Test Your Assumptions When Planning

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It’s fall and the time of the year again when most business leaders head to the conference room for their annual planning process. For some it’ll involve new goals and strategies. For others it’ll just be a budget. However you approach it, the process of planning involves a lot of assumptions, many of which are taken for granted. We often give little thought to the assumptions that influence, sometimes in a big way, the direction and distance the business will go in the forthcoming year.

These assumptions are our truth and yet, they’re likely not the truth at all, they’re just assumptions that we’ve elevated to the level of hard facts and then taken for granted. We get locked onto our assumptions and to some extent that’s OK. Assumptions are how we make sense of what we hear and see around us. They provide a framework for our work and allow us to operate in a complex world with new information coming at us from every direction. However, nothing in our world remains constant and if we don’t closely examine the assumptions by which the company runs, we’ll soon find ourselves left behind.

The foundational building blocks of any business plan are the assumptions. They are the undergirding of every strategy, idea and budget. The Rand Corporation defines an assumption as “an assertion about some characteristic of the future that underlies the current operations or plans of an organization.” Certainly market research, competitive analysis, industry research and more are important. But those things are really just input into the conclusions and assumptions we draw from it. Like the report that’s been distributed throughout the office forever that no one seems to need, assumptions have a way of surviving long after their useful life is gone. It’s for these reasons that every planning process should involve some degree of assumption validation. Testing assumptions isn’t a difficult process, but it is a deliberate activity you should include in your planning calendar. There are several simple but important steps to follow.

Seeking Different Assumptions

  1. The first step involves creating the environment where team members feel comfortable and are expected to challenge key assumptions in the business and the plan. Let them know that you’re no longer sure that everything you believe as factual about the company or marketplace is still accurate. This is easier said than done because by definition our assumptions are our truth and when a question is raised about one of them, it’s normal to defer to the subject matter expert in the room, the keeper of the assumption, who will reassure the team that it’s still the case and you can move on to the next question.
  1. Ask yourself – What are the key assumptions that drive the plan, that if inaccurate, would take planning in another direction? These are the assumptions that are central to how the business interacts in the marketplace.
    • What do you really know about customer attitude toward your company?
    • Is there a continuing need for a product or service to remain in the portfolio (we all have some that should go, but we hang on to them thinking we’ll suffer harm if we eliminate them)?
    • What features or services do customers value most?
    • Why do your customers buy from you?
    • Is there a significant customer base?
  1. Once you’ve considered the list of key assumptions, you have to get comfortable with the next question – How do we know? I have a friend who likes to say that in any conversation with an employee or customer, you’re always just two questions away from the truth. The truth is we stop asking too soon. Reflect on the history of each assumption – Where, when and who did it come from. Does it still serve your best interests? The answer to these questions can take some time to answer so it’s good to begin this process early or, better yet, make it a part of communication throughout the year. I’ve seen too many plans forge ahead with old assumptions because there just wasn’t enough time to dig into them further. Even when there was some doubt about their accuracy, pushing it off for another year conveniently took the team off the hook of dealing with the work that might have had to occur if the assumption was proven inaccurate.
  1. Be honest with yourself. If you’re not sure the assumption is accurate but you don’t have the time or desire to dig deeper to find out, say so. At least you’ve got something to follow up on, maybe as a part of the annual plan. Guessing is acceptable so long as you’re willing to bear the risk and potential consequences of the decision.

In summary, don’t get carried away calling into question every assumption. Pick a few big ones that are long in the tooth and take the time to validate their accuracy. In another time you can look at a few others. The worst case would be, you’ve put in time to validate that you’re in touch with the key drivers of your business. That in itself is a pretty good outcome.

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Climbing to New Heights – Acheiving “Nearly Impossible” Goals

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Michelangelo said “The greatest danger for most of us is not that our goal is too high and we miss it, but that it is too low and we reach it.” Such is the case with many strategic planning processes.  During the annual planning process, goals, strategies, action plans and budgets are developed. It’s a neat and organized process but the implication is that when the goal is set, a plan or at least a fairly solid idea exists for how to deliver the results. Sales organizations know all to well that after they provide a sales forecast they’ll need to answer the question “What’s your plan to get it?”

The problem with this model is that the goals are based largely on what is known today. It satisfies our mind’s need for structure and certainty and enables us to complete the plan. Making matters worse is that compensation and rewards are often tied to the goal. This is certain to result in plans that are safe and achievable, but low in potential results.

High-performance individuals and organizations though, have found that break-through performance is not achieved by an attitude of determination and grit, but rather an attitude of confidence and optimism. They take on opportunities and face challenges larger than they’ve ever seen before, not with the knowledge for how they’ll accomplish it, but with the internal confidence that they’ll grow into it. They’re not intimidated by what might stop other organizations. They hear the same news, live in the same economy and face the same problems, but they do so with a calm resolve and belief that they’ll find the answer. It’s not risky when they know they can do it.

Goals and Motivation
One of the wonderful characteristics of human beings is that we are goal oriented. We are able to achieve great results when we’re motivated. The more attractive and exciting the goals, the more energy and creativity we have to solve them. Goals set in the context of what we “believe” we can accomplish are not motivating goals. In an effort to make goals achievable, we often remove the catalyst to motivation and energy.  When the internal self-efficacy of an organization is low, it’ll expect little of itself. For our own sanity and to avoid disappointment, we won’t let ourselves expect something we don’t believe we can create. Therein lies the big problem with large, seemingly impossible goals. If the expectations and confidence of the organization are low, so will be its reach and results. The goals of the organization will be limited and the creativity and energy of the organization will match what, in its collective mind, it believes it can cause to happen.

Creating Disruption
Setting large goals throws our system out of order. They challenge what we “know” and push us beyond the boundaries of our comfort zone. They send us on a journey where the path and outcome are unknown.  It creates a problem for us, a gap between what we believe we can accomplish and the picture of a challenging but potentially beneficial future.  It’s a gap that our minds are programmed to close. If we’re drawn to the challenge we’ll move forward into uncharted territory seeing solutions and possibilities beyond the tried and true. But if the goal is too intimidating or unattractive, we’ll move backward to the old performance level, fully able to rationalize the decision. We get either drive and ideas to move toward what we want in the future, or ideas and drive to stay where we are.

The Role of Coaching and Leadership
The solution is to build an organization of individuals with high self-confidence and a strong belief and expectation in their ability to achieve great outcomes. This is arguably the most important coaching responsibility leadership has. It’s a concept with tremendous potential for improving individual and organizational results but one that’s overlooked in most organizations.

Leaders should keep asking themselves, not “where do we think we will be?”, but rather “where do we want to be?” They need to keep creating gaps between where they are and where they want to be. They need to awaken the potential capability of the organization with goals that challenge the organization to go where it’s never gone before. Then, with an energized workforce, inspired by a compelling new future and encouraged by leadership, let the human creativity and energy that’s unleashed invent how it will be accomplished. With the right leadership I’ve seen organizations “surprise” themselves by accomplishing things they once thought unachievable.

Sea World doesn’t select the smartest dolphins in the ocean for its attractions. It selects dolphins and then through inspired coaching and training is able to accomplish incredible feats of performance. Likewise, truly great organizations don’t have fewer problems than other organizations. They don’t start out with the most brainpower, better employees or more money. In fact, sometimes they face incredible odds. But they have a way of looking at things, a way of seeing big challenges as exciting opportunities, and a way of hanging in there that almost guarantees success. They live by an attitude of optimism and, when challenged with an almost impossible goal, have an expectation that what they don’t know, they can figure out. It’s all a matter of attitude.

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Avoiding the Pitfalls of Planning

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Setting strategic direction is never easy, but when leaders don’t get the results they’re expecting they often overlook the role human nature played in the outcome.  While most CEOs acknowledge the traps, many don’t see the extent to which they contribute to them. When planning becomes an exercise in doing it right rather than doing the right thing, results will suffer. By focusing on five common pitfalls, planners can increase the quality of the plan and the likelihood of better performance.

Failure to address fundamental problems of the business – Planning should be a purpose driven activity, and a good place to start is with an honest appraisal of the challenges facing the business. The important word here is “honest”. From a behavioral perspective, we experience anxiety when our expectations don’t match the results we’re getting and we subconsciously hunt for an explanation to resolve this conflict. Group discussion of the underlying causes behind poor performance can result in rationalizing the circumstances to explain them. It feels good to breathe deep once the “truth” behind the results is identified, but in doing so management relieves itself of accountability for the performance of the business. How often has the recession been used to rationalize poor results rather than a lack of internal vision, talent or plan execution? Sure the recession had an impact. Certainly some businesses experience a seasonal impact, but using those external situations to explain results can be a convenient way to avoid taking responsibility for them.  In short, if you fail to critically assess the capability of the company to achieve its goals, you’ll have hopeful plans with little chance of success.

Over optimism – The planning process is, by its very nature, an exercise in projecting actions and results we’d like to see. I’ve never seen a company plan to take itself backwards. Planning is an opportunity to step out of the present challenges facing the business and move into a future where the imagined circumstances and results can be much different than today. In a way, it’s like a buffet dinner; when I’m planning everything looks good but when I sit down to eat I discover that I’ve bitten off more than I can chew.

There’s a narrow line that separates aggressive stretch goals from over optimism. That line is crossed when plans for short term results are projected to produce similar long-term outcomes without a sound basis for the expectation. The result is a “hockey stick” forecast. Focused cost cutting efforts can produce meaningful results and may be a good strategy to improve competiveness, but jumping to the conclusion that continuous improvement will generate similar results without a realistic assessment of what it’ll take to do it can lead to unrealistic projections and disappointment.

Failure to link plans and execution – Few things kill a good plan more than getting caught up in the day-to-day demands of business. I’ve seen many good plans get sidetracked because the business got either too busy or too slow. Well intended plans get pushed off and eventually are reassigned to next year’s plan. While there’s always a reason to explain why execution fell by the way, it often stems from a failure to monitor and adjust the plan throughout the planning horizon.

Planners need to create direct and specific linkages to actions with a feedback loop. Managers should understand their contribution to the overall goal and strategy, actions to achieve results should be in alignment with the overall strategy and managers should be held accountable for their results. Then, as business changes, the plan should be assessed and adjusted, not abandoned.

 Poor communication – I’ve seen too many strategies that were incomprehensible to the employees. Others remain in the hands of the senior planners and managers with little communication and linkage to the workforce where responsibility for carrying out the plan resides. Strategies that are simple to understand, few in number and with goals that are measurable at all levels have the best chance of success. Employees must be able to see themselves achieving the goal and contributing to the higher strategy if they are to be engaged and the plan to succeed.

Putting form ahead of function – I’ve been asked many times what a good strategic plan should look like. What components should it have and in what order? The problem with this line of thinking is that the planner has put the form of the plan ahead of its function. Marketing plans, business plans, or budgets that begin with form seldom have the substance or linkage to execution necessary for success. Many don’t make it out of the executive suite and wind up living on the shelf until next year.

Making matters worse is that the same plans are often filled with slogans and lofty exhortations that, while sounding strategic, lack the specifics necessary to engage employees and produce meaningful results.

Planning is a necessary step to achieve best results in business. But to be effective it has to be practical and achievable and that means it’ll be different for every organization and situation. Avoiding the basic pitfalls mentioned above will go a long way to making your plan practical and productive.

If you’re not getting the results your looking for with your planning and want to discuss it further, you can respond to this post or use the “contact us” tab on this page.

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Soft Leadership and Tough Compassion

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Too often we have the notion that compassionate leadership is soft. Compassionate leadership isn’t soft. It’s anything but soft. It sets high expectations and expects everyone to perform at their best for the good of the team in all circumstances. It accepts nothing less than a full measure of performance and accountability. The problem is that leaders sometimes run off track when they confuse soft, coddling leadership with compassion.

Tough, compassionate leadership calls for extraordinary commitment that stretches individuals. Stretching recognizes the potential in people and calling them to a higher level of performance shows respect for them. T.S. Elliot said “Only those who will risk going too far can possibly find out how far one can go.” Some leaders, fearful of the team reaction to a challenging assignment soften the load before its necessary. Rather than focus on the purpose of the task, they speak of the burden it might cause. There’s no question that the burdens are often real but by apologizing for them in advance or offering an out, we deny the team the opportunity to reach deep inside to discover their best and find a way to overcome them. Every opportunity a leader creates before it’s needed sets up a potential excuse for low performance. Doing so implies the work isn’t worth their best efforts. Lowering the expectation is even disrespectful to the individual. Tough compassion expects exceptional performance and only after its first given should we look to lighten that burden. Doing so then, is truly compassionate.

Tough, compassionate leaders stretch individuals but never leave their side. They’re sensitive to the real and different limits of every individual and respond accordingly. They recognize that while there may be differences of experience, there are no superstars on the team. Everyone is held to the same standard of performance, that being their best. That doesn’t mean though, that they take wounded or weak into battle. No team can be successful when it’s held back by individuals incapable or unwilling to give all they have. Tough compassion protects people while they give their best, not before. It acknowledges the obstacles and problems but believes in the team to overcome them. Soft leaders willing to accept less from the team will seldom see their best.

Compassionate leaders also expect more of themselves than they do of others and in doing so set the example for sacrifice and commitment. Expecting the best connotes how you feel about yourself and others. Strong compassionate leaders are also transparent. They are willing to expose their short-coming and expect others to do the same. By acknowledging their frailties, the team is actually drawn together and made strong like a rope is made strong by the weaving of individual threads.

Compassionate leaders also believe and communicate that the mission is worth their commitment and sacrifice. It says I believe in you and that together, we can do it. Also, in holding everyone, including themselves, to an expectation of high performance, leadership is making a strong statement of the potential they see in individuals and the team.

Compassionate leadership also knows when to rest. Constant pressure will wear down and demoralize any team. Creating toughness and resiliency in people means knowing when to take time off and recover. The compassionate leader watches the signs and knows that from time to time, individuals need to be pulled from the battle so they can recover and return fully energized. Take time also to celebrate the team’s hard work and commitment. Just like lowering the goal devalues the individual; failure to celebrate the win devalues the success of their sacrifice and effort.

If you’d like to discuss how to transform performance through leadership, respond to this post or use the “contact us” tab on this page.

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Job Posting: Truly Compassionate Leader

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On September 8, 2009 Captain William Swenson and his unit were engaged in a fierce seven hour battle with Taliban rebels in the Ganjgal Valley near the Pakistan boarder. On several occasions during the firefight, Swenson braved intense enemy fire to pull his wounded and dying men from the battlefield to safety.

One of the greatest symbols of his leadership style was captured by a helmet-cam and later posted to YouTube. After loading one of his mortally wounded men onto a medevac helicopter, Swenson is seen leaning over and kissing the soldier on the forehead before returning to the battle. Later in an interview, the Captain said he wanted to convey with that gesture that he was proud of his soldier for fighting so valiantly, that his work for the day was over and it was time to leave the battle. He went on to talk about his responsibility to his soldiers and his love and pride for those under his command. For his leadership and bravery that day, Capt. Swenson was awarded the Congressional Medal of Honor.

When I saw this I was overcome by the compassion he showed for the people he was responsible for. I began to ask myself, why don’t we see this type of leadership and level of caring in business? In the last decade there’s been much talk about servant leadership. I’ve always found the term to be redundant. I was taught, and as Capt. Swenson demonstrated that day, that real authentic leadership has always been of a servant nature.

It makes me wonder, and you should too, where did we get off track in business? Why is it that the expressions of sincere servant-hood are so absent from many work environments? One answer may lie in the reward systems. In the military awards are given out to individuals who often sacrifice themselves for the good of those they’re responsible for. To the contrary, in business, awards (bonuses, promotions, salaries, etc.) are often given out to those who’ve achieved a lot for themselves, sometimes at the expense of those they’re responsible for. Perhaps we’ve got it upside down. It explains to some extent why books and programs on servant leadership are all the rage. It’s because the standard has become the exception.

Another reason we don’t see enough of truly compassionate, authentic leadership may be rooted in the business culture. Why is it that soldiers will willingly face life and death situations for their leader but you can’t get an employee to complete a report by Monday? It’s not that they love war. It’s that they love their leader and they love their leader because they know their leader loves them first. So how is that communicated? It’s not done with words. It’s done through a commitment of training and preparation ensuring the greatest opportunity for success. It’s done through heat of the battle examples. It’s the officer voluntarily putting himself in harm’s way to protect those he’s charged to look out for. How long has it been since you witnessed that in business? This relationship is no different than raising a family.

The Navy Seals have a code they live by – “Leave no man behind.” Implied in it is the message that there is no more important person than the one next to you and that every member will sacrifice themselves if necessary to protect and stand by their teammates.  It’s rooted in a fierce loyalty and love for one another.

A number of years ago I worked at a company where I had a coworker whose wife was gravely ill. Her condition meant he was going to be off work for quite some time to provide care, much longer than he had vacation benefits accrued. Without any mention or request, employees started offering their vacation to their coworker. Why did they do that? Why was it given up as a gift, compassionately and without a hint of obligation? It’s wasn’t something in the water. It was though, something in the culture. I believe those employees were only acting naturally. They did so because they knew how their coworkers and their company cared about them. They were serving just as they had been served.

If you think business has no place for genuine, compassionate leadership, tell that to a tender warrior like Capt. Swenson. Guard your team. Protect them. Defend them. Love them and if necessary, be willing to sacrifice yourself for them. If you don’t watch out for them, there may be no one left to watch out for you. If you’re truly a servant leader then you must be the first to give and the last to receive. When the team sees the sacrificial love of their leader they will give the same back to their leader and to each other.

What we don’t need today is another leadership program with new slogans, exhortations or clever models. What we do need is a leadership renaissance – one which calls us back to the principles of authentic and original leadership rooted in the basic human needs of every individual. One like that lived out by Capt. Swenson for all to see that day in September 2009 in the door of a medevac helicopter.

If you’d like to talk more about how to create a culture of accountable compassionate  leadership, respond to my post or use the “contact us” tab on this page to reach me.

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