Big Data – Not All Metrics Are Created Equal

Big Data

By Mike Myatt, Chief Executive Officer, N2growth

When it works, Big Data can be a beautiful thing – what organization wouldn’t want more actionable information with which to feed better data driven decisions in the quest for a competitive advantage? But in the race to acquire Big Data, leaders can easily wander off course with devastating results. According to EMC (disclosure: client), only about 1/3 of companies are able to effectively use Big Data. In today’s post I’ll examine the pitfalls awaiting those companies in pursuit of Big Data.

Clearly some organizations (Amazon, Google, The Federal Government, etc.) are better positioned to exploit the opportunities afforded by Big Data than others. Here’s the thing – not every corporation has access to, much less the ability to collect, assess, and operationalize data in exabytes (about 1 Billion gigabytes). The amount of infrastructure and staff it takes to integrate data from disparate, yet ubiquitous inputs is staggering. The harsh reality is that for every one company able to harness Big Data, hundreds will fail in their attempt to do so.

MBO’s, KPI’s, segmentation, analytics, and now Big Data. All leaders measure things – the question is are they measuring the right things, for the right reasons, and at the right times? While I don’t dispute the value of Big Data, I would rather see organizations realistically focus their efforts on operationalizing knowledge at whatever volume or velocity they can currently handle and then worry about scale. Let me be clear – metrics are at best useless, and quite possibly harmful, if the wrong things are being measured, and especially where quantity is valued over quality. In a previous column on Forbes I caution leaders about relying too heavily on “data” by explaining not all data is good data (this is worth reading).

If you read the Forbes piece, and understand the difference between data and knowledge, we can turn our attention to which metrics you should be interested in to begin with. While there are virtually endless amounts of financial and non-financial metrics that can be assessed, I believe that most measurements can be broken down into the following 5 categories:

  1. Static Historical Measurements;
  2. Quantitative Return Measurements;
  3. Qualitative Return Measurements;
  4. Quantitative Performance Measurements, and;
  5. Qualitative Performance Measurements.

It has been my experience that most businesses at least attempt to measure items 1 and 4, but often times fail to measure the other 3 categories, which also happen to be the most meaningful measurements. The best managed companies measure all 5 categories (as well as various subsets) with their focus being on items 3 and 5.

Let’s begin by stating what should be the obvious – all businesses need to monitor the basic static financial measurements of revenue, expenses, break-even, earnings and cash flow. While analyzing these drivers will give you some basic operating information, they are also somewhat myopic. The reason I say this is while historical analysis is important, it is taking the next step of using these historical measurements as baselines to calculate forward looking return drivers that will help you fine tune your business. While the following overview is not by any means exhaustive, it provides a great jumping-off point to fuel productive thought and conversation.

Quantitative Return Drivers:
Metrics such as Return on Assets (ROA), Return on Equity (ROE), Return on Investment (ROI), Return on Cash (cash-on-cash), and Return on Human Capital (ROHC) will give you more useful information than the static calculations mentioned above. The great thing about return analysis is that each area can be broken down into several more refined qualitative return calculations.

Qualitative Return Drivers:
A great example of qualitative return analysis would be contribution margin (CM), which is a qualitative measure of segment, team, or individual performance on profit. Another example would be Return on Innovation which would be the qualitative measure of the impact on new initiatives. These types of qualitative return drivers allow you to make forward looking investment decisions that can have immediate impact to the business.

Quantitative Performance Drivers:
Measurements in this category would be items like revenue hurdles, billable time, utilization, production hurdles and service levels. These are the metrics of how an organization performs against its benchmarks.

Qualitative Performance Drivers:
Measurements in this category are where an organization truly becomes productive with analytics. These sets of metrics focus on the measurements surrounding things that generate influence, improve culture, develop talent, create engagement, build teams, manage the consumer experience, improve customer satisfaction and increase brand equity. Getting to the qualitative level of performance measurement is difficult in that it is often necessary to overcome a set of traditional leadership behaviors and beliefs.

Ask yourself this question…do you measure the metrics that are critically important, or just the ones that are obvious and easy to measure? If company leadership can make the attitudinal adjustments necessary to create accountability and focus on qualitative performance metrics, they will find it’s these measurements that help to catalyze growth, enable execution and create dynamic organizations.

Thoughts? I’d also be interested in hearing from you with regard to any measurements/metrics which have been particularly beneficial to you.

Change: 3 Essentials For Every Leader

Change: 3 Essentials For Every Leader

 	Change: 3 Essentials For Every Leader

By Mike Myatt, Chief Executive Officer, N2growth 

The sustainability of any organization hinges on leadership’s ability to understand, embrace, and implement change. Whenever leaders are surveyed about what keeps them awake at night, “change” is usually at or near the top of the list. When change initiatives fail, so do leaders. When brands fall into decline, and organizations implode, it’s often due to a company’s inability to change. In today’s post, I’ll share three fresh approaches to change.

Try to envision a future without change… it’s nearly impossible to do, isn’t it? A world without change, a world frozen in time, a world stuck in a perpetual state of status quo – it’s certainly uninspired, and for me, it’s altogether unimaginable. While most of us hold a worldview that embraces, if not demands change, this isn’t always the case with business leaders. Sure, most leaders talk about change, but do they really lead it? Talking about innovation is not the same as bringing it to life.

The best evidence of the importance of change leadership is what occurs in its absence– mediocrity, irrelevance, and ultimately, obsolescence. Leaders concerned with the cost of change should be far more concerned about the cost of not changing. The best of human ingenuity and accomplishment are experienced through change. To learn, create, advance, develop, and sustain, we must change. If you accept this premise as true, then my question is this: why do so many businesses struggle with the practice of change? The answer is regrettably obvious– many leaders are simply inept at leading change.

Following are three ideas, which will help you lead change more effectively:

#1: Pull Change Forward
Stop talking about change as a theoretical future state and pull it forward into the present. Change is the path to the future, but the future isn’t some ethereal, distant event – it begins in just a fraction of a second. While all great leaders must navigate the present, they must do so in anticipation of the future. The best leaders understand the present is nothing more than a platform for the envisioning of, and positioning for, the future. If you want to lead more effectively, shorten the distance between the future and present.

#2: Change Is Not a Process – It’s A Mindset
Leading change is far more than a process– it’s a cultural mindset. Change requires leaders to embrace dissenting opinions, give voice to positional differences, and to constantly challenge static thinking. While leading change does require skill, it first requires a decision to value change, and then it demands the courage to act. Leadership isn’t about being right; it’s about achieving the right outcomes. Change must be more than a buzzword used by leadership – it must be embedded within the strategic vision, cultural design, and operating fabric of the enterprise. Leaders who protect the status quo through control must surrender to change in order to secure the future for their organization.

#3: Leadership IS Change
If there are no visible signs of change in your organization, I would suggest your leadership isn’t leading. Change must become a leadership competency and priority. Leaders who fail to deliver change will be replaced by those who can. Leadership is nothing if not fluid, flexible, and forward moving – none of these things can occur without an emphasis on change. In fact, I would go so far as to say “leadership IS change.

Bonus: This is where it gets tricky – not all change is good change. Just as a lack of change can bring demise, Ill-conceived change, change solely for the sake of change, or change driven by hidden/self-serving agendas can ruin even category dominant brands. Make sure the drivers for change are in alignment with corporate values and vision, serve the best interests of the consumer, and lead to a higher purpose.

If you’re in a leadership role, it’s in the best interest of the organization, and those you lead, to embrace change at every level.

Thoughts?

Other Posts On Change/Innovation

Strategy, Capability & Really Bad Advice

Strategy, Capability & Really Bad Advice

Strategy, Capability & Really Bad Advice

By Mike Myatt, Chief Executive Officer, N2growth

Today’s post is a rather short rant, but one I felt compelled to put forth. I just finished reading an article where the author (a self professed innovation guru) recommended strategy be aligned with capability, and that to allow ambition to exceed capability is a nothing short of a recipe for disaster. If this sounds like rational thinking to you, I’d encourage you to read the text that follows for a bit of a different perspective.

Let me get right to it – if you want to fail as a leader then please follow the flawed advice given by the wizard of innovation mentioned in the opening paragraph. But if you want to rise above the crowd and become a truly innovative leader, I’d ask you to regard said advice for what it is – more of the same. It’s just another well-intentioned sound bite that will destroy your company and your career if you choose to follow it.

Strategy should never be dumbed down to match capability. In fact, quite the opposite – capability should always be in the process of being upgraded to keep pace with strategy. If a leader dilutes the strategy because of a lack of capability, they have already failed – the game is over before it starts. The best leaders set their strategy and then work tirelessly to develop or acquire the needed capabilities. It is simply impossible to cede opportunity to others, settle for mediocrity, and hope to somehow remain a competitive enterprise.

Here’s the thing – leaders who complain about a lack of resources, are simply communicating they are not very resourceful. Great leaders find a way to develop and/or acquire the best capability in order to create a certainty of execution around a winning strategy. If you want to fail as a leader, hire B and C talent and ask them to win with an inferior strategy. Thinking in a limited manner will only accomplish one thing – it will limit your future.

Sadly, history is littered with leaders who place self-imposed limits on themselves, their organizations, and their workforce under the guise of rational thinking. These are the brands that fall into rapid decline as they fail to innovate and change. Leaders whose aspirations don’t constantly exceed their capability have no vision – they are irrelevant on the way to obsolete and probably don’t even know it.

Real leaders know there is always more to be accomplished. They understand good must become better, and that better must be in constant pursuit of best. They also understand that best is only captured in the moment, and they must revert back to bettering their best in order to remain competitive. They understand business is not static, and they view things on a continuum. Great leaders aggressively pursue better.

Leadership is not for the faint of heart, and leaders not willing to innovate and adapt should not be leading anything. Great leaders beat their competition to the future, while failed leaders passively, ignorantly, or arrogantly surrender the future to their competition. The moment you become satisfied with your capability is precisely the moment in time when you are in greatest danger as a leader.

Whatever your capability is, it’s not good enough. Thoughts?

Extreme Makeover Leadership Edition

Extreme Makeover – Leadership Edition

Extreme Makeover Leadership Edition

By Mike Myatt, Chief Executive Officer, N2growth

The fastest transition from inept to adept occurs when leaders turn the topic of change on themselves. When was the last time you changed something about you? Not someone or something else, but your thinking, your philosophy, your vision, your approach, your attitude, or your development. Most leaders are quite skilled at embracing change – except when the focus of the change initiative happens to be on them.

Turn Innovation Inward.
Innovation continues to be a hot topic, and rightly so. Few things can change the course of a project, career, company, category, or industry like successful efforts in innovation. That said, there is one aspect of business often-overlooked by change agents when it comes to innovation, and it also happens to be the area that offers the greatest potential returns – leadership. If we’re consistently talking about the importance of leading change, it should be just as important to recognize the importance of changing how we approach the practice of leadership. The truth of the matter is if leaders spent half as much time applying the rigor and discipline of change to themselves as they do talking about the practice to others, I wouldn’t be authoring this post.

The Practice of Leadership is in need of a Makeover – an Extreme One.
“Leadership” has been inappropriately hi-jacked by the politically correct who mock it, the avant-garde who belittle it, the naive who discount it, and the public who seems to be growing tired of hearing about it. There was a time when the dismissive attitude people displayed toward leadership befuddled me. I was left wondering how we could have arrived at such a place? How could something so valuable be trivialized by so many? Then it dawned on me – people are tired of leaders who talk about change, but fail to embrace the concept they too must change.

Are We Better Off Today?
Think about this for a moment – with all our experience and all the research, with all the resources and all the focus on leadership, do you find it perplexing, if not altogether disturbing, that our world has never been more lacking for true leaders? Casual observation might lead you to conclude leadership has devolved rather than evolved. If you pay close attention to the media and world events, it would appear those serving themselves greatly outnumber those who place service above self. Here’s the thing - we’ll never all agree on what leadership is, or is not, but I think most reasonable people will concur it’s time for a change.

Society has essentially commoditized leadership resulting in a leadership bubble of sorts. Because leadership has become the latest version of an entitlement program, too many unqualified leaders have been allowed to enter the ranks. When leadership is perceived as little more than a title granting access to a platform for personal gain, rather than a privilege resulting in an opportunity to serve, we’ll find it difficult to convince leaders of the need for change. We’ll also continue to find ourselves in a crisis of leadership. We must either convince poor leaders to change their approach or we must change leaders.

It’s The People – Always.
At its essence, leadership is about people. At its core, leadership is about improving the status quo, inspiring positive change, and challenging conventional thinking. As long as positional and philosophical arguments are more important than forward progress, as long as being right is esteemed above being vulnerable and open to new thought, as long as ego is elevated above empathy and compassion, as long as rhetoric holds more value than performance, and as long as we tolerate these things as acceptable behavior, we will all suffer at the hands of poor leadership resistant to change.

Don’t Wish for Change – Demand It.
So, how do we get leaders to change – we demand it. It’s less about structure and more about vision and philosophy. Nothing inspires change and innovation like great leadership, and likewise, there is no more costly legacy system to maintain than poor leadership. It is tolerating poor leadership as the norm, and not the exception, which allows the status quo to prosper, and the inept to thrive.

Organizations should strive for and demand that a culture of leadership replace rigid frameworks. We must transition from highly structured organizations to loose communities of collaborative networks. Complex decisions should no longer be reserved for someone sitting atop a hierarchical structure, but must be driven to the absolute edges of the organization. Think open-source not proprietary, adaptive not static, actionable not theoretical, and progressive not regressive. The best way to create a culture of leadership is to value and reward authentic and effective leadership open to change. Create a culture based upon an ethos that empowers, attracts, differentiates, and sustains. The only culture that flourishes over the long haul is a culture of leadership. A culture of leadership can only exist where the willingness to change is valued.

Thoughts?

Innovations Best Kept Secret

Innovations Best Kept Secret

By Mike Myatt, Chief Executive Officer, N2growth

Those of you who frequent this blog know that I’m not a huge fan of either/or propositions. In most, if not all cases, decisions that are made on this basis simply constitute a lack of depth and understanding. This particularly holds true as it applies to the topic of  innovation methodology. Most innovators view innovation from one of two perspectives: those who believe disruptive innovation is superior to incremental innovation, and those who take the opposite side of the argument.  In today’s post I’ll share innovations best kept secret - a different argument altogether.

I want to begin by making the argument for incremental innovation.  It is faster, easier and cheaper to refine something than it is to create it. Let’s face it, not all oceans are blue. Even if you find a blue ocean to sail in, there is a lack of certainty as to whether you’ll navigate it successfully, and even if you do, as to how long you’ll remain the only ship in the ocean. I think most rational people have concluded it is much more profitable to disintermediate a market than it is to build one from scratch.

The main reason attempts at disruptive innovation fail more often, and don’t happen with more frequency and velocity is that human nature is to make things harder than needed by looking in the wrong places for disruptive opportunities. The real trick, the secret sauce if you will, is to focus on incremental innovation that becomes disruptive. Don’t think incremental vs. disruptive – think incremental and disruptive. This is the option that allows innovators to have their cake and eat it too. This is what levels the field by bringing disruptive opportunities in reach of companies that don’t have the time or resources to create new markets.

Let me be as clear as I can - disruptive innovation isn’t limited to a sole focus on creation of something new. Disruption can occur by disintermediating, refining, re-engineering or optimizing a product/service, role/function/practice, category, market, sector, or industry. The most successful companies combine disruptive thinking with incremental approaches in order to manage risk, gain time to market advantages, add value to core initiatives, and to leverage built-in efficiencies and economies of scale.

The problem with most incremental approaches to innovation is that companies don’t think big enough. Most incremental approaches more closely resemble process engineering/automation efforts with a focus on cost reduction through gaining efficiency, not on revenue creation by causing disruption. Removing self-imposed restrictions on thinking will result in opening up more opportunities to innovate around.

The good news is this: there’s an easy fix to this antiquated way of thinking which is currently crippling the innovation efforts of many companies, and it’s found by adhering to the following 6 step process:

  1. Define: The first thing that needs to happen is to define what constitutes disruption. Set a standard and then stick to it. I’m not suggesting that any initiative not meeting the definition by halted, but I am suggesting that you don’t fool yourself and label something as disruptive when it is clearly not.
  2. Identify: Now that you’ve defined what types of projects you’re looking for, aggressively begin pursuing projects that meet the standards.
  3. Assess: Once a potential project has been identified, put it under intense scrutiny and understand what you’re dealing with before you pull the trigger. Based upon the standards that were set in the definition phase create a scoring/ranking system based on key metrics and prioritize initiatives accordingly.
  4. Plan: Be strategic. Great outcomes rarely occur when initiatives are under-resourced and/or poorly led. Deploy your best resources against your greatest opportunities. Make sure you set projects up for success rather than failure.
  5. Implement: Get tactical. The best strategies will end-up facing certain failure unless planning transitions into practice. Without prudent, decisive, consistent and productive forward progress, plans aren’t worth the paper they’re written on. Planning without implementation is an exercise in frivolity.
  6. Monitor: Everything in business, including the best laid plans, are subject to changes in circumstances and market conditions. Put simply, static plans are bad plans. Make sure that all efforts are measured against milestones, benchmarks, deadlines, budgets, etc. If the plan needs to be nuanced in order to achieve success, then have the flexibility engineered into your plan to allow for such changes.

As always, I welcome your thoughts and opinions in the comments section below…

When to Restructure

When to Restructure

By Mike Myatt, Chief Executive Officer, N2growth

To restructure or not to restructure? That is the question many a business is forced to ask at some point during their life cycle. The mere discussion of corporate reengineering can cause fear, anxiety, and in some cases even panic. This is so much the case that some CEOs will avoid restructuring initiatives at all costs. There are even some business theorists that warn against undertaking complex restructurings because of the great risks involved. My question is this; since when have fear and avoidance become prerequisites for success as a CEO? Give me real leaders who possess courage, vision, and a bias toward action, and spare me the timidity of mediocre managers posing as leaders. In today’s post I’ll examine the benefits of, and the need for corporate reengineering…

In an earlier post entitled Leadership Is About Breaking Things, I stressed the need to shatter anything that embraces the status quo. Anybody could be a CEO if business were a static proposition. If change and innovation weren’t key contributors to sustainable success, and the enterprise could just run on auto-pilot, you could replace the CEO with a General Manager. The fact is business is not a static endeavor. Quite to the contrary; there are few things that require as much fluidity as effectively growing revenue, increasing profit and driving brand equity. In fact, I would go so far as to say that CEOs who are not consistently reengineering elements of their business fall into one of the following two camps; 1) They have a perfect business, or; 2) They are an ineffective CEO.

What do great CEOs do when the business model, the strategic plan, and the revenue hurdles don’t seem to be in alignment? They make changes. They don’t sit idly by and watch the business lose market share, suffer margin erosion, see their competitive value propositions vaporize, or watch their brand go into decline. Great CEOs are willing to make the tough decisions…that’s what they’re paid for. Facing reality, and being able to make what are often times very painful organizational/structural decisions are the hallmarks of great CEOs. With less than 60 days before we enter 2012, I want you to do a gut-check: who and what are not going to be part of your business next year? And who and what need to be added to your business next year?

In an attempt to avoid confusion as to what I’m speaking about, I put together the following definition of corporate reengineering: “Corporate Reengineering is leadership recognizing, taking ownership over, and acting to correct strategic or tactical business flaws, and/or to realign elements of the enterprise with current or anticipated changes in market conditions consistent with the corporate vision.” This isn’t rocket science, rather it’s just plain-old, good leadership. It is actually the fiduciary obligation of a CEO to make the needed changes to protect shareholder value.

So why is it that so many CEOs shirk their responsibility, stick their heads in the sand, and avoid making necessary changes? It is my experience they either lack the personal skill sets, or haven’t built the right executive team to lead change, they just don’t recognize the need for change, or they just don’t care. The good news is there is a cure for all four of the preceding problems: Items one through three can be solved with an emphasis on leadership development and talent management, and item four can be solved by holding the board of directors accountable for CEO performance and firing an apathetic CEO. Following are six representative tips that will help you recognize the need for a reengineering initiative:

  1. Unusual declines in revenue, margin, market-share, customer loyalty, or brand equity.
  2. Even if the above areas are not yet in decline, but you are witnessing unusually slow growth or zero growth you still have a problem.
  3. The inability to recruit or retain tier-one talent.
  4. Current or anticipated changes in market conditions that will adversely impact your business model.
  5. Obsolescence of intellectual property, products, services, solutions, or competitive value propositions.
  6. Perhaps the greatest reason to reengineer is to exploit an opportunity. Windows of great opportunity are not static, and won’t stay open in perpetuity. If you’re not organized properly to exploit the right opportunity it will pass you by.

The bottom line is this…Bleeding is not a healthy thing. Whether you’re experiencing a slow bleed or you’re hemorrhaging, both instances can be fatal without treatment. If your company is in products, services, or businesses that you wouldn’t enter into if you weren’t in that particular arena today – GET OUT! Stop the bleeding, and reinvest your financial and non-financial resources into more profitable endeavors. I don’t believe corporate reengineering to be evil, but even if it is, it is a necessary evil…Thoughts?

Ideas Don’t Equal Innovation

By Mike Myatt, Chief Strategy Officer, N2growth

Ideas Don't Equal Innovation
I had a long conversation yesterday with a friend discussing creativity, ideas, innovation, branding and the like. As a result of our conversation, I decided to dust-off an old post, give it a few updates, and pass along my thoughts, which can be best summarized as “Ideas Don’t Equal Innovation.“ It is my hope to help dispel the myth that ideas are inherently good things. Let me state right from the outset that I place little value on ideas. Not only do raw ideas have little intrinsic value, but they are often very costly. While I stipulate to the fact that ideas can sometimes lead to great things, I also submit that it is more frequently the case that ideas lead to disappointment, and even outright disaster. Those of you familiar with my work are probably wondering if it is really me authoring this text…if you’re baffled at how a champion of innovation can simultaneously be an idea-basher, I urge you to read on, and I promise the congruity will become apparent.

I want to start by actually defining what an idea is, and is not. Ideas do not constitute a philosophy, principle, or strategy. An idea is not synonymous with a competitive advantage, an idea is not necessarily a sign of creativity, an idea does not constitute innovation, and as much as some people wish it was so, an idea is certainly not a business. To the chagrin of many reading this post, ideas in and of themselves are nothing more than unrefined, random thoughts. Ideas on their own accord are really quite useless. The truth can often times be harsh and difficult to hear, but it is nonetheless the truth.

Ideas are a dime a dozen…take a moment and reflect on all the ideas you’ve spawned over the years, or the many ideas that have been birthed by your friends, family, and professional associates and you’ll quickly see that most of them never got lift-off. The problem is that most ideas never get implemented, and moreover even the best ideas when improperly implemented can cause great harm. You see, while creativity is a clearly a valuable asset, unbridled creativity where random, disparate ideas abound outside of a sound decisioning and execution framework will create distraction and chaos much more often than they will lead to innovation. The difference between an idea and innovation is execution – don’t be the “idea” person, be the innovator.

In fact, it is most often the organizations that demonstrate a “heard mentality” when rushing to adopt the latest ideas that are the farthest thing away from being innovative. The net result of being a late stage trend follower is that you will likely experience little more than yet another in a long line of great adventures that ended in frustration due to the time wasted and the investment squandered.  The reality is that many businesses are quick to recognize great ideas, but they often have no plan for how to successfully integrate them into their business model.

My advice to you is not to let your business get caught up in embracing random ideas – at least not without some initial analysis being conducted to determine the likelihood of success. Failed initiatives are costly at several levels. Aside from being costly, a flawed execution can cast doubt on management credibility, have a negative impact on morale, taint the brand, adversely affect external relationships, and cause a variety of other problems for your business.

Every sound business initiative begins with a solid strategic plan. However while most anyone can cobble together a high level strategic plan, very few can author a strategy that can be successfully implemented. In order for your enterprise to turn an idea into a monetizing and/or value creating event you should develop a strategic plan that attempts to measure the idea against the following 15 elements:

1. Framework: The idea should be generated within a solid framework for decisioning. It should be developed as a solution to a problem or to exploit an opportunity. The idea should be in alignment with the overall vision and mission of the enterprise.

2. Advantage: If the idea doesn’t provide a unique competitive advantage it should at least bring you closer to an even playing field. That said, the best initiatives don’t level the field, they tilt the field in your favor.

3. Alignment: Any new idea should preferably add value to existing initiatives, and if not, it should show a significant enough return on investment to justify the dilutive effect of not keeping the main thing the main thing.

4. Assess: Put the idea through a risk/reward and cost/benefit analysis.

5. Simple: Whether the new idea is intended for your organization, vendors, suppliers, partners or customers it must easy to use. Usability drives adoptability, and therefore it pays to keep things simple.

6. Validate: Just because an idea sounds good doesn’t mean it is, and just because you can doesn’t mean you should. You should endeavor to validate proof of concept based upon detailed, credible research.

7. Contingency: Nothing is without risk, and when you think something is without risk, that is when you’re most likely to end-up in trouble. All initiatives surrounding new ideas should include detailed risk management provisions.

8. Realistic: Adopting a new idea should be based upon solid business logic that drives corresponding financial engineering and modeling.  New projects alway take longer and cost more than originally planned.  Be careful of high level, pie-in-the-sky projections.

9. Accountability: Any new ideas should contain accountability provisions. Every task should be assigned and managed according to a plan, and all of this should occur in the light of day.

10. Measurable: Any new ideas being adopted must lead to measurable objectives. Deliverables, benchmarks, deadlines, and success metrics must be incorporated into the plan.

11. Timing: It must be detailed and deliverable on a schedule. The initiative should have a beginning, middle and end.

12. Integrated: Ideas need to be incorporated into strategic initiatives and not constitute disparate systems. They should be incorporated into integrated solutions that eliminate redundancies, and build in tactical leverage points.

13. Evolving: Ideas should contain a road-map for versioning and evolution that is in alignment with other strategic initiatives and the overall corporate mission. No road map signals an incomplete idea and will also likely equal quick obsolescence.

14. Actionable: A successful idea cannot remain in a strategic planning state. It must be actionable through tactical implementation.

15. Champion: Senior leadership must champion any new idea being adopted. If someone at the C-suite level is against the new idea, it will likely die on the cutting-room floor.

The bottom line is that new ideas are beautiful things when they become solutions or lead to opportunities. Properly implemented, capitalizing on process driven creativity can keep business from stagnating and cause growth and evolution. Just follow the 15 rules above and avoid being the misguided change agent for solely for the sake of change. Thoughts?

Game Changers

By Mike Myatt, Chief Strategy Officer, N2growth

At one time or another all great leaders experience something that is so big, so impactful, that it literally changes the landscape. It’s what I call a “Game Changer.” A game changer is that ah-ha moment that creates an extreme, disruptive advantage or improvement. What’s interesting is that the best leaders proactively focus on looking for game changers. Sure, great leaders never lose sight of their core business, they pay attention to managing risk, etc., but they expend far more energy intentionally searching for opportunity, but not just any opportunity – a game changer. In the text that follows I’ll not only provide you with a blue print for finding game changers, but I’ll also ask you to share your experiences and insights as well. I hope this post is a game changer for you…

As most of you know, I spent last week at the World Business Forum in New York. I listened to esteemed business school professors, two Nobel laureates, bestselling authors, and some of the world’s most successful CEOs. These were all people who have personally experienced game changers, and some have experienced them many times over.

While there were clearly a few moments last week that I found instructionally valuable in terms of creating a game changer (Nando Parrado), there weren’t nearly enough of them. There was far too much rehashing of old ideas spun as new. A game changer doesn’t maintain the status quo, it shatters it. It was this taste of disappointment that led me to share my personal process for finding and implementing game changers – I call it SMARTS(C) (Simple-Meaningful-Actionable-Relational-Transformational-Scalable).

Simple – While not all game changers are simple, the best ones usually are.  In most cases simple can be translated as realistic, cost effective, quick to adopt, and fast to implement. Don’t get entangled in complexities, get heavily invested in simplicity. 

Meaningful – It must add significant value to your core business, and if it doesn’t add to the core business it better add even more value. Here’s the thing…most leaders get sucked down into the weeds and they spend too much of their valuable time majoring in the minors. If it’s not really meaningful, it’s not a game changer so why do it? Focus on value creation.

Actionable – It’s not a game changer if whatever “it” is never gets off the drawing board. If you cannot turn an idea into innovation, if you can’t put thought into practice, it’s not a game changer. By definition game changers happen, they exist, they have life. They don’t lurk in the shadow-lands of the ethereal and esoteric, they become reality.   

Relational –  I have found that game changers enhance, extend, and leverage existing relationships as well as serve to create new ones. When you get down to brass tacks, all business boils down to people (employees, customers, partners, investors, vendors, etc.), and people mean relationships. Real game changers understand the power of people and relationships, and they embody this in both their construction and implementation. If you forget the people, you cannot have a game changer.  

Transformational – I have yet to see a static game changer. By definition, a game changer causes change. If nothing changes, if nothing is created, if nothing is improved, if nothing is transformed, then you don’t have a game changer. A lesson that I learned long ago is that you simply cannot experience sustainable improvement without transformation.

Scalable – if it’s not scalable it’s not a game changer. An idea that offers no hope of a future will more often than not turn into a nightmare rather than fulfill a dream.  True game changers are built with velocity and sustainability in mind. The best thing about real games changers is that they build upon themselves to catalyze other accretive opportunities.

So there you have it, now that I’ve shared my thoughts on creating game changers, my SMARTS if you will, it’s your turn to share. Share an ah-ha moment, an experience, a process, but share…This post can be a game changer to many people if those who read it are willing to share their collective wisdom. Go…

Leadership & Change

By Mike Myatt, Chief Strategy Officer, N2growth

Leadership & Change
First the bad news
: If you’re not willing to embrace change you’re not ready to lead. Put simply, leadership is not a static endeavor. In fact, leadership demands fluidity, which requires the willingness to recognize the need for change, and finally the ability to lead change. Now the good news: As much as some people want to create complexity around the topic of leading change for personal gain, the reality is that creating, managing and leading change is really quite simple.  To prove my point, I’ll not only explain the entire change life-cycle in three short paragraphs, but I’ll do it in simple terms that anyone can understand. As a bonus I’ll also give you 10 items to assess in evaluating whether the change you’re considering is value added, or just change for the sake of change…

An Overview on the Importance of Change:
While there is little debate that the successful implementation of change can create an extreme competitive advantage, it is not well understood that the lack of doing so can send a company (or an individual’s career) into a death spiral. Companies that seek out and embrace change are healthy, growing, and dynamic organizations, while companies that fear change are stagnant entities on their way to a slow and painful death.

Agility, innovation, disruption, fluidity, decisiveness, commitment, and above all else a bias toward action will lead to the creation of change. It is the implementation of change which results in evolving, growing and thriving companies. Much has been written about the importance of change, but there is very little information in circulation about how to actually create it.

While most executives and entrepreneurs have come to accept the concept of change management as a legitimate business practice, and change leadership as a legitimate executive priority in theory, I have found very few organizations that have effectively integrated change as a core discipline and focus area in reality.  As promised, and without further ado, the change life-cycle in three easy steps:

1. Identifying the Need for Change: The need for change exists in every organization. Other than irrational change solely for the sake of change, every corporation must change to survive. If your entity doesn’t innovate and change in accordance with market driven needs and demands it will fail…it’s just that simple. The most complex area surrounding change is focusing your efforts in the right areas, for the right reasons, and at the right times. The ambiguity and risk can be taken out of the change agenda by simply focusing on three areas: 1) your current customers…what needs to change to better serve your customers? 2) potential customers…what needs to change to profitably create new customers? and; 3) your talent and resources…what changes need to occur to better leverage existing talent and resources?

2. Leading Change: You cannot effectively lead change without understanding the landscape of change. There are four typical responses to change: The Victim…those that view change as a personal attack on their persona, their role, their job, or their area of responsibility. They view everything at an atomic level based upon how they perceive change will directly and indirectly impact them. The Neutral Bystander…This group is neither for nor against change. They will not directly or vocally oppose change, nor will they proactively get behind change. The Neutral Bystander will just go with the flow not wanting to make any waves, and thus hoping to perpetually fly under the radar. The Critic…The Critic opposes any and all change. Keep in mind that not all critics are overt in their resistance. Many critics remain in stealth mode trying to derail change behind the scenes by using their influence on others. Whether overt or covert, you must identify critics of change early in the process if you hope to succeed. The Advocate…The Advocate not only embraces change, they will evangelize the change initiative. Like The Critics, it is important to identify The Advocates early in the process to not only build the power base for change, but to give momentum and enthusiasm to the change initiative. Once you’ve identified these change constituencies you must involve all of them, message properly to each of them, and don’t let up. With the proper messaging and involvement even adversaries can be converted into allies.

3. Managing Change: Managing change requires that key players have control over 4 critical elements: 1) Vision Alignment…those that understand and agree with your vision must be leveraged in the change process. Those that disagree must be converted or have their influence neutralized; 2) Responsibility…your change agents must have a sufficient level of responsibility to achieve the necessary results; 3) Accountability…your change agents must be accountable for reaching their objectives, and; 4) Authority…if the first three items are in place, yet your change agents have not been given the needed authority to get the job done the first three items won’t mean much…you must set your change agents up for success and not failure by giving them the proper tools, talent, resources, responsibility and authority necessary for finishing the race.

There you have it; the 3 pillars of change in three short paragraphs. Now that you understand change, here’s are the 10 points that need validating prior to launching a change initiative:

  1. Alignment and Buy-in: The change being considered should be in alignment with the overall values, vision and mission of the enterprise. Senior leadership must champion any new initiative. If someone at the C-suite level is against the new initiative it will likely die a slow and painful death.
  2. Advantage:  If the initiative doesn’t provide a unique competitive advantage it should at least bring you closer to an even playing field.
  3. Value Add: Any new project should preferably add value to existing initiatives, and if not, it should show a significant enough return on investment to justify the dilutive effect of not keeping the main thing the main thing.
  4. Due Diligence: Just because an idea sounds good doesn’t mean it is. You should endeavor to validate proof of concept based upon detailed, credible research. Do your homework – put the change initiative through a rigorous set of risk/reward and cost/benefit analyses. Forget this step and you won’t be able to find a rock big enough to hide under.
  5. Ease of Use:  Whether the new initiative is intended for your organization, vendors, suppliers, partners or customers it must be simple and easy. Usability drives adoptability, and therefore it pays to keep things simple. Don’t make the mistake of confusing complexity with sophistication.
  6. Identify the Risks: Nothing is without risk, and when you think something is without risk that is when you’re most likely to end-up in trouble. All initiatives should include detailed risk management provisions that contain sound contingency and exit planning.
  7. Measurement: Any change initiative should be based upon solid business logic that drives corresponding financial engineering and modeling. Be careful of high level, pie-in-the-sky projections. The change being adopted must be measurable. Deliverables, benchmarks, deadlines, and success metrics must be incorporated into the plan.
  8. The Project: Many companies treat change as some ethereal form of management hocus pocus that will occur by osmosis. A change initiative must be treated as a project. It must be detailed and deliverable on a schedule. The initiative should have a beginning, middle and end.
  9. Accountability: Any new initiative should contain accountability provisions. Every task should be assigned and managed according to a plan and in the light of day.
  10. Actionable: A successful initiative cannot remain in a strategic planning state. It must be actionable through focused tactical implementation. If the change initiative being contemplated is good enough to get through the other 9 steps, then it’s good enough to execute.

Has this been useful? Have I left anything out, or got anything wrong? Sound-off in the comments below…

The Innovation Song

By Mike Myatt, Chief Strategy Officer, N2growth 

The Innovation Song you ask? That’s right…The above video contains a song performed by a Stanford student which was submitted for his final project for a class entitled: “Innovation and Implementation in Complex Organizations.” The song was intended as a tribute to Gordon MacKenzie’s “Orbiting the Giant Hairball,” a book which puts forth some thoughts on how organizations can better address the issue of innovation. The video is superb, and nails the issues surrounding a lack of innovation better than many more detailed case studies which I have read over the years.  Many a CEO could benefit from downloading this song on their iPod. If this project didn’t get an “A” it should have…

Measuring Innovation

By Mike Myatt, Chief Strategy Officer, N2growth

Measuring InnovationMeasuring innovation is where the rubber meets the road. While it’s very easy to wax eloquent about innovation, I’ve found that for most companies, measuring innovation is quite a tall order. Moreover, even for those organizations that do measure innovation, are they measuring the right metrics, for the right reasons? I’ve authored many posts on the topic of innovation, and have lectured often on the necessity for executives to completely embrace innovation as a core focus area. The power of innovation to totally transform a mediocre business into a category dominant company is really only deniable by the ignorant or the prejudiced. However even those businesses that embrace the concept in theoretical fashion can fail to implement productive innovation management programs if they do not understand how to measure its impact. In today’s post I’ll address how to measure innovation…

So, how do you tell if an innovation initiative is successful? According to Scott Anthony at Harvard Business Online, perceptions of inital successes or failures are often times misleading when it comes to whether innovation will be successful on a sustainable basis. To validate his assertion, Scott presents a simple case-study of two innovation initiatives and asks which one would you deem as being the most successful:

  • Innovation A: This initiative enjoyed huge first-year revenues of $200 million thanks to “a clear value proposition, clever positioning, and a strong distribution network.”
  • Innovation B:  This initiative offered what was at best an ambiguous business model and generated only $220,000 during its first year.

So which initiative was more successful? “It’s obvious, right?” he says. “Innovation A is the winning proposition.” Not so fast…Is revenue the only things that matters? Just because something is easy to measure, and appears to be an obvious win, in and of itself this doesn’t necessarily constitute a victory. Were the right things done? Were the right metrics measured? Let’s see…

  • Innovation A was Vanilla Coke. “It was a line extension that largely cannibalized sales of Coke’s other products,” says Anthony, with the note that Coca-Cola unceremoniously discontinued the flavor only three years later.
  • Innovation B was Google. Enough said…

The Take Away: “Before making a decision about an innovation,” notes Anthony, “make sure you know what type of idea you are evaluating. Then make sure you use the right metrics for meauring the success of that idea.”

There is great truth in the old axiom “you can’t manage what you can’t measure” and perhaps nowhere is it more applicable than as applied to the practice of innovation. Let me be clear…measuring innovation is not difficult at all if you understand it. The problem lies with the uneducated managers and executives who view innovation as a vague, ambiguous, and undisciplined area that sucks time, resources, and investment without demonstrable return. While the aforementioned sentiments couldn’t be further from the truth, they nonetheless represent the opinion of many uniformed people in a position of authority. They simply don’t know what they don’t know…

There are three CIOs in the corporate world, the Chief Information Officer, Chief Investment Officer, and the Chief Innovation Officer…of the three I believe the one position that a company cannot due without is the Chief Innovation Officer. As with any other important discipline, your enterprise needs to place someone in charge of innovation. Without a dedicated innovation champion it is likely that your initiatives will die a slow and painful death. Furthermore your CIO needs to be set up for success and not failure. This means that he or she must have total buy-in from executive leadership that innovation is a corporate mandate and not a corporate albatross.

Let me attempt to simplify what many strive to make complex…Innovation is simply a philosophical mindset that is used as a catalyst to accelerate growth and efficiency. It is a business driver and nothing more. However the reason innovation is one of the most powerful business drivers is simply because it is a disruptive, high velocity, and high return discipline that can create a much greater impact than other drivers. 

The truth of the matter is measuring innovation is as simple as aligning your innovation initiatives with your business objectives. While innovation can be measured in many different ways, the following bullet points will give you examples to use when framing your metrics and analytics:

  • What to Measure: Focus on measuring the things innovation is designed to impact: process, growth, differentiation, and profitability.
  • Innovation as a Percentage: Measure the trends…Look at the sales growth or contribution margin caused by products or services launched within the near term (i.e. past three years) as a percentage of the overall line item. The greater the influence of innovation as a growing percentage of the whole category being measured, the more healthy, vibrant and sustainable your enterprise is…
  • Track Efficiency Gains: Measure speed to market, milestone hit rates, benchmark productivity, and other metrics designed to measure innovation’s impact on process and efficiency.
  • Track Competitive Separation: Measure how innovation is impacting win/loss ratios, changes in market share, increases in brand equity, competitive differentiation and other competitive metrics tied to innovation initiatives.

The bottom line is that most of the current market data indicates that companies that embrace innovation as a key business driver are the fastest growing and most profitable companies in the market. Businesses that use innovation to create, disrupt and disintermediate will attract the best talent, have higher brand loyalty, and have the best chance at long-term sustainability. Don’t hesitate…innovate!