Why We Love Predictions So Much & 3 of Mine

Have you had enough of the look-backs at 2010 and the predictions for 2011? Apparently, most people haven’t, which is just as well, judging by the number of blogs and articles hitting my RSS feeds, Google Alerts and email box. Why do we love predictions so much?

Humans are unique in the animal world in that we can detect and make meaning from complex patterns all around us that result in decisions about how we should behave, think, live our lives and so on. Predictions – our own and others’ – are aggregates of these patterns so we find them confirming or interesting or sometimes just weird but we pay attention to them.

We have a strong need to exercise individual control, some of which is cultural and some of which is human. Getting a handle on the possibilities for the future, gives us a sense of mastery, self-esteem and even optimism. We tuck these predictions away in our memory banks and they become part of our pattern recognition process.

According to Dr. Shelley E. Taylor, a professor of Health Psychology at UCLA, “positive illusions” about the future are mentally and physically healthy; they improve the ability to care for and about other people and they increase the capacity for creative and productive work.

As predictions seem to be so important to our general well being, I’ll offer three of mine for the business environment:

• CEO’s will be more open to experimentation at work BUT these experiments will be verified by analytics. Managing risk is still hugely important in this fragile economy. Trust but verify.

• Social capital will become a key hiring criteria for positions that influence business performance. The quality of a person’s relationships will become as important as her experience and skill set.

• Customers will be more quixotic than ever and companies will make even larger technology investments to try to predict their moods, behaviors and buying intentions. Whether these investments pay off will depend upon:
• Business Strategy
• Organizational Culture
• Quality of Leadership
• Employee Fit
• The Right Data, Metrics and Analytics

As a recent blog from IBM stated, there is no ROI from Business Intelligence unless someone uses it to make decisions.

Happy New Year and let’s get 2011 started!!

What are some of your predictions for 2011?

5 Predictions About Analytics, 4 Tips to Get Started & 3 Cautionary Thoughts

This is the time of year for predictions and there is no shortage of them in the analytics arena. As business owners and managers are redoubling their efforts to find competitive differentiation amid tepid growth projections for 2011, analytics is seen by many leaders as a way to gain an edge.

There are a few key predictions that are shared by seasoned analytics champions and neophytes alike:

• Organizational data is proliferating at an alarming rate, both in terms of volume and complexity. How to make sense of all of this data will be a challenge for those not on the analytics bullet train.

• Desktop analytics will dominate the business environment, making large servers and high cost analytic languages no longer able to return the desired ROI.

• Mobile applications will be hot topics. Devices like iPads, smart phones and tablets will bring analytics into end users’ hands like never before.

• The gap between heavy analytics users and laggards will continue to widen and it will become apparent in areas like innovation and product development as well as bottom line results.

• Privacy regulations could make the collection of personal data more restrictive. At the same time, individuals may balk at the idea of how much of their private information is in the hands of third parties.

Michael Lock of the Aberdeen Group and Caroline Seymour of IBM’s Mid-Size Business unit have some helpful pointers for companies that are taking their first steps into business analytics:

Get Control of Your Data: This means bringing disparate buckets of data into a consistent environment so it’s easier for more people to perform multi-dimensional analysis.

Analyze Data in a Business Context: Data analysis in isolation provides no insight and therefore has limited value to the business. Analytics works for the organization when there is a business strategy to address outside pressures, an assessment of capabilities and analytical needs and the ability to use analytics across the organization.

Think Big – Start Small: This is what Michael Lock calls the Land and Expand strategy. Start with one unit or one pain point and work up to the enterprise level of data consistency. Match resources to the company’s budget.

Empower Non-technical Users: 77% of the Best-in-Class companies measured by Aberdeen Group have what they call “pervasive Business Intelligence with self-service usage”. Only 10% of the Laggards have it. End users have the business knowledge, the business context and the ability to create insight from data.

I’ve been involved in so many fads du jour, from reengineering to knowledge management. All of the concepts were stellar but became hijacked by (gasp!) consultants selling technology or off shoring services or some effort to gain short-term advantages. The problem seemed to be either that the ROI assumptions were inaccurate or that consultants rarely stayed around to see the business through the painful change that inevitably comes with disruptive innovations.

Now for the words of caution...

Leaders Drive Change. That’s what GE’s CEO Jeff Emmelt says and I believe him.

Culture Trumps Strategy. Becoming an analytics-based business means behaviors change across the board. This is often left off the To-Do list.

The Collective Mindset Needs to Shift. If data is a source of power in the organization; if people think they’ve been successful making “gut” decisions; if collaboration isn’t in your vocabulary, you have some work to do to build a successful analytics-based company. But, the rewards are going to be huge.

Business is Unforgiving. Get Used to It

“Life isn’t just about what you want to be. It’s about what you are.” I read this quote from John Rowe, the CEO of Exelon, a Chicago based energy provider in a recent BusinessWeek. His comment got me thinking about how important it is in strategy development to know your starting point.

I’m a right-brained thinker so big ideas, conceptualizing and embracing change are my natural starting points. Nothing is more exciting than new flip charts, fresh white boards and eager faces, ready to brainstorm the heck out of the future.

But wait…that’s a ready/fire/aim approach and because business owners and leaders are more risk averse than ever, it’s essential to use a structured process for evaluating strategic issues in the right sequence to give equal prominence to all aspects of thinking about the present and the future.

1. Frame the issue(s): this first step includes asking the “where are we now” question as well as understanding why we are considering a change in direction (what we want to be).

2. Generate ideas that answer the above questions.

3. Evaluate the options based on facts (resources, competition, etc.)

4. Consider the options based on perceived level of organizational change required and amount of buy-in necessary to be successful. (Do we really want to change and can we sell it to others?)

5. Develop “what-if” scenarios for each option to refine the degree of difficulty and to assess the risk management/risk mitigation challenges. (Where are our back-up plans?)

6. Agree on best course of action based on Steps 1 through 5.

7. Create an action plan designed for implementation, that is, one with timelines, accountabilities, ownership and success metrics.

In the current business climate, we can be too timid, because the future has so many unknown variables OR too bold because our strategic process doesn’t start with "what we are now". Being clear about our present doesn’t diminish our ability to generate innovative ideas for our future; being grounded in reality actually ensures that ideas become more than dreams.

5 Tips to Take Your Strategy Beyond "Hope"

I just returned from a two-day planning session with my business partner. As I said in a recent blog, a plan is nothing; planning is everything. This is the season of the budget and also, hopefully, strategy development, so I’d like to offer my perspective on the things that can make your strategy discussions more productive:

Get away if you can: staying in the office is a terrible idea, mostly because there is a clash of priorities; and the immediate and urgent (but not necessarily the critical) almost always win.

Begin with the end in mind: Thank you, Stephen Covey. For our business, this meant going out to 2014 for a lot of good reasons, including succession planning. Many initiatives can take several years to get right and leaving them until they are urgent is risky in today’s business environment.

Swim into a Blue Ocean: even if it’s going to take longer than 12 months (which may be a long time in American business), dare to create scenarios where your business is doing new and innovative things. This kind of activity expands your thinking and generates more options. Without ideation, your "ocean" gets redder by the minute, as the sharks circle the boat. By the way, reading Blue Ocean Strategy is good preparation for a strategic retreat.

Bite the bullet and take on the tough stuff: Effective strategic thinking means putting the skunk on the table. If you don’t talk about what’s hard, opportunities may never present themselves and, at the same time, challenges are never articulated until they rear up and bite you. Then you’re stuck spending a lot of useless time cleaning up after the skunk.

Boil down your strategy into a memorable sentence: a strategy statement by its nature can be complex and the risk is that a critical piece of your business becomes lost in verbiage. Try explaining two paragraphs of strategic direction to your employees and watch their eyes glaze over. We got ours down to “In It to Win It”. It means something to our company and it’s a lot easier to make decisions when judging them against an easy-to-recall strategy sentence.

The first step in any strategic thinking is to leave the spreadsheets and PowerPoints at the office and focus on the future. Whether your company is large or small; whether you head up a department or the entire business, strategy demands attention and dialogue. Are you using this budget season to take your thinking about your company to a new level?

"A Plan is Nothing: Planning is Everything"

President Eisenhower knew what he was talking about. As a general directing European operations during World War II, he understood the power of determining a plan of action and then constantly communicating it, evolving it and refining it as information came into his camp.

Are our business situations any less mission-critical today? I understand that we aren’t in armed combat (although it does seem like it sometimes) but when you run or own a business, it sure feels like bombs are being lobbed from all corners.

Really, nothing about the fundamental importance of business strategy has changed for 65 years except:

• Businesses don’t like to do it (“takes away from the REAL work”)
• It takes too long (“you don’t understand, things move too fast in our world”)
• Nobody seems to know what he or she are supposed to be doing (they got the email, the slogan and the mug but things dropped off fast after that)

I just finished a one-day strategic planning retreat for a client involving the senior team (yes, I did say one day). Part of the secret sauce in this recipe is doing work up front so I designed an online assessment that got at the heart of the strategic issues. All of the verbatim feedback was put into word clouds (www.wordle.com) so the areas of strongest commonality of thought were prominently displayed.

We used small group and large group activities to define Mission, confirm Values and design the five Big Rocks that became the positioning statement and strategy for the next 24 months. Because the word clouds so powerfully illustrated Opportunities and Challenges, we were not struggling throughout the day to agree on these items.

There is one more day to set 12-and 24-month goals and I use a simple spreadsheet that combines long- and short-term goals, action plans and metrics. It displays the Mission and Values so they never are forgotten in the planning process. This document is the North Star for the client: guiding strategy execution and ensuring that decisions are in line with Mission and Values.

The communication piece is so important -- and frequently not designed -- because everyone in the organization has to know what direction it’s going in for the foreseeable future. That is part of the second day goal-setting workshop. I believe we can boil the strategy statement down to “let’s get a man on the moon by the end of the decade” as President Kennedy did. That way, we lessen the risk of failure to execute.

Business strategy doesn’t have to be a 12-month cycle of PowerPoint presentations and number crunching. I don’t think either General Eisenhower or President Kennedy had that luxury of time. Both understood that planning is far more powerful than the plan and that communication is the trump card for execution.

What planning do you do in your organization? Is it a PowerPoint or a Word Cloud?

Has Management Become Just a J-O-B? Five Enduring Lessons

A couple of weeks ago, I asked whether ‘management’ is obsolete. As a discipline, it’s less than 100 years old and emerged in response to the large and complex organizations that grew after World War I. Management doesn’t have an exam like the law or licensure like medicine to demonstrate proficiency. Nevertheless, management is a difficult practice that many have come to with poor training and confusing expectations. And yet, while some practices must change, there are some enduring lessons about management I’ve learned during my career:

Embrace Your Outliers: I had a manager in London who was gender blind and that was a real asset to me, who wanted to be one of the first women to present insurance risks at Lloyd’s of London. It was about competence and potential, not whether we used the same bathroom.

Get a Mentor; Be a Mentor: One of my favorite managers made it his job to take on new recruits in a structured way to develop our skills and show us the ropes even if we were not in his department. He insisted that we give back by becoming a mentor and I found that teaching was the best way to learn.

The Better You Are, The Better I Look: This was the philosophy of a dynamic manager who made a point of surrounding himself with the best people he could recruit. The team couldn’t have been more different and while that caused friction, it also made for amazing innovations, growth and surprising agility. I learned from him that diversity of thought is a competitive advantage and that as change is the only constant in business, it was advantageous to get out in front of it or get out of the way.

Make a Decision: I once asked a manager for feedback on areas to improve after a performance review. He thought for a minute and then said, “Don’t take forever to make a decision. Gather information, hear opinions and then make a decision. You can always modify it but people hate dithering.” Good advice.

You Are the Culture: If you are a manager, even if you aren’t the uber-manager, you set the tone for your department. People learn the way things are done from you, good or bad. Employees don’t leave their jobs; they leave their managers. A hard lesson I learned as a manager was when I took over from someone who had very different ideas about what it meant to manage. If I had to do it over, I’d spend a lot more time changing the culture before thinking I could change anything else.

I agree with Gary Hamel that management processes have to be redesigned to take account of new organizational structures, different workforce dynamics and technological advances. His Management Innovation Exchange is an open innovation project aimed at reinventing management. It doesn’t mean throwing out every good thing we learned as managers; it’s just about kicking out what no longer works, like celebrity managers.

Waging the War on Bureaucracy: Is Management Obsolete?

Sorry if you choked on your doughnut while reading the title but, really, there has been so much written about CEO’s and their lack of ethics but their abundance of perks; about how leaders are failing every stakeholder they answer to and about how, like the dodo, management as a practice is becoming extinct.

How did things get this bad? Like Wile E. Coyote, didn’t we see Roadrunner aiming that anvil right at our heads?

Here’s my theory: we brought it on ourselves; we asked for the anvil. Why?

• We continue to hobnob with people who look like us and think just the way we do.

• We ignore social media as a passing fad or something IT needs to eliminate from employees’ Internet permissions.

• We haven't picked up on the fact that people are organizing online in communities that criss-cross time zones, date lines and borders to innovate, collaborate and create their own products and services. What's irrelevant are buildings and organization charts and titles.

• We talk engagement but secretly believe “they” are lucky to have a job.

• Change is for everyone else.

• We've been drinking the Kool-Aid of “shareholder value” as the only means to an end.

• And follow it up with a chaser of re-engineering as a synonym for de-layering, downsizing and off shoring (but, oh, that short term lift to the bottom line!).

• We are rock stars, aren't we?

I held management positions for twenty years; I know what it’s like to slog away and then be rewarded for my efforts with a fancy title and a fancy car. The problem is, the Roadrunner is on our tails, with a stick of dynamite.

I am really raving about this issue because there is so much more that managers can do not only save ourselves but also to make a difference in our companies and to the employees who report to us. For a less heated rant, I recommend an article titled, The End of Management by Alan Murray, which appeared in the Wall Street Journal on August 21st.

In my next blog, I may rant less and offer a few solutions to an issue I didn’t know meant this much to me – until now.