Tag: Business

How Performance Reviews Can Kill Your Culture

Reading Time: 3 minutes

Performance reviews are designed to motivate and bring the best out of our teams, but they often do the opposite. Here’s how to bring out the best in your people.

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If you ask people what’s wrong with corporate workplaces, it won’t take long before you hear someone mention something about being put into a performance bucket. The A bucket is for the best, and the C bucket is for the underperformers. The middle and most common bucket is B, as it spares the supervisor from having to justify why an individual is exceptional or on the verge of getting fired. The problem is that ranking someone against their peers is not the ranking that matters and is counterproductive in terms of building an exceptional corporate culture.

People hate performance reviews. And why wouldn’t they? You either come up short against the superstars, walk away being told to keep doing what you’re doing, or leave feeling like your days are numbered. In this common construct, no one is getting the information they need to properly grow, and a toxic competitive situation is created within the organization. Forced comparisons against others don’t accomplish what we want from them. We think it inspires people. It often makes them dislike each other.

The problem is the system.

The goal of performance reviews is ostensibly to help people become better, but forced ranking has two serious flaws. First, it doesn’t take account of individual rates of improvement. We’re all starting from different places, and we’re also all improving at different rates. If you always come up short, no matter how hard you try, eventually you can’t be bothered putting in the effort to get better.

The second, more important, argument is that forced rankings create a toxic environment that rewards poor behavior. When you’re pitted against your coworkers, you start to game the system. You don’t need to improve at all to get into the A bucket, you just need to make the others look bad. The success of one person means the failure of another. How likeable are you? How good are you at whispering and gossip? How big is your Christmas present to your boss? You can end up cutting others down to stand out as a star performer. But undermining the success of your coworkers ultimately means undermining the success of the entire organization.

Margaret Heffernan, author and former CEO, explained on The Knowledge Project how the relationship between coworkers is fundamental to the function of an organization:

“…the whole premise of organizational life is that together you can do more than you can do in isolation, but that only works if people are connected to each other. It only really works if they trust each other and help each other. That isn’t automatic. … You’re only really going to get the value out of organizational life to the degree that people begin to feel safe with each other, to trust each other, to want to help each other…What impedes the flow is distrust, rivalry, or not knowing what other people need.”

Most of us inevitably compare ourselves to others at some point. Chronic comparing though leads to misery. What matters is not what we do compared to what someone else does, it’s what we do compared to what we’re capable of doing. Both as individuals and in organizations, we need to pay attention to this gap—the gap between where we are right now and what we’re capable of.

Internal motivation is easier to sustain. We produce and push ourselves because we get this immense satisfaction from what we are doing, which motivates us to keep doing it. It doesn’t work the same way when your motivation comes in the form of external comparisons.

So what do we do instead?

If you must grade performances, do it against the past. Is she learning? Is he improving? How can we increase the rate of progress and development? Empower people to help and learn from each other. The range of skills in an organization is often an untapped resource.

Organizations today are often grappling with significant corporate culture issues. It can be the one thing that differentiates you from your competitors. Comparing people against their past selves instead of each other is one of the most effective ways to build a culture in which everyone wants to give their best.

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Jeff Bezos: Big Things Start Small

Reading Time: 3 minutes

An interview with Amazon.com founder Jeff Bezos touches on the timeless lessons he’s learned for business success. The three big ideas are (1) thinking on a different timescale, (2) putting the customer first, and (3) inventing.

What we’re really focused on is thinking long-term, putting the customer at the center of our universe and inventing. Those are the three big ideas to think long-term because a lot of invention doesn’t work. If you’re going to invent, it means you’re going to experiment, you have to think long-term. These three ideas, customer-centricity, long-term thinking and a passion for invention, those go together. That’s how we do it and by the way, we have a lot of fun doing it that way.

Ballet or Rock Concert?

When asked about the pressures of running a public company and meeting quarterly earnings expectations he said:

Well, I think that if you’re straight forward and clear about the way that you’re going to operate, then you can operate in whatever way you choose. We don’t even take a position on whether our way is the right way, we just claim it’s our way, but Warren Buffet has a great saying along these lines. He says, “You can hold a ballet and that can be successful and you can hold a rock concert and that can be successful. Just don’t hold a ballet and advertise it as a rock concert. You need to be clear with all of your stakeholders, with are you holding a ballet or are you holding a rock concert and then people get to self-select in.”

Big Things Start Small

While there is no one recipe that fits all, there are elements of what Amazon does that help.

[I]nside our culture, we understand that even though we have some big businesses, new businesses start out small. It would be very easy for say the person who runs a US books category to say, “Why are we doing these experiments with things? I mean that generated a tiny bit of revenue last year. Why don’t we instead, focus those resources and all that brain power on the books category, which is a big business for us?” Instead, that would be a natural thing to have happen, but instead inside Amazon, when a new business reaches some small milestone of sales, email messages go around and everybody’s giving virtual high fives for reaching that milestone. I think it’s because we know from our past experiences that big things start small. The biggest oak starts from an acorn and if you want to do anything new, you’ve got to be willing to let that acorn grow into a little sapling and then finally into a small tree and maybe one day it will be a big business on its own.

Step By Step Ferociously

The Latin phrase gradatim ferociter Is a Bezos favorite. What does it mean?

Well it means step by step ferociously and it’s the motto for Blue Origin. Basically you can’t skip steps, you have to put one foot in front of the other, things take time, there are no shortcuts but you want to do those steps with passion and ferocity.

Loving What You Do

Not every day is going to be fun and easy. That’s why they call it work.

I have a lot of passions and interests but one of them is at Amazon, the rate of change is so high and I love that. I love the pace of change. I love the fact that I get to work with these big, smart teams. The people I work with are so smart and they’re self-selected for loving to invent on behalf of customers.

It’s not, do I love every moment of every day? No, that’s why they call it work. There are things that I don’t enjoy, but if I’m really objective about it and I look at it, I’m so lucky to be working alongside all these passionate people and I love it. Why would I go sit on a beach?

 

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Footnotes
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    Source of interview: https://twitter.com/producthunt/status/1125038440372932608?s=11

The Importance of Working With “A” Players

Reading Time: 3 minutes

Stop me if this sounds familiar. There is a person who toils alone for years in relative obscurity before finally cracking the code to become a hero. The myth of the lone genius. It’s the stuff of Disney movies.

Of course, we all have moments when we’re alone and something suddenly clicks. We’d do well to remember, though, that in those moments, we are not as independent as we like to think. The people we surround ourselves with matter.

In part, because we tell ourselves the story of the lone genius, we under-appreciate the role of a team. Sure, the individual matters, no doubt. However, the individual contributions are supercharged by the team around them.

We operate in a world where it’s nearly impossible to accomplish anything great as an individual.  When you think about it, you’re the product of an education system, a healthcare system, luck, roads, the internet and so much more. You may be smart but you’re not self-made. And at work, most important achievements require a team of people working together.

The leader’s job is to get the team right. Getting the team right means that people are better as a group than as individuals. Now this is important.  Step back and think about that for a second — the right teams make every individual better than they would be on their own.

Another way to think about this is in terms of energy. If you have 12 people on a team and they each have 10 units of energy, you would expect to get 120 units of output. That’s what an average team will do. Worse teams will do worse. A great team will take the same inputs and get a non-linear outcome. The result won’t be 120; it’ll be 360.No matter where you’re going, great teams will get you there multiples faster than average teams.

Here is a quote by Steve Jobs on the importance of assembling “A” players.

I observed something fairly early on at Apple, which I didn’t know how to explain then, but I’ve thought a lot about it since. Most things in life have a dynamic range in which [the ratio of] “average” to “best” is at most 2:1. For example, if you go to New York City and get an average taxi cab driver, versus the best taxi cab driver, you’ll probably get to your destination with the best taxi driver 30% faster. And an automobile; what’s the difference between the average car and the best? Maybe 20%? The best CD player versus the average CD player? Maybe 20%? So 2:1 is a big dynamic range for most things in life. Now, in software, and it used to be the case in hardware, the difference between the average software developer and the best is 50:1; maybe even 100:1. Very few things in life are like this, but what I was lucky enough to spend my life doing, which is software, is like this. So I’ve built a lot of my success on finding these truly gifted people, and not settling for “B” and “C” players, but really going for the “A” players. And I found something… I found that when you get enough “A” players together, when you go through the incredible work to find these “A” players, they really like working with each other. Because most have never had the chance to do that before. And they don’t work with “B” and “C” players, so it’s self-policing. They only want to hire “A” players. So you build these pockets of “A” players and it just propagates.

Building a team is more complicated than collecting talent1. I once tried to solve a problem by putting a bunch of PhDs’ in a room. While comments like that sounded good and got me a lot of projects above my level, they were rarely effective at delivering actual results.

Statements like “let’s assemble a multidisciplinary team of incredible people” are gold in meetings if you work for an organization. These statements sound intelligent. They are hard to argue with. And, most importantly, they also have no accountability built in, and they are easy to wiggle out of. If things don’t work out, who can fault a plan that meant putting smart people in a room.

Well … I can. It’s a stupid plan.

The combination of individual intelligence does not make for group intelligence. Thinking about this in the context of the Jobs quote above, “A” players provide a lot more than raw intellectual horsepower. Among other things, they also bring drive, integrity, and an ability to make others better.  “A” players want to work with other “A” players. Accepting that statement doesn’t mean they’re all “the best”.

In my experience solving difficult problems, the best talent available rarely led to the best solutions. You needed the best team. And the best team meant you had to exercise judgment and think about the problem. While there was often one individual with the idea that ultimately solved the problem, it wouldn’t have happened without the team.  The ideas others spark in us are more than we can spark in ourselves.

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Footnotes
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    A play on a quote by Bill Belichick

Batesian Mimicry: Why Copycats Are Successful

Reading Time: 5 minutes

One of our first interview guests for The Knowledge Project was the former NFL executive Michael Lombardi. In our interview, we discussed topics ranging from the nature of leadership to decision making in a football context. Mike is one of the wisest thinkers associated with the game.

We heard Mike on an NFL podcast recently, and in a brief clip you can listen to here, Mike makes a fascinating comment on differentiating between a Mimic and the Real Thing:

“There’s two kinds of snakes you come across. There’s the Texas Coral Snake, and the Mexican Milk Snake, and they both look exactly alike. The Texas Coral Snake is dangerous, it’s venomous, it can kill you in a minute. The Mexican Milk Snake can’t do anything to you; it’s an impostor.”

Mike got the idea from my friend and CEO of Glenair, Peter Kaufman. Following Mike’s lead, we chose to dig in a little further.

***

Turns out there are a host of Coral Snake Mimics, all designed to look exactly as fierce as the true bad guys. Besides the Mexican Milk Snake, there is the Scarlet King Snake, the Florida Scarlet Snake, and the California Mountain Kingsnake. (At least.)

For an example, here are the Texas Coral Snake on the left and the Mexican Milk Snake on the right. Pretty damn close!

220px-lampropeltis_triangulum_annulata

According to Wikipedia, the Texas Coral Snake’s venom is a “powerful neurotoxin, causing neuromuscular dysfunction”, and terrifyingly describes its bite as coming from “a pair of hollow, small, fixed fangs in the front of its upper jaw, through which the venom is injected and encouraged via a chewing motion. Due to this method of venom delivery, a coral snake must bite and hold on for a brief time to deliver a significant amount of venom…”

The Milk Snake, on the other hand, is described as a pretty ideal pet: “The Mexican Milk Snake adapts well to captive care, and its smaller size and striking colorations can make it an attractive choice for a pet snake. They are normally docile, and not typically apt to bite or expel musk.”

So, how is it that these two look alike? It’s due to a phenomenon called Batesian Mimicry.

In the 1850s, the naturalist Henry Walter Bates found a certain set of butterflies who were clearly not of the same species but whose wings looked almost the same to the naked eye. After thinking it over, Bates eventually figured out what was going on: While the butterflies which were toxic to potential predators (the “models”) were able to operate freely and relatively unmolested, there had also developed a “mimic” population of butterflies which wasn’t toxic at all, yet still went untouched!

In fact, biologists eventually figured out that the more toxic and dangerous the “model” was and the more frequently they appeared in the local population, the easier it was for its “mimics” to get by! Predators simply wouldn’t take the risk of mixing up the two. If there aren’t as many “models” around or they aren’t that dangerous, the mimics have a harder time.

This is a wonderful model, and in the practical world we live in, a similar phenomenon abounds: Copycats or “pretenders to the throne” are often very effective, very convincing “mimics” of the true champions. They dress the part, they talk the talk, and they know what buttons to push. But in the end, they are merely chauffeurs.

We see a very Batesian effect at work: The more impressive the “model,” the more effective its mimics can be in convincing people they too are impressive, and in all the same ways. But for every Warren Buffett (just one by our count), there has been many “future” Warren Buffett’s. For every Steve Jobs, there have been many “next” Steve Jobs’.

In fact, sometimes even just appearances can be quite convincing: now-disgraced Theranos founder Elizabeth Holmes was very fond of wearing a very Steve Jobsian black turtleneck outfit.

It seems almost a law of nature that success will be copied, sometimes in a very disgraceful way. (Charlie Munger thinks that the fundamental algorithm of life is “Repeat what works.”)

Because they can be very convincing,  we must be wise enough to watch out for Batesian mimicry — even in ourselves.

This brings up an interesting, at times paradoxical, question: Who can best tell the difference between a Coral Snake and its Mimics? The Coral Snake itself.

The real thing knows a fake. Charlie Munger once commented on this in relation to the field of money management:

“It’s very hard to tell the difference between a good money manager and someone who just has the patter down. If you aren’t a good money manager yourself, rather than trying to pick one, you’re probably better off with a low cost index fund. ‘It takes one to know one’.”

***

An insight this good is only possible through continued study across the largest and most relevant fields of study. Peter got this idea by studying biology, a field full of incredible insight but, strangely underappreciated by most “non-biologists”. It’s not just ideas about predators and prey, but niches, competition, co-evolutionary arms races and a whole host of others which give us massive insight into the human world.

Peter realized that studying across fields like biology and physics is something like buying an index fund: It works because you capture all the important companies traded on the public exchange, not just a select few. That means you capture the massive winners, which tend to greatly outweigh the failures.

Studying across all of the important fields gives you the same advantage, except it’s even better: If an index fund buys a new position, it must sell something to do so; consequently, the “big winners” can only impact your portfolio in a limited way. But if you come to understand a new Great Idea, you don’t have to give up the ones you already know! This is a great advantage.

And so it’s worth taking the time to work on learning all the big ideas you can find, not just the ones you want to learn. In that search, you’ll find a host of big winners you didn’t even know existed.

If you liked this post, you’ll probably also love:

The Need for Biological Thinking to Solve Complex Problems — How should we think about complexity? Should we use a biological or physics system? The answer, of course, is that it depends. It’s important to have both tools available at your disposal.

The Founder Principle: A Wonderful Idea from Biology — In his brilliant The Song of the Dodo, David Quammen gives us not only the stories of many brilliant biological naturalists including Mayr, but we also get a deep dive into the core concepts of evolution and extinction, including the Founder Effect.

Biology Enables. Culture Forbids. — From a biological perspective, nothing is unnatural. Whatever is possible is by definition also natural.

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Creating a Growth Mindset in the Workplace

Reading Time: 5 minutes

Carol Dweck‘s concept of Mindset permeates through every aspect of our lives.

One area particularity affected is in the workplace. We spend half of our day at work (some of you likely spend more than half) and both your mindset and the mindset of those around you will have a significant impact on your life, especially the mindset of your boss. Dweck comments:

Fixed-mindset leaders, like fixed-mindset people in general, live in a world where some people are superior and some are inferior. They must repeatedly affirm that they are superior, and the company is simply a platform for this.

These leaders tend to have a strong focus on personal reputation, generally at the expense of the company. Lee Iacocca, during his time at Chrysler, is a good example of this. Iacocca had his ego severely bruised when he was forced out of Ford. Fixed-mindset leaders tend to respond to failure with anger instead of viewing it as an opportunity to learn or get better.

So the king who had defined him as competent and worthy now rejected him as flawed. With ferocious energy, Iacocca applied himself to the monumental task of saving face and, in the process, Chrysler Motors. Chrysler, the once thriving Ford rival, was on the brink of death, but Iacocca as its new CEO acted quickly to hire the right people, bring out new models, and lobby the government for bailout loans. Just a few years after his humiliating exit from Ford, he was able to write a triumphant autobiography and in it declare, ‘Today, I’m a hero.’

He showed Ford that they made a mistake when they let him go, and he reveled in his triumph. But in his glory-basking, Iacocca forgot that the race wasn’t over yet.

This was a hard time for the American automotive industry, the Japanese were challenging the market like no one ever had before. Chrysler needed to respond to the competition or they would be in trouble again. Meanwhile, Iacocca was still focused on his reputation and legacy.

He also looked to history, to how he would be judged and remembered. But he did not address this concern by building the company. Quite the contrary. According to one of his biographers, he worried that his underlings might get credit for successful new designs, so he balked at approving them. He worried, as Chrysler faltered, that his underlings might be seen as the new saviors, so he tried to get rid of them.

Instead of listening to the advice of his designers and engineers, Iacocca dug his feet into the ground.

See, a fixed-mindset doesn’t easily allow you to change course. You believe that someone either has ‘it’ or they don’t: it’s a very binary frame of mind. You don’t believe in growth, you believe in right and wrong and any suggestion of change or adaptation is considered a criticism. You don’t know how to adopt grey thinking. Challenges or obstacles tend to make you angry and defensive. 

Iacocca was no different.

But rather than taking up the challenge and delivering better cars, Iacocca, mired in his fixed mindset, delivered blame and excuses. He went on the rampage, spewing angry diatribes against the Japanese and demanding that the American government impose tariffs and quotas that would stop them.

Blame is a big part of the fixed-mindset; when something goes wrong you don’t want to take responsibility because that would be akin to accepting inferiority. This can push some bosses to become abusive and controlling. They feel superior by making others feel inferior. Colleagues may feel this way too, but management has power. This is when you will notice the effect of mindset on your corporate culture. Everything starts to revolve around pleasing upper management. 

When bosses become controlling and abusive, they put everyone into a fixed mindset. This means that instead of learning, growing, and moving the company forward, everyone starts worrying about being judged. It starts with the bosses’ worry about being judged, but it winds up being everybody’s fear about being judged. It’s hard for courage and innovation to survive a companywide fixed mindset.

In these circumstances, the fear of punishment leads to groupthink. No one wants to dissent or put their hand up because it’s likely to get slapped. 

So what can you do if you’re new to a company and working against a fixed-mindset? This will be a difficult road but there are definitely ways of nudging your company towards a growth mindset.

Dweck outlines the main attributes that create a growth-mindset environment:

  • Presenting skills as learnable
  • Conveying that the organization values learning and perseverance, not just ready-made genius or talent
  • Giving feedback in a way that promotes learning and future success
  • Presenting managers as resources for learning.

At the end of each chapter of Dweck’s book, she has a brilliant section entitled ‘Grow Your Mindset.’ She reviews the chapter’s contents and asks the reader probing questions to help them evaluate their situation and suggests concrete ways to move forward. Here are a few pertinent examples to explore:

What kind of workplace are you in?

Are you in a fixed-mindset or growth-mindset workplace? Do you feel people are just judging you or are they helping you develop? Maybe you could try making it a more growth-mindset place, starting with yourself. 

Is it possible that you’re the problem?

Are there ways you could be less defensive about your mistakes? Could you profit more from the feedback you get? Are there ways you can create more learning experiences for yourself? How do you act toward others in your workplace? Are you a fixed-mindset boss, focused on your power more than on your employees’ well-being? Do you ever reaffirm your status by demeaning others? Do you ever try to hold back high-performing employees because they threaten you?

Can you foster a better environment?

Consider ways to help your employees develop on the job: Apprenticeships? Workshops? Coaching sessions? Think about how you can start seeing and treating your employees as your collaborators, as a team. Make a list of strategies and try them out. Do this even if you already think of yourself as a growth-mindset boss. Well-placed support and growth-promoting feedback never hurt.

Do you have procedures to overcome groupthink?

Is your workplace set up to promote groupthink? If so, the whole decision-making process is in trouble. Create ways to foster alternative views and constructive criticism. Assign people to play the devil’s advocate, taking opposing viewpoints so you can see the holes in your position. Get people to wage debates that argue different sides of the issue. Have an anonymous suggestion box that employees must contribute to as part of the decision-making process. Remember, people can be independent thinkers and team players at the same time. Help them fill both roles.

Mindset is filled with practical advice that will change the way in which you think and interact with the world. Through examples from her rigorous research Dweck eloquently explains the nature of the two mindsets and their influence on sports, business and relationships. Since culture eats strategy, it’s important to understand her main points. Understanding her core concepts will also add depth to your comprehension of metal models like confirmation bias and bias from overconfidence.

If you’d like a bit more on Mindset we suggest taking a look at Dweck’s Google talk or perhaps revisit a more detailed explanation of the two mindsets.

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Simple Rules for Business Strategy

Reading Time: 5 minutes

The book Simple Rules by Donald Sull and Kathleen Eisenhardt has a very interesting chapter on strategy, which tries to answer the following question: How do you translate your broad objectives into a strategy that can provide guidelines for your employees from day to day?

It’s the last bit there which is particularly important — getting everyone on the same page. 

Companies don’t seem to have a problem creating broad objectives (which isn’t really a strategy). Your company might not call them that, they might call them “mission statements” or simply “corporate goals.”  They sound all well and good, but very little thought is given to how we will actually implement these lofty goals.

As Sull and Eisenhardt put it: 

Developing a strategy and implementing it are often viewed as two distinct activities — first you come up with the perfect plan and then you worry about how to make it happen. This approach, common through it is, creates a disconnect between what a company is trying to accomplish and what employees do on a day-to-day basis.

The authors argue that companies can bridge this gap between strategic intent and actual implementation by following three steps:

  1. Figure out what will move the needles.
  2. Choose a bottleneck.
  3. Craft the rules.

1. Moving the Needles

The authors use a dual needle metaphor to visualize corporate profits. They see it as two parallel needles: an upper needle which represents revenues and a lower needle which represents costs. The first critical step is to identify which actions will drive a wedge between the needles causing an increase in profits, a decrease in costs, and sustain this over time.

In other words, as simple as it sounds, we need an actual set of steps to get from figure a. to figure b.

screen-shot-2016-10-17-at-1-36-10-pm

What action will become the wedge that will move the needles?

The authors believe the best way to answer this is to sit down with your management team and ask them to work as a group to answer the following three questions:

  1. Who will we target as customers?
  2. What product or service will we offer?
  3. How will we provide this product at a profit?

When you are trying to massage out these answers remember to use inversion as well. 

Equally important are the choices on who not to serve and what not to offer.

Steve Jobs once pointed out that Apple was defined as much by what it didn’t do as by what it did.

2. Bottlenecks

Speaking of inversion, in order to complete our goal we must also figure out what’s holding us back from moving the needles — the bottlenecks standing in our way.

When it comes to implementing a strategy of simple rules, pinpointing the precise decision or activity where rules will have the most impact is half the battle. We use the term bottleneck to describe a specific activity or decision that hinders a company from moving the needles.

You may be surprised at the amount of bottlenecks you come across, so you’ll have to practice some “triage” of your issues, sorting what’s important from what’s really important.

The authors believe that the best bottlenecks to focus your attention on share three characteristics:

  1. They have a direct and significant impact on value creation.
  2. They should represent recurrent decisions (as opposed to ‘one off’ choices).
  3. They should be obstacles that arise when opportunities exceed available resources.

Once we’ve established what the bottlenecks are, it’s time to craft the rules which will provide you a framework in which to remove them.

3. Craft the Rules

Developing rules from the top down is a big mistake. When leaders rely on their gut instincts, they overemphasize recent events, build in their personal biases, and ignore data that doesn’t fit with their preconceived notions. It is much better to involve a team, typically ranging in size from four to eight members, and use a structured process to harness members’ diverse insights and points of view. When drafting the dream team to develop simple rules, it is critical to include some of the people who will be using them on a day-to-day basis.

This probably seems like common sense but we’re guessing you have worked at least one place where all information and new initiatives came from above, and much of it seemingly came out of nowhere because you weren’t likely involved.

In these situations it’s very hard to get buy-in from the employees — yet they are the ones doing the work, implementing the rules. So we need to think about their involvement from the beginning.

Having users make the rules confers several advantages. First, they are closest to the facts on the ground and best positioned to codify experience into usable rules. Because they will make decisions based on the rules, they can strike the right balance between guidance and discretion, avoiding rules that are overly vague or restrictive. User can also phrase the rules in language that resonates for them, rather than relying on business jargon. By actively participating in the process, users are more likely to buy into the final rules and therefore apply them in practice. Firsthand knowledge also makes it easier to explain the rules, and their underlying rationale, to colleagues who did not participate in the process.

It’s important to note here that this is a process, a process in which you are never done – there is no real finish line. You must always plan to learn and to iterate as you learn — keep changing the plan as new information comes in. Rigidity to a plan is not a virtue; learning and adapting are virtues. 

***

There’s nothing wrong with strategy. In fact, without a strategy, it’s hard to figure out what to do; some strategy or another must guide your actions as an organization. But it’s simply not enough: Detailed execution, at the employee level, is what gets things done. That’s what the Simple Rules are all about.

Strategy, in our view, lives in the simple rules that guide an organization’s most important activities. They allow employees to make on-the-spot decisions and seize unexpected opportunities without losing sight of the big picture.

The process you use to develop simple rules matters as much as the rules themselves. Involving a broad cross-section of employees, for example, injects more points of view into the discussion, produces a shared understanding of what matters for value creation, and increases buy-in to the simple rules. Investing the time up front to clarify what will move the needles dramatically increases the odds that simple rules will be applied where they can have the greatest impact.

***

Still Interested? Read the book, or check out our other post where we cover the details of creating your simple rules.

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