— LUISFRADE

Meeting questions

Question Set 1: The Customer and the Marketplace
Who do we serve?
Who is our target customer?
In what arena will we be most active?

The more specific you can be about the particular group that you are try- ing to serve, the more tailored and specific you can develop your metrics of success with that group.
Leaders in charge of different functions often have different perspectives on who the customer is and who the organization is built to serve.

Conscious, mindful, strategic decisions need to be made about the pri- oritization of the customers you serve because prioritization affects both how you collect Organizational Outcome data and how you evaluate whether you are winning.

Question Set 2: Competitor Awareness
Who else is trying to serve our target customer?
Who or what is threatening our existence as an institution?
Who or what is our competition, and what do we take from them when we beat them into the ground?

It’s useful and motivating to be scrappy and angry about the competition.
Make it a practice to actually imagine your competition stealing your customers and bleeding your business until you are forced to stop operating.

Question Set 3: The Change to Strange
What do we do that is strange?
What outcomes are we willing to pursue that our competitors would classify as dumb?
What risks are we willing to take that other businesses think are not worth taking?

Make sure all the members of your leadership team understand the ways in which your strategy is risky. If there aren’t any risks to your strategy, then cus- tomers probably aren’t going to notice it.

Remember, acting just like your competitors is very risky; it only feels safe because no one is laughing at you. When no one is laughing at you, you are probably pursuing opportunities that are fairly valued by the market. You want pursue opportunities that are overvalued by customers and/or underval- ued by competitors. If the pain of being laughed at is worse for you than the gain of making the best move, then you probably can be a good manager but not a great leader.

If you are not chasing the exact same customer base or following the same strat- egy as your competitors, then what you measure as Organizational Outcomes should reflect what is strange about your organization’s approach to winning.

When you tailor your Organizational Outcomes to your strategy, there is a good chance you and your work-force will end up obsessing on things your competitors don’t think too much about because they are chasing something else.
You and your workforce should act in ways your competitors would not think of duplicating. Your organization will
become strange: “out of the ordinary; unusual or triking; differing from the normal.” And you want it that way.

Question 4: Winning Your Way
What three to four pieces of evidence or trends would allow us to claim, “We’re winning doing it our way,” in three to five years?

Answering this last question is the culmination, the quest of the entire meeting. You have not finished until you have distilled everything your organization exists to create into three or four metrics.
Less Is More

You might be saying to yourself, “Our company measures way more than three or four Organizational Outcomes. We must be doing a great job with metrics!” This is one of those areas where more is decidedly not better. Why? Two reasons:

Everything can’t be most important. The whole point of choosing three to four Organizational Outcomes is that you need to boil everything your organization does into a few numbers that you, your management team, and your workforce can obsess on daily. If you are trying to meas- ure and manage everything, you are not going to be able to obsess on any of them. You want focus.

Measuring things right takes lots of energy and invest- ment. When you measure lots of Organizational Outcomes, you are probably wasting a lot of energy and money, and you probably are measuring lots of the wrong things poorly. What you want to invest your resources into is measuring the few most important things in a valid way.

Once you do decide to implement an organizational change, then your Organizational Outcome metrics must change to reflect your new way of winning.

Listen, choosing a strategy is risky (it better be!).

Once you choose Organizational Outcomes and begin to take them seriously, they will affect everything you do as an organization. They will affect what seems reasonable and what seems valuable.
If strategy changes, the metrics need to change.

Strategy maps have a way of packaging your messy work and making it all look very clean, neat, polished, and finalized. It often looks good even if it is not very good. Creating strategy pictures is useful but not nearly as useful as making sure of the following:

That you have a clear story that you actually believe in that delineates what your organization creates that is valuable, rare, and hard to imitate.

That you have worked really hard to translate this story into a set of competitiveness concepts that your organization is will- ing and able to do while other firms are not.

That your leadership team agrees on the ways you are actually going to gather the data to represent your competitiveness concepts.

As long as you remember that a strategy picture is just some pretty wrapping and is not the solution itself, you should be fine.

Buying strange on the cheap:

Is it really possible that there is a special breed of person out there who is predestined to make your strategy go but who is paradoxically undervalued by the market? Consider two perspectives:

• A strange workforce that delivers what your customers like but your competitors think is dumb means that, by definition, your competition will undervalue the people you need the most. When you try to win in a strange way, it means competitors aren’t trying to win that way, which then means they aren’t valuing the strange workforce traits that you are. And this means you can create a competitive advantage “buying strange” on the cheap and then selling results to the market- place in a way your competitors aren’t willing or able. But if you play the game just like all your competitors, then you will basically all be trying to hire the same people with the same characteristics. If this is the case, then there may not be any great values out there for you, and customers probably won’t notice anything extraordinary about your organization.

• Market inefficiencies develop out of poor measurement. Even if you are trying to beat your competitors at their own game, you can locate and capture market inefficiencies if you are able to define and measure performance better than your competitors. You literally can see value that they do not see. “If gross miscalculations of a person’s value could occur on a baseball field, before a live audience of 30,000 and a television audience of millions more, what did that say about the measurement in other lines of work? If professional baseball players could be under or over-valued, who couldn’t?” Most organizations don’t do a great job of measuring performance because measuring the right things in a valid way is very hard. You don’t want to be like other organizations. You want to be strange.

Your job as a leader is to figure out what strange obsession your workforce should have in order to maximize wins, and then you need to find a valid way to measure it and make it happen.

Make sure you find some value-creating activity that your workforce ele- vates to an art form.

When you forge a strange new definition of winning, it creates new demands for how your workforce must act. Some of your best people will be willing and able to adapt their skills toward your strange approach to

business, and will be invigorated by the new way of winning. Others will not be willing, or able, to start playing according to your new rules. Remember, you have designed your version of strange to be hard to imitate. By design, it will not be easy for normal contributors to change to strange.

The people who are best at winning the normal way become undervalued by your organization once you change to strange. This process is the mirror image of how the strange people you need most are undervalued by the normal market. People who have a great talent conducting “business as normal” will no longer be treated like they are great at your organization. It’s nothing personal— it’s just that their “traditional” skills will not help you win your own way. This means that your best people who are superior at conducting business as normal can get a better deal at normal organizations. You have intentionally created a situation where the market now values normal skill sets more than you do.
Strange Workforce Deliverables: Workforce-Wide Versus Job-Specific

The phrase “Strange Workforce Deliverables” sort of makes it sound like the entire lot of people in your organization need to be strange in the same way— as if all your employees, workforce-wide, need to have some innate quirk that makes them stand out as particularly valuable to you and your strategy. As if once upon a time a strange tribe existed and somehow got blown apart and dispersed throughout the world, and your job as a leader is to find these peo- ple and reassemble them back as a tribe right there in your organization.

However, the meaning of the phrase “Strange Workforce Deliverables” often depends on what particular job you’re talking about. In other words, what an employee needs to obsess about to move your Performance Drivers depends on the role that the employee plays in creating value within the organization. To make your organization stand out to customers, your sales- people and engineers might need to be strange in some of the same ways, but they might also need to be strange in some very different ways.

Workforce-Wide Strange Deliverables

What obsession does everybody in your organization need to bring to the party to make your organization stand out?
Lots of firms think that they have the answer to this question, and they call them “core values” or sometimes “core competencies.” They usually have about eight of them, and they usually include
teamwork, integrity, initiative, and accountability. And excellence, don’t forget excellence. If this sounds like your list, then you are in very good company.
The first problem is that this is not a place where you want to be in good company. These certainly are nice, useful traits to have in a workforce, in the same way that electricity is useful to have. But will this generic list differen- tiate you in customers’ eyes? Can these workforce traits make you strangely valuable to the market if every other organization, including your competition, is trying to build them into their workforces too?
The second problem is that these workforce characteristics probably are not tightly linked to your Performance Driver metrics, because vague work- force traits like “initiative” are not the best way to game your unique Performance Drivers. Think deterministically about Performance Drivers: What makes them go up and down? Try to think of your Workforce Deliverables as gears in an engine that need to line up almost perfectly with your Performance Driver gears, so that when your Workforce Deliverables turn, it makes it very likely than the Performance Drivers turn. Your job as leader is to minimize the slippage that occurs between these gears. Remember, workforces are means to achieving your organization’s ends.
Does your organization need any workforce-wide characteristics that are unique to your strategy?

Your goal is to find a way for your organization to take risks that you think are intelligent, your customers value, and that your competitors will not or cannot pursue.

Some important questions:
How might we prove that one job applicant or employee brings us the strange deliverable while another job applicant or employee does not?

How does this workforce concept reveal itself in actual behav- iors or results that customers will notice and care about?

What evidence of the strange deliverable could we witness in the real world?

How can we build a process to gather data on this phenomenon?

Job-Specific Strangeness: Different Deliverables from Different Jobs

In reality, what it takes to move your Performance Drivers often is a bunch of different deliverables from different jobs that complement each other rather than duplicate each other. It’s more like a puz- zle where each job’s deliverables need to fit together to form a cohesive whole that makes customers say, “Wow!”

So both the impor- tance and the meaning of strange depends on which job we’re talking about.

What makes your job-specific deliver- ables strange and effective depends on why the job exists in your organiza- tion, and the only way to figure this out is to work through each job, one at a time. Will these job-specific discussions be time-consuming? Yes, they will be—and painful to boot. Using the exercise analogy, these are the painful repetitions that will make you stronger. This is exactly why most of your competitors are messing this up and not executing their strategies and why most consumers don’t notice much difference between organizations.

Important Question Sets:
How much strategic leverage does this job have? Is this job an executor, an operator, or an outsourcer?

How much does good versus bad performance on this job affect whether we differentiate our organization and execute our strategy?

All jobs are not created equal. Nothing personal, but some jobs are more important to executing your strategy than other jobs.1 You already know this in your heart, of course. But it is currently not in vogue to say it out loud or do anything about it.

If executors fail, strategy dies.

About Outsourcer Jobs

If you find a job in your organization that you have a hard time connecting to any of your Performance Drivers, there is a good chance that you should either revamp or outsource that job—even if you have always kept that job within your organization, and even if it feels uncom- fortable to hire a company to do that workfor you.

So why not always just focus on what people accomplish and be done with it? Why spend time dealing with behaviors and knowledge if you can just measure results? Three reasons. First, it is difficult to use accomplishment data to help individuals who do not produce the desired accomplishments because you do not have information on what they need to change in order to help you win. Second, the results of a job often depend on a set of behaviors done across a set of jobs, and attributing all of the credit to one job may be invalid and misleading. Finally, you want information on how the people got the results because people often game metrics and get short-term results in a way that creates long-term value destruction. For these three reasons, it is also important to gather data on how employees act and what employees know.

//

Getting people motivated to achieve, and making it uncomfortable for poorly performing employees.

//

Be strange enough so that not everyone wants to work in your com- pany, just the people who are obsessed about delivering the unique value that your company is built around.

//

Summary

Figure 10.2 summarizes the points made in this chapter and might serve as a guide as you convert your theory of winning into data that you use to execute your strategy. Here’s how to interpret the figure to get the important take- aways:

Make sure you can articulate your theory of how you will differentiate from and beat your competition. This is the center of everything you measure, as shown in the figure.

Formalize your competitiveness concepts and map out how they affect each other. This is what the Strange Workforce Value Chain helps you figure out. This is the meaning of the arrows between the concepts (concept B causes concept A to occur).

Figure out what concepts are most critical. Don’t measure everything, just what few competitive concepts are most important to differentiating and are reflective of winning.

Make sure that the competitive concepts antagonize each other so that as a system they prove that you are winning and not just temporarily gaming a metric in isolation. This is the meaning of the lightning bolts in the figure.

Develop approaches to collecting data that actually repre- sent your concepts so that the data are meaningful and useful and not just measurement error. It may be useful to develop multiple measures of key concepts so that you can triangulate your data.

Put the data into a spreadsheet on an on-going basis so that you can bring discipline to your concepts and know whether you are managing successfully and perhaps even test the links between the concepts.

Conclusion

Let’s wrap up this book where we started. Here is the basic logic that gets you to strange: Your organization is not going to be great unless your cus- tomers reliably notice something out of the ordinary about your products and services. And customers are probably not going to detect much extraordinary about your products and services if your workforce is essentially the same as your competitors’. This is why it is advantageous to make the change to strange.

Making the change to strange is a lot of hard work, and it also can be risky. We covered many reasons why the attempt to become extraordinary can fail. This is the reason most of the organizations within an industry are interchangeable from a customer perspective. The good news is that there are solid opportunities for competitive advantage in this area because most organizations are not very strategic or thoughtful about differentiating
through their people or their people management systems. In fact, most organizations chase “benchmark averages” for their people systems and rush to be just like everyone else (only cheaper). Most organizations are not par- ticularly good at linking their workforce metrics to their ability to make cus- tomers say, “Wow!” or put the hurtin’ on competitors.

At a minimum, I hope this book convinced you to stop hoping for extraordinary results with an ordinary, normal workforce. Extraordinary results don’t show up by magic; they show up when you build a workforce that is willing and able to convert your ideas about differentiating and win- ning into a reality that customers notice and embrace.

This book wins if you use the Strange Workforce Value Chain to devel- op your story about your workforce and how they are going to make cus- tomers want to give you their business and tell their friends about you. This book knocks the cover off the ball if it helps you develop measures that allow you to manage whether your workforce is helping you make your story come true. And this book puts you in another game entirely if you use this data to make results-based decisions about your investments into building a strange workforce and a great organization.