Good morning friends
Our last two letters focused on the power unlocked by building a scaffolding of meetings in our businesses. Regular, focused flows of communication are the heartbeat of success.
However, as I finished last week’s letter, I was struck by an image of thousands of people stuck in unending meetings with nothing happening.
The scaffolding provides structure, and we need action to get the building done; both are essential.
/ strategy
My desire to emphasise action took me back twenty-five years to Jim Collins’ HBR classic, Turning Goals into Results: The Power of Catalytic Mechanisms.
Collins’ work emphasizes the importance of vision and purpose in building a great company. His research shows that companies which have big ambitions that take multiple years to achieve outperform others. Vision, purpose, and audacious goals provide a focal point for intentional action.
And yet, clearly, he too was worried that his advice might lead people astray.
He comments, “most executives ardently hope that their outsized goals will become a reality. To that end, they write vision statements, deliver speeches, and launch change initiatives. They devise complicated incentive programs, formalize rules and checklists, and pen policies and procedures. In other words, with the best intentions, they create layer upon layer of stultifying bureaucracy” – the opposite of what Collins knows creates results.
In Collins’s work, strategy comes alive through intentional action and processes.
He advises, ‘create catalytic mechanisms’, nonbureaucratic processes that bring strategy to life, linking objectives and performance.
Granite Rock, a company selling construction materials, allows customers to deduct any items from their invoice, no questions asked. It’s a powerful way to ensure commitment to customer service.
Fabric company, W.L. Gore gives workers the right to fire their manager, they can’t fire them from the company, but they can bypass them and report to someone else – ensuring leaders focus on developing their teams.
The Ritz Carlton allows any employee to spend up to $2,000 resolving a guest’s problem and Netflix requires no approvals for travel expenditure (their reasoning is, if they can’t trust you to be responsible with flight costs, how do they trust you to run multi-million-dollar budgets).
Each one is a simple process reflecting core values and unlocking possibilities.
Collins identifies five catalytic mechanism characteristics.
First, they produce desired results in unexpected ways.
The Ritz Carlton doesn’t try to predict what guest problems might arise and have a thousand-page manual describing each eventuality, they have a mechanism that allows any issue to be addressed, in turn guaranteeing an ongoing flow of information improving customer service.
Second, and this I love, it “distributes power for the benefit of the overall system, often to the great discomfort of those who traditionally hold power”.
We all become invested in the ‘way things are done around here’. Distributing power allows new ideas to surface creating ongoing renewal.
Collins, concerned that his business school classes were dominated by a few students, implemented a red flag system. At the beginning of each semester, he gave each student a red flag. They could use it to interrupt the lecture at any point and everyone else had to listen to them. The catch? They could only use it once.
This mechanism allowed a student to challenge then CEO of the Body Shop, Anita Roddick on their Third World manufacturing practices. It required that Roddick first listen before responding.
Collins comments, “The spirited interchange between these two passionate and well-informed people produced more learning than anything I could have scripted. Without the red flag, we would have just had another session of ‘I’m CEO and let me tell you how it is’”.
Three, they have teeth – imagine being responsible for a couple of unpaid Granite Rock invoices or a few $2,000 guest corrections at the Ritz-Carlton.
Four, they reject ‘viruses’ – no command-and-control manager would accept W.L. Gore job. The catalytic mechanism saves a lot of hiring headaches.
Five, they produce ongoing effects. They’re not once-off events.
Amusingly, Collins says his article is not intended as a ‘how-to’, which is precisely where life gets messy. We know the principles; we stumble on implementation.
Nevertheless, he gives five tips. My favourites are ‘Don’t just add, remove’ and ‘Create don’t copy’.
The quickest route to building trust with your teams is removing obstacles to their success, regularly asking employees what should be stopped, started, or amplified is a powerful way to create simplicity.
List all your business’s processes. Do they represent your strategy and values? If not, bin them.
My favourite are businesses who values state they’re committed to innovation and agility but require four approvals before a new laptop can be purchased…
//self
Collins uses himself to explain ‘create don’t copy’.
His personal vision “is to contribute through teaching and to harness my curiosity and passion for learning in ways that make a positive impact on the world”.
It requires he spend time mostly on research, writing and teaching and limits consulting only to instances where he could contribute as a teacher.
To reinforce that he has two rules.
One, any CEO who wants to work with him must come to his offices in Boulder. This ensures the CEO is committed to doing the work.
Two, he restricts consulting to four days a year per company. This forces him to teach the principles and the company knows they must figure out the rest.
He notes, “Admittedly, these are highly unusual devices, and they would be disastrous for most consulting firms that depend on continuous growth to feed their machine. Yet they are perfectly designed for a strategy aimed at explicitly not building a large consulting business. They are unique to me, as all catalytic mechanisms should be to their creators”.
This letter is one of my catalytic mechanisms. I was determined that my coaching work would be energised by best practice.
Composing it requires constant reading and researching. I dedicate 600 hours a year to that process. Writing it forces me to clarify my thoughts about what I’ve read. The result is I have rich material to share with my clients.
If I were building a media company or planning to be a glitzy influencer, it would be a disaster but as a mechanism for enriching my coaching work, it is powerful. And I love reading, writing, and learning. It works for me.
///soul
Collins’ requirement to ‘create not copy’ reminded me of e.e. cummings’ A Poet’s Advice To Students, “To be nobody-but-yourself — in a world which is doing its best, night and day, to make you everybody else — means to fight the hardest battle which any human being can fight; and never stop fighting” (discovered at The Marginalian).
Businesses and people face constant pressure to conform. The best ones create their own paths.
(Marcus Buckingham and Ashley Goodall’s Nine Lies About Work is a fantastic myth-busting guide about how to lead businesses. You can read my synopsis here).
Collins notes that his fellow professors were baffled by his red flag system.
One commented that he could never relinquish that amount of control. Collins observes, “What he and others missed was a great paradox: by giving up control and decreasing predictability, you increase the probability of attaining extraordinary results”.
That’s a dream worth having – a world has the freedom for people to be themselves.
If you lead a business, or a team, or a home you can create that world each and every day.
All the best
Karl
