Tuesday, January 8, 2013
Innovate by Looking for Problem Patterns
Posted on 4:40 PM by Unknown
Is The End Drawing Near for Sears?
Posted on 7:35 AM by Unknown
The Wall Street Journal reports today that Edward Lampert, whose hedge fund ESL Investments Inc. controls over 50% of Sears' shares, will be taking over as the CEO of the company. Lampert merged Sears and K-Mart several years ago, and he has been Chairman of the company since that time. He succeeds a former IBM executive who ran the company for the past two years. Before that, Sears had an interim CEO for three years. Hmmm... That's a pretty long period of instability at the top, and now we will be continuing with a person at the helm who lacks retail industry experience. Can Lampert turn this ship around, or is it too late?
Same-store sales have decreased for six straight years. Sear lost $441 million through the end of the third quarter, and it expects to lose roughly $300 million in this quarter. Concerns have been raised about liquidity at Sears. The firm is clearly in rough shape.
What should they do now? I think Sears really has to think long and hard about what assets it has that are truly valuable and distinctive. It's future must rest on building around those assets. What is valuable and distinctive? Craftsman and Kenmore appear to fit the bill. Perhaps Lands End does as well. After that, it's not clear that the firm has a future. So, if I were thinking about the future strategy, I would be thinking about those three brands, rather than trying to preserve the entire traditional department store business. Maybe the future is in small stores and/or an online retail presence that just sell Craftsman, Kenmore, and related brands, with Lands End sold off to another clothing catalog retailer. For certain, the future does not seem to bright for the traditional brick-and-mortar business that they have been trying to preserve for years, amidst a clear and tragic decline.
Same-store sales have decreased for six straight years. Sear lost $441 million through the end of the third quarter, and it expects to lose roughly $300 million in this quarter. Concerns have been raised about liquidity at Sears. The firm is clearly in rough shape.
What should they do now? I think Sears really has to think long and hard about what assets it has that are truly valuable and distinctive. It's future must rest on building around those assets. What is valuable and distinctive? Craftsman and Kenmore appear to fit the bill. Perhaps Lands End does as well. After that, it's not clear that the firm has a future. So, if I were thinking about the future strategy, I would be thinking about those three brands, rather than trying to preserve the entire traditional department store business. Maybe the future is in small stores and/or an online retail presence that just sell Craftsman, Kenmore, and related brands, with Lands End sold off to another clothing catalog retailer. For certain, the future does not seem to bright for the traditional brick-and-mortar business that they have been trying to preserve for years, amidst a clear and tragic decline.
Monday, January 7, 2013
David Kelley on 60 Minutes
Posted on 8:52 AM by Unknown
60 Minutes ran a terrific and emotional feature last night on David Kelley, founder of design firm IDEO.
Friday, January 4, 2013
Asking Better Questions
Posted on 3:47 AM by Unknown
Shane Snow wrote a good column recently on the importance of asking good questions. He argues that asking good questions serves as a crucial leadership capability that people should develop. Snow makes some good recommendations, such as trying to not ask leading questions, reframing questions later in a conversation when you haven't received a complete response, and replaying what you have heard to insure that you have a solid understanding.
I would make a few additional points. A good leader also asks questions that explore a topic a bit deeper, even when they appear to have a consensus in a meeting. A good leader uses those questions to accomplish two things: 1. Test what-if scenarios, and 2. Test for understanding and alignment. With regard to the first point, leaders want to make sure that they uncover any hidden risks. They might ask: "What if some of our assumptions prove to be untrue?" "What if our competitor responds in an unexpected way?" With regard to the second point, a leader needs to make sure that a team is truly on the same page, and that everyone shares a solid understanding of a decision rationale, as well as each person's role and responsibilities during implementation. Asking good questions can help reveal whether people are truly on the same page before moving forward with execution of a plan of action.
I would make a few additional points. A good leader also asks questions that explore a topic a bit deeper, even when they appear to have a consensus in a meeting. A good leader uses those questions to accomplish two things: 1. Test what-if scenarios, and 2. Test for understanding and alignment. With regard to the first point, leaders want to make sure that they uncover any hidden risks. They might ask: "What if some of our assumptions prove to be untrue?" "What if our competitor responds in an unexpected way?" With regard to the second point, a leader needs to make sure that a team is truly on the same page, and that everyone shares a solid understanding of a decision rationale, as well as each person's role and responsibilities during implementation. Asking good questions can help reveal whether people are truly on the same page before moving forward with execution of a plan of action.
Thursday, January 3, 2013
Being Clear vs. Being Right
Posted on 4:32 PM by Unknown
Fast Company's Jessen O'Brien recently interviewed Ping Fu, the cofounder and CEO of 3-D software company Geomagic. Ping Fu just wrote a new book titled Bend, Not Break: A Life in Two Worlds. Fu's story is quite remarkable. She grew up during the Cultural Revolution in China. She suffered brutal treatment at the hands of Mao's regime. Fu survived those tortuous years and came to the United States to become Inc. magazine's Entrepreneur of the Year in 2005. In this interview, she offers some leadership advice that I found to be quite thought-provoking:
I found in my career that it is better to be clear than to be right. A lot of times, I find leaders want to be right and they think being right is what gains respect. I find being clear is what gains respect--if you’re clearly wrong, people can correct you, and if you’re clearly right, people can follow you.
Here's why I think she makes a great point. If someone isn't making a clear point, here is what you should be asking yourself: Do they really have a sound strategy, vision, plan? Lack of clarity may be a simple problem of articulation and communication. However, in many cases, a lack of clarity speaks to much deeper problems. An inability to articulate a plan or strategy clearly means that someone actually has a muddled vision. They haven't thought it through with the type of precision required to perform at a very high level. In many cases, it means that they are trying to do too many things at once, or they are pursuing inconsistent objectives.
I found in my career that it is better to be clear than to be right. A lot of times, I find leaders want to be right and they think being right is what gains respect. I find being clear is what gains respect--if you’re clearly wrong, people can correct you, and if you’re clearly right, people can follow you.
Here's why I think she makes a great point. If someone isn't making a clear point, here is what you should be asking yourself: Do they really have a sound strategy, vision, plan? Lack of clarity may be a simple problem of articulation and communication. However, in many cases, a lack of clarity speaks to much deeper problems. An inability to articulate a plan or strategy clearly means that someone actually has a muddled vision. They haven't thought it through with the type of precision required to perform at a very high level. In many cases, it means that they are trying to do too many things at once, or they are pursuing inconsistent objectives.
Wednesday, January 2, 2013
Should You Purposefully Annoy Your Employees?
Posted on 5:45 AM by Unknown
Ray Fisman and Tim Sullivan offer an interesting anecdote in today's "How To Be A Better Boss" article in the Wall Street Journal. Fisman and Sullivan write:
Employees often wish managers were a little more understanding, but people tend to associate the idea of "understanding" with "nice." A little well-directed pain can be a good thing in getting workers to focus on the tasks they might otherwise choose to forget, and to increase overall productivity. Given that developers often prefer programs to people, Kayak founder Paul English says, making them deal directly with customers' questions drove them nuts. Once they heard the same complaint two or three times, the engineers tended to stop and fix the code. As an added bonus, after taking his turn on customer-service duty, an engineer can pass the phone—along with its grating ring—down the line for someone else to deal with.
What an interesting example! Of course, the phone calls work for reasons beyond the fact that they annoy the software developers. The phone calls create a direct line of communication between the developers and the users. Kayak has removed all the information filtering that often takes place between the users in the marketplace and the developers back at the office. Moreover, developers get a real sense of what is just a one-off complaint versus a real pattern. Too often, someone can shrug off a complaint from the sales force as an "isolated incident." However, in this case, the developers can begin to see that a pattern exists, and that the incident is far from isolated. Finally, the developers share the pain here. We don't have a few "problem-solvers" focused on fixing bugs. We have all the developers addressing bugs. Everyone is accountable, as opposed to having a small unit that worries about fixing bugs. The collective accountability goes a long way toward improving quality. Once everyone knows that they will have to address these calls at some point, it also makes people take extra care to get it right the first time.
Employees often wish managers were a little more understanding, but people tend to associate the idea of "understanding" with "nice." A little well-directed pain can be a good thing in getting workers to focus on the tasks they might otherwise choose to forget, and to increase overall productivity. Given that developers often prefer programs to people, Kayak founder Paul English says, making them deal directly with customers' questions drove them nuts. Once they heard the same complaint two or three times, the engineers tended to stop and fix the code. As an added bonus, after taking his turn on customer-service duty, an engineer can pass the phone—along with its grating ring—down the line for someone else to deal with.
What an interesting example! Of course, the phone calls work for reasons beyond the fact that they annoy the software developers. The phone calls create a direct line of communication between the developers and the users. Kayak has removed all the information filtering that often takes place between the users in the marketplace and the developers back at the office. Moreover, developers get a real sense of what is just a one-off complaint versus a real pattern. Too often, someone can shrug off a complaint from the sales force as an "isolated incident." However, in this case, the developers can begin to see that a pattern exists, and that the incident is far from isolated. Finally, the developers share the pain here. We don't have a few "problem-solvers" focused on fixing bugs. We have all the developers addressing bugs. Everyone is accountable, as opposed to having a small unit that worries about fixing bugs. The collective accountability goes a long way toward improving quality. Once everyone knows that they will have to address these calls at some point, it also makes people take extra care to get it right the first time.
Tuesday, January 1, 2013
Pivot: The Road to Ruin for Many Startups
Posted on 7:39 AM by Unknown
The word "pivot" has become part of the entrepreneurial lexicon over the past few years. Eric Ries developed the "Lean Startup" methodology for building and launching new products. Ries argues that entrepreneurs should work toward the development of an MVP - minimum viable product - and then listen carefully to customer feedback so that the next iteration of improvements can be put in place. Entrepreneurs should use the minimum viable product as part of a process of disciplined experimentation, whereby they test core hypotheses about their business model. As entrepreneurs gather feedback, they should pivot based on what they are learning. According to Ries, a pivot is a "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."
In a blog post for the Wall Street Journal, serial entrepreneur and Stanford Professor Steve Blank offers some cautionary words about the "pivot" concept though. Blank gives an example of a founder who would rush back to his startup's offices after every customer visit and initiate a fire drill of sorts. The founder would constantly be advocating changes based on his most recent interaction with a customer. Blank explains the problem:
Pivot as an Excuse
I wasn’t surprised when he pushed back: “I’m just getting out of the building and listening to customers. All I’m doing is pivoting based on their feedback.” By now I’ve heard this more times than I liked. “Yuri, one of the things that make you a great founder is that you have insight others don’t. But like all great founders, some of these insights are simply hallucinations. The problem is you and other founders want immediate action every time you have a new idea. That’s a mistake.
“A pivot is a substantive change to one or more of components to your business model.” You’re using “Pivot” as an excuse to skip the hard stuff – keeping focused on your initial vision and business model and integrating what you’ve heard if and only if you think it’s a substantive improvement to your current business model. There is no possible way you can garner enough information to pivot based on one customer’s feedback or even 20. You need to make sure it’s a better direction than the one you are already heading in.”
In a blog post for the Wall Street Journal, serial entrepreneur and Stanford Professor Steve Blank offers some cautionary words about the "pivot" concept though. Blank gives an example of a founder who would rush back to his startup's offices after every customer visit and initiate a fire drill of sorts. The founder would constantly be advocating changes based on his most recent interaction with a customer. Blank explains the problem:
Pivot as an Excuse
I wasn’t surprised when he pushed back: “I’m just getting out of the building and listening to customers. All I’m doing is pivoting based on their feedback.” By now I’ve heard this more times than I liked. “Yuri, one of the things that make you a great founder is that you have insight others don’t. But like all great founders, some of these insights are simply hallucinations. The problem is you and other founders want immediate action every time you have a new idea. That’s a mistake.
“A pivot is a substantive change to one or more of components to your business model.” You’re using “Pivot” as an excuse to skip the hard stuff – keeping focused on your initial vision and business model and integrating what you’ve heard if and only if you think it’s a substantive improvement to your current business model. There is no possible way you can garner enough information to pivot based on one customer’s feedback or even 20. You need to make sure it’s a better direction than the one you are already heading in.”
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