each of these expresses itself through a particular behavior pattern. The combination of these forces causes the organization to act in a certain way.

Just like the other lifecycles, the execution lifecycle exists within a dynamic between stability and development. The basic stages of the execution lifecycle are birth, early growth, growth, and maturity and, from there, things descend into decline, aging, and death. The focus within the execution lifecycle should be to have the right mix of organizational development and stability to support the stages of the product and market lifecycles. That is, the lifecycle stage of the surrounding organization should generally match the lifecycle stage of the products and markets. If it’s a startup, the surrounding organization is the entire company. If it’s a Fortune 500 company, this includes the business unit that is responsible for the success of […]

By Lex Sisney|2021-05-18T05:37:49-07:00October 28th, 2011|

Lifecycle Strategy: How to Tell if You’re Doing it Right

In my previous post, I introduced the product, market, and execution lifecycles and why a successful strategy must align them. Now we’ll take a look at the four key indicators that will tell you if you’re on the right strategic path. The key indicators, which must be taken into account at each lifecycle stage, are Market Growth Rate, Competition, Pricing Pressure, and Net Cash Flow.

Let’s take a visual walk around the figure above and see how the key indicators work. First, notice that when you’re piloting your product for innovators in quadrant 1 you should be in negative cash flow. The total invested into the product to date should exceed the return. The market growth rate should be low because you’re still defining the problem and the solution for the market. Therefore, the competitors within your defined niche should be few both in number and capabilities. Consequently, the pricing pressure will be high because you haven’t defined the problem or the solution, so you have no ability to charge enough money for it at this stage.

By Lex Sisney|2021-05-18T05:38:26-07:00October 19th, 2011|

Lifecycle Strategy: Product, Market, Execution Fit

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 […]

By Lex Sisney|2021-05-18T05:39:04-07:00October 18th, 2011|

How to Keep Everyone on the Same Page – The Rule of Three

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.

By Lex Sisney|2021-05-18T05:44:27-07:00February 21st, 2011|