The fundamental challenge of modern business is finding that right balance between tactics and strategy, between execution and innovation, between management and entrepreneurship.
Typically, as companies grow and age, they naturally become more tactical, more execution - focused.
In contrast, the “tabula rasa” of startups has traditionally been the best milieu for out-of-the-box strategy and innovation to thrive.
Now in the old days, businesses could do ok by being very good at just one of these.
Big businesses could sustain profitable franchises for years by leveraging their resource advantages to keep smaller competitors out and margins high.
As for startups, it was easy to stay in the “idea bubble.”
Investors were more patient and it often just wasn’t that obvious if your team and technology had the right stuff. You had time on your side.
But no longer - businesses must now be either good at both or they perish.
This is extremely stressful for most entrepreneurs and business owners, and especially for investors working to determine which of them to back.
Luckily, there is an easy shorthand to separate the superstar company wheat from the chaff.
It is the simple idea that super business PEOPLE must be all of these things too.
And superstar companies are really just ones where lots and lots of superstar people work.
So, find the superstar people, and the money will follow.
In his excellent book “The Global Achievement Gap,” author Tony Wagner flags seven crucial “superstar” skills to look for:
1. Critical thinking and problem solving
2. Collaboration across networks and leading by influence
3. Agility and adaptability
4. Initiative and entrepreneurship
5. Effective oral and written communication
6. Accessing and analyzing information
7. Curiosity and imagination
To this, let me add one more: Ambition.
Now I am not talking about the garden variety get good grades, go to a nice college, start a small business, complain about taxes and regulation and how hard it all is type ambition.
In this multi-billion person, highly educated, hard-working world of ours, that just doesn’t cut it.
No, the ambition I am talking about is one that burns so deep and hot that it is deeply dysfunctional.
An ambition that usually translates for sure into an insane, other-worldly work ethic, but one that goes beyond that.
It is an ambition that is channeled daily into ongoing personal and professional improvement and learning.
An ambition that leads to goals beyond the realistically possible.
Like Steve Jobs leading Apple into the music business, or Richard Branson Virgin into airlines, or Tony Hsieh with Zappos putting his life and considerable fortune on the line, for of all things, to sell shoes online.
This kind of ambition is the unifying force. It demands that everything be done right – strategy, tactics, innovation, execution, entrepreneurship, management.
Find this kind of ambition – channeled to ethical, capitalistic ends – and back it.
And you and the world will be better for it.
Effective executives avoid false choices, decisions where only limited, and variously unattractive, alternatives are considered.
Instead, when confronted with a false choice, the best executives reframe decisions into empowering, real choices like in the examples below:
False Choice Example #1: Data - based versus “Gut” - based decision making.
New school “Moneyball” executives say opinions and experience just don’t matter - that there is always more truth and wisdom in the numbers than in executive “intuition.”
“Old School” executives pooh-pooh this stuff and instead channel Henry Ford who famously said, “If I had asked people what they wanted, they would have said faster horses.”
The Real Choice: Data informs, but does not determine, key business decisions.
Time and effort is taken to collect and analyze key business data and metrics, but executives also draw upon their educations, their life and professional experiences, and the counsel of trusted advisors for the full and nuanced view.
And then, from a place of leadership and authority, decide.
False Choice Example #2: A flexible and virtual work culture or a “cheeks in seats” high accountability one.
Most modern professionals, especially younger ones, value and crave mobility and schedule flexibility.
The best companies desire access to global talent, especially from lower cost geographies and on flexible, pay as you go terms.
Yet with too much of a workforce too often toiling in their pajamas from their home offices, can the energy and day-to-day nitty-gritty management necessary for high accountability and performance be sustained?
Yes and no. Yes, it is far easier to manage and motivate human beings the way it has been done since time immemorial, through ongoing, in-person interaction but....
...this high value must be weighed against the unique costs and sometimes competitive disadvantages of doing so - the costs of office space, of commuting time and energy, and of geographically limiting access to talent, etc.
The Real Choice: Instead of evaluating the choice through the typical in-person versus virtual divide, instead let’s do so through the prism of great management by crystal-clear objectives versus the fuzzier, “attaboy” approach. This means quantitatively and explicitly defining:
False Choice #3: The work we want to do, as an organization, versus the work to pay the bills, we feel we need to do.
When leading strategic planning sessions, time and again I hear executives bemoan and belittle the clients they have now and how wonderful everything would be “if only” they could attract bigger organizations with bigger budgets that would hire them on a recurring revenue basis.
So the false choice becomes whether or not to ditch one’s current clients and instead rebrand/reposition/refocus marketing and sales efforts to attract and secure those beloved “A Listers.”
The Real Choice: Just cherish and and serve our current clients, even when are not of the size or of the strategic nature that we truly desire, by recognizing:
False Choice #4: Between, as an organization, doing social “good” and doing well - i.e. making a lot of money (of the timely genre of how tiresome it is to listen to politicians of all stripes blame businesses for the problems of our world?).
The Real Choice. 99.9% of the time, successful businesses, via offering great products and services that people want and are willing to pay for, enable a virtuous circle of positivity that makes our modern world possible. Through these successful businesses:
Yes, as entrepreneurs and executives seeking to be great, beware these false choices.
With just a little lateral thinking and planning the far better, and real choice, is there for the making.
Why do the vast majority of businesses get “stuck” - doing well enough to "stay alive" but not even close to being either a) a source of significant cash flow for their owners or b) an attractive acquisition candidate for a strategic or financial buyer?
Stuck companies face a daunting array of vexing challenges, almost all of which fall into one of these four "M" buckets - Money, Management, Model, and Marketplace.
Money. Most smaller and mid-sized businesses fight an ongoing, Sisyphean battle with money - pushing the cash flow boulder up the hill month after month, only to see payrolls, rents, materials, insurance and marketing & sales expenses drag bank balances down again and again.
However, losing at the money game is almost always a symptom of deeper problems than a cause in itself.
So when money problems arise, usually the best thing is to not focus on them but rather to confront their root causes, which almost always can be found in one of the remaining 3 “M’s” below.
Management. As described in my The Living Company post, in the end, a business is simply a “Collection of Humans” temporarily united toward a common cause.
As such, the “productive vitality” of the relationships between these humans is the most important indicator of its ultimate success, and can be well measured by answers to the questions below:
1. Would / do the people in the company recommend it as a great place to work?
2. Would / do true leaders view it as a place where they can build their careers / make their mark?
3. Does a productive camaraderie exist in the organization such that that those within it do more and better work than without?
If the answer to any of these questions is no, then a hard and sober look at the company's management and leadership is required (And, in all likelihood, the problem starts and ends right at the top).
Model (Business). I had the great fortune a few years ago to lead a change management assignment for a large, urban hospital here in Los Angeles where Mr. Charlie Munger - Warren Buffet's famed partner at Berkshire Hathaway - was Executive Chairman.
Mr. Munger's philosophy and credos were well steeped in the organization, of them my favorite was that for Mr. Munger all businesses – no matter the size, industry, or focus – could be evaluated as to their answer to one question, namely:
"Does the business consistently deliver high quality at low cost no matter the field of endeavor?"
Honestly measuring how one’s company ranks on this cost / quality spectrum relative to competition is a great predictor as to its long term success.
Marketplace. Following on Mr. Munger's wisdoms, try on one of Warren Buffet's most famous quotes:
“When an industry with a reputation for difficult economics meets a manager with a reputation for excellence, it is usually the industry that keeps its reputation intact."
Now, when it comes to industry and market analysis, most small and medium-sized companies undertake it anecdotally, if at all.
An investment of time and resources which almost universally yields a high ROI is to have an outside research firm undertake for the business a formal industry, competitive, market, and customer analysis.
It is almost impossible to pay too much for such work, as helping managers gain stronger focus as to what their right market positioning is (and what it is not!) is worth its weight in something far more precious than gold, opportunity cost.
Money. Management. Model. Marketplace.
Successful businesses get the last three right and the first naturally follows.
And, as they do, companies get “unstuck” and recapture the promise and excitement of the business' earliest days, but now with the cash flows and equity value that makes all of the hard work worthwhile.
Risk is good. Not properly managing your risk is a dangerous leap.
- Evel Knievel
"The Strategy Paradox," Michael Raynor's classic book, should be required reading for executives interested in understanding the connection between risk and return in strategic planning and decision-making.
Raynor’s basic premise is that almost everyone, because of how human beings are fundamentally wired, over-rate the consequences of “things going bad” and consequently too often default to seemingly safe strategies.
Raynor goes on to make the point that while this may be fine from a personal health and safety perspective, it is quite sub-optimal when it comes to strategic decision-making.
The reasons, he cites, are both subtle and obvious.
The obvious reasons revolve around classic “agency” challenges - namely that there are a different set of incentives in place for owners versus operators of businesses.
The owners - i.e. the shareholders - main goal is investment return. As such, they usually evaluate strategic decisions through the dispassionate prism of expected value.
The operators of businesses, in contrast, usually act as who they are - emotional, empathetic, and personal-safety focused human beings.
And while, as professionally trained managers, they are of course aware and focused on expected value and shareholder return, their analysis of those rational probabilities often get overshadowed by more "human" concerns.
Like friendship. Like the stable, comfortable routine of a job. Of co-workers. Of a daily, comfortable work rhythm.
And the result of this natural human bias toward "the comfortable" is executive decision-making that defaults too often to the seemingly (that word again) conservative option.
Now as for why this conservatism is a strategic problem, Raynor delves into the concept of survivor bias and how it pertains to traditional studies of what factors separate successful companies from the unsuccessful ones.
Survivor bias can be best illustrated by all of those statistics that too many of us unfortunately know by heart regarding the abysmally low percentage of companies that make it through their 1st year of business, those that make it to 5 years, to 10 years, etc.
Now most of us naturally interpret these statistics as to mean that the leaders of these failed businesses were too aggressive, that they took too many risks, made too many big bets that didn’t pan out.
But Raynor's research actually demonstrates the opposite.
As opposed to Jim Collins’ famous (and famously flawed) Good to Great analysis, Raynor found that when the full universe of companies were surveyed – not just those that survived – that there was a direct negative correlation between those that didn't make it and the relative conservatism of their leaders and their pursued business strategies.
Or from the other perspective, the successful businesses were led and managed far more so by leaders who could be described in those "seemingly"pejorative terms - "aggressive," "risk taker," "bet the house" types.
So what does this all mean for the executive / entrepreneur interested in making quality higher risk / higher return strategic decisions?
Well, to quote the title of a famous self-help book: "Feel the Fear…but Do It Anyway."
Accept that as human beings, we are wired to be afraid.
BUT to prosper in modern business we must push through this and trust that the riskier choice far more often than not is...
...the strategically correct one.
Over the past few weeks, I have talked about the demonstrable, high ROI of strategic planning for companies of all types and sizes, along with suggested processes and tactics to complete that plan on time and under budget.
As important as the creation of the plan is its ongoing review and updating. Both in comparison to actual results and then the corresponding “Gap Analysis” to evaluate what went right and should be done more, and what went wrong and needs adjustment, discontinuation, etc.
One of the best ways to recalibrate like this is through the establishment and regular meeting of a Board of Strategic Advisors.
For smaller, entrepreneurial companies, a strategic advisory board can perform many of the functions that a fiduciary board does, but for far less cost, headache, and without the emotionally and financially complex decision around loss of owner control.
For companies like this, here are a few ideas on how to set up and earn ROI right away on a strategic advisory board:
Accept the Truism that Often It is Better to Receive than to Give: While advisory board members, unlike with formal boards, do not have liability nor fiduciary responsibility, their time and energy requirements to participate are significant.
And for most smaller companies, the financial incentives it can offer advisory board members are relatively little compared to the value of board members’ time.
A good if imperfect analogy is that for many senior executives their involvement with a smaller company advisory board is almost a philanthropic endeavor, where they give of themselves without expectation of direct reward, financial or otherwise.
Correspondingly, the owners and managers of the small company must approach the sage advice and good energy offered by their advisory board fully in “receiving” mode.
For businesspeople of the mindset of always trading value for value and reciprocal obligation, this is hard. But only by clearing this space can an advisory board’s counsel be best received.
And somewhat counter-intuitively, often only by management fully accepting the “gifts” of its advisors will the board member’s experience be richest.
Begin with the End in Mind: For companies beyond the startup phase, its operating executives are naturally pulled to the shorter-term challenges and realities: this quarter’s revenue and profits, this month’s sales, the challenges and angst of a difficult employee decision, etc.
An advisory board discussion, however, by both its nature and by the kinds of folks attracted to serve on them, naturally pulls to the longer view - to the big "why" and "which" questions that all businesses should be regularly asking themselves always but rarely do.
The why questions are hopefully embodied in the Company’s mission and its values, and need the regular attention of strategic planning sessions like advisory board meetings to keep them from existing only in “hot air.”
The “which” questions are in many ways the harder ones that an advisory board dynamic can specifically help address.
This is because ambitious entrepreneurs and executives, especially after they have a little success, are naturally drawn to expanding their sense of their market opportunity, and correspondingly their list of product and service offerings.
This naturally leads to a diffusion of focus, of trying to be all things to all people. A thoughtful advisory board will challenge management to clearly define where they are aiming to be 1 year, 3 years hence and beyond, and from this vision where resources and attention should be focused today.
Speak Little, Listen Much: Managers and owners of emerging companies are often also the lead salespeople, the lead “evangelists” for their companies.
As a result, their default mode is to always be selling, always be pied-pipering their incredibly bright futures.
This is natural and good, but when strategic planning in board settings it is of equal importance that the challenges, the obstacles, the concerning risk factors be discussed and grappled with long and hard.
Even if, especially if, so doing is buzz-killing and / or depressing.
Why? Because it is often only in the “low negative” energy state that a certain kind of reflective creativity can flourish, and completely new approaches to solving vexing problems can be discovered.
Brevity is Next to Godliness: Strategic planning sessions in a modern business context should be tightly scheduled to last not more than 3 hours. After this length of time, diminishing returns starts setting in fast.
A tight frame also requires all participants to come to the meeting prepared. And, in turn, that the meeting organizers select the right meeting homework and then plan and moderate the agenda with the proper balance of structure and free-flowing dialogue.
Doing all of the above requires work – a good guide is that for every hour of strategic meeting time there should be 5 hours of planning time by the meeting organizer and at least 2 hours of preparation time by each participant.
Given that the only way to increase the value of a business is to either a) increase its bottom line financials and/or b) to improve its strategic positioning and growth probability, a structured approach involving first the development of a formal plan and then...
...staying committed to its ongoing “review and resetting” as is done in a well-moderated advisory board setting should be a FIRST priority of any responsible manager of a company with ambition.
These are classic “non-urgent, extremely important” business building activities to be ignored at one's peril, and benefited from in ways well beyond reasonable expectation.
The research is conclusive:
...McKinsey found that only 23% of companies regularly draft and update their strategic plan that 86% of executive teams spend less than an hour a month discussing strategy.
So what gives? Why does the research show how good strategic planning is for virtually any business, yet so few businesses regularly do it and even fewer do it well?
Well, Accenture asked this question and found that 80% of executives just flat out disliked their company’s planning processes.
My 17+ years of experience of leading and moderating strategic planning processes for companies of all types is similar: no one argues that strategic planning is a high ROI use of time and energy, but in most companies far more often than not planning processes are undertaken either informally, infrequently, under duress, or not at all.
And perhaps even more frustratingly, when strategic plans are started as often as not they are never finished, with a combination of planning “fatigue” and “de-prioritization” to other more “pressing” business matters being the usual culprits of abandonment.
This is sad, but with just a little “re-framing” of our planning mindset and approach we can gain the rich business benefits of strategic planning as described above, be confident that our planning process will be done right, and...
...done in such a way that when completed the process naturally and elegantly transitions to the agreed-to projects, tasks, and to-dos.
How we can do all this? It is really quite simple: Outsource It!
Just as most businesses don’t do their own taxes, or defend themselves when sued, or host their own websites, or write their own accounting software, or run their own payrolls, or self-insure, we are long past the point where executives should be expected to be experts on a process as complex and nuanced as strategic planning, especially as it is the kind of skill that is best learned by doing.
And doing a lot of it.
Now, for some very large companies like General Electric and Proctor and Gamble (both famed for the quality of their strategic planning), this is not a problem.
Firms like these have large and well-trained teams that do nothing but strategically plan all day.
This is obviously not the reality for most small and mid-sized firms, where executives are tasked with it all - strategy, tactics, execution, HR, sales, marketing, operations, and more.
These executives just don't have the time to learn how to strategically plan the right way and then maintain the stamina in the midst of all their competing responsibilities to finish a planning process in a reasonable amount of time without burning themselves and everyone else out while so doing.
Now let me be clear: Outsourcing a company’s strategic planning process does not mean outsourcing the responsibility for the completion of the projects, tasks, and to-dos that will properly and inevitably arise from it.
Such responsibilities of course remain those of the operating executives.
But this is far different from attempting to undertake a planning process completely on one’s own.
Just like the best Olympic athletes have coaches to help them attain peak performance, so do the best-performing executives and companies have high quality, outsourced providers to help them beat the competition and win at at all aspects of their their businesses.
And strategic planning, when you cut through all of the noise, is just another business process.
When we see it like this, and not as something magical or obtuse, then almost always the right decision is to reach out and get some outside help to do it right.
The past is never dead. It's not even past.
- by William Faulkner
A vexing challenge in attaining a business breakthrough of any type - sales, profitability, business model, company culture - is the inexorable "backward" pull of a business' historical results and accomplishments (or lack thereof).
For sure, as effective executives, we know to focus on opportunities not problems and that past performance, good or bad, is neither indicative nor predictive of future results, yet...
...whether we like it or not we are reminded always of what has gone before, with the “unsaid” being that no matter how hard we try, the future of our business will be more or less like its past, with the best we can realistically hope for is just a few percentage points of growth here and there.
This frustrating reality is caused, to a very large degree, by the day-to-day operational “inertia” of most businesses, big and small.
It is the inertia that develops when the same people interact with each other in the same way - managing meetings, running projects, and assigning to-dos in that default and “comfortable” way.
Over time, individual executives start bringing to these repetitive business interactions increasingly hardened perspectives.
And then this inertia turns to a creeping lethargy that stops a business in its tracks, especially when opportunities that require proactive action to pursue present themselves.
Now I hope that just by describing the problem sheds light on how to solve it: Consciously and constantly injecting into a business new, different, and extraordinary stimuli.
The stimuli of Organizational Change - bringing new people in and encouraging under performers to depart.
The stimuli of Branding Change - ditching the old logo, tagline and website and starting over new and fresh.
The stimuli of Financial Change - seeking and securing investment capital to grow faster and more strategically.
Heck, just contemplating new stimuli like these can be a breath of badly needed fresh air - forcing executives to visualize and imagine what their desired business of the future should and can be...
...and then working back to the present time to define what needs to be done to get it there.
Yes, when it comes to breaking the shackles of the past, the default strategic stance should be that new and different is always better until and unless proven otherwise.
I wouldn't worry too much about whether this approach will lead to poorly considered risk-taking.
Because whether we like it or not, our businesses’ pasts are always with us.
But by taking conscious, definitive, and different action - repeatedly and determinedly - we can easily break free of it.
I recently moderated a strategic planning session for a Texas-based developer and distributor of specialty software for the financial services industry.
For them, on the one hand it was truly the best of times: an 8 - figure revenue base and possessing of a recurring revenue business model with long term clients including some of the biggest banks and brokerage firms in the world.
But...and like many companies now in our technology fast forwarded world, serious storm clouds threatened: minimal revenue growth and more disturbingly pricing (and margins) driven down by aggressive overseas competition.
As concerning, the Company’s Founder - rightly revered for his work ethic and charismatic leadership - was uncharacteristically indecisive, waxing on a bit too nostalgically on how “easy” business was in the “old days” versus addressing today’s challenges.
So we got “stuck,” so that even in the areas where there was agreement as to the strategic and tactical changes needing to be made, the executive team just couldn’t make them (and then have those decisions stay made!).
Now, as I have found from my 15+ years of leading strategic sessions like this, at some point as often as not they turn into Interventions, defined by Webster as “becoming involved intentionally in a difficult situation in order to change it or improve it, or prevent it from getting worse.”
And, in the context of a company refining its strategic plan, the intervention (at a top level) normally involves leading the executive team through a series of “Why,” “What,” “Who” questions.
First, there are the “why” questions to re-ground us in the business’ “reason for being” and the fundamental values it brings to its stakeholders - shareholders, customers, employees, etc.
Questions like “Why do customers choose us?” and more poignantly for the team “Why do we work here?" and "Why is it important to us as individuals that this company be successful?”
As these “whys” are grappled with, strategic clarity usually emerges and the questions turn to “Whats” - to tactics, projects, deadlines, and to-dos.
As this point, everyone (finally!) starts “getting real” with each other, to who is responsible for what and more to the point is there really an accountability-based culture in place to promote and sustain high performance and positive change?
As these exercises proceed, what normally re-awakens is the understanding that the leadership team’s responsibility is to the organization as a whole, and not to any one particular individual, division, or practice area.
In this company’s case, from these exercises the hard decision was made to transition a pair of executives, as they embodied a legacy mindset and approach unsuited for the “business of the future” needed to be built.
And, as is more often the case than not, these transition conversations were more difficult in their anticipation than actuality, and as they were completed a new forward looking-energy and initiative was unleashed in the team members that remained.
I would encourage any business that feels “stuck” in any important aspect - revenue growth, cash flow, client satisfaction, culturally - to prompt a business intervention like this.
Yes, the outcomes will sometimes be difficult for specific individuals, but almost always beneficial for the organization as a whole.
People ask me what I do in winter when there's no baseball. I'll tell you what I do. I stare out the window and wait for spring. - Rogers Hornsby
One of the real privileges and joys of my life is coaching my eight and nine-year old sons' various youth sports teams.
And with springtime that means Little League Baseball.
This Saturday was a particular delight, as after playing our game, I took my sons and a few of their teammates to watch an exhibition game between a local traveling team and an all-star team from Tokyo, Japan.
These Tokyo youngsters were not just any team, as last summer they won the famed Little League Series, prevailing in a 16-team tournament that started with over 30,000 teams from 75 countries.
Watching youth baseball at any level is a treat, but the team spirit, precision, and respect with which the Japanese kids played the game was mesmerizing.
And for those that subscribe to the view that the "American Way" has come too much to mean "everyone gets a pat on the back and an attaboy for trying” - with a deleterious impact on our competitive drive - well then the contrasting styles (and results) between the American and Japanese teams were proof positive for that view.
A few vignettes:
- After each inning, the Japanese youngsters would sprint off the field into an attentive semi-circle around their coach, remove their hats as a show of respect, and stand quietly with eyes up as their coach instructed them for the inning to come.
- While, when their teammates were at the plate, the American players too often sat and chatted in their dugout, the Japanese players were on their feet, attentive and cheering.
- When an umpire called a close play against them, there was no eye-rolling, no demonstrative shoulder shrugging, only a fast hustle back to the dugout.
- At the end of the game, the Japanese players went to each section of the crowd and collectively bowed and thanked the spectators for attending and cheering.
- And my favorite as a beleaguered youth coach constantly searching for lost gloves, hats, and gear from my notoriously absent-minded players, all of the Japanese players' was exactingly lined up, cleanly packed, with a stray ball nowhere in sight.
- Perhaps a bit more controversially, when one of the Japanese players made an error (remember these are 11 and 12 year old boys!) instead of a "get the next one" as would be typical for an American coach, from the dugout came a roar and that player sprinted off the field, replaced and not seen for the remainder of the game.
Yes, here was a team that played the game with hustle, teamwork, respect, and an awesome will to win.
And well beyond baseball, isn’t that the kind of team that any manager in any field of endeavor would be thrilled and honored to lead?
And wouldn’t that be a team - just like those Japanese boys vanquishing 30,000+ teams on their way to a championship - that would just crush the competition?
Yes, this is of more than just passing cultural interest, as in our modern market the consequences of weak performance come harsh and fast - talented global competitors ready and eager to pick off dissatisfied customers, flaming online reviews diminishing reputations and brands, margins squeezed from above by customers unwilling to pay much for mediocre experiences, and from below by a fatness encouraged by a usually defended as virtuous managerial "light-handedness."
Please let me stop and stress that this is not a “Fuddy-Duddy” formulation, blaming the "kids" for all the ills of the world.
Having now coached a lot of American children and managed as many American young people, I assure you they all want and respond well to expectations of hard work, decorum, and measurable, concrete results.
No, it is the leaders and managers of organizations that need to do the daily hard and energetic work of setting team and individual objectives, of rewarding great performance and setting consequences for results that are lacking.
The great news is that not only does a higher accountability, "tough love" culture like this lead to better results (of course), not only is it more respectable to all the stakeholders of an organization, but...
...it also creates the best kind of fun.
The nutritious fun of working hard toward a goal and accomplishing it.
Of delivering more and more “low cost, high quality” value to customers.
And just like those Japanese baseball players, the fun of winning in the places that matter most, on the scoreboard and on the bottom line.
The fox knows many things, but a hedgehog knows one big thing.
- Ancient Greek Aphorism
Isaiah Berlin, in 1953, famously referenced this as a jumping off point for an essay on the relative importance of two kinds of knowledge, on the one hand that of principles and ideas, and on the other hand that of "ways of the world," street smarts, and technique.
I was reminded of it recently by an old and wise colleague, as we were evaluating an investment opportunity, and the relative importance of the executive team’s operating experience versus their big picture strategy and growth model for the business.
His point was that while those executives were certainly “foxes” - great resumes, hard workers, and excellent communicators - they were lacking as “hedgehogs,” pursuing an inefficient and difficult to scale business model.
We passed on the investment.
And it occurred to me how so many of us think and work like them - tens of millions of knowledge workers all over the world that know and do a lot of “little” things - how to code, talk, email, text, post, and tweet, but how too often doing so crowds out the "Deep Work" necessary to arrive at and execute upon business models that scale.
Perhaps the most vexing "focus" challenge of modern business, but for the disciplined executive one surprisingly easy-to-overcome through asking one simple question:
Does a particular bucket of stuff really make me and my company money or does it not?
Because focusing on making money almost always means focusing less on:
And more on:
And when we reflect on it, isn't this not just the stuff that makes us money, but is also the stuff we almost always enjoy and find the most fulfilling?
Isaiah Berlin's full "The Hedgehog and the Fox" essay can be read here.
Timeless, ancient wisdom worth applying to our frenetic, modern day.