#215: Scaling Up, Embracing Complexity and Five Years of Coaching

Dear friends

I launched my coaching practice five years ago. This week, with a measure of curiosity, I asked ChatGPT to summarise my clients reviews of our work.

I did this because, like most of us, I am a little uncomfortable getting to grips with what I do well – even though I know it is the prerequisite to creating excellence. This was an easy shortcut – it was not me telling me what I do well, it was a large-language model’s summation of my clients’ reflections.

It identifies 8 areas of strength, which you can read here. Please comment. I’d love to know what you think of it.

/ strategy
Today’s letter is one of two exploring Verne Harnish’s Scaling Up: How a Few Companies Make It…and Why the Rest Don’t.

Scaling Up is a wonderful guide to taking sustained actions to transform our businesses. We often know what should and could be done. We struggle with how to build the organisational habits which are essential to sustained excellence.

I briefly introduced you to Harnish’s work on driving strategy and execution through effective meeting rhythms in this letter. Today we focus on his core principles.  

At first principles, he exhorts us to differentiate between strategic thinking and execution planning and to remember our companies are “living organisms that need to survive in an environment that’s always changing”.

We often conflate strategic thinking and execution planning.

Quite often, we set the broad frame of the strategy, but fail to detail the execution planning resulting in easily predicted head-scratching at the next strategy review when milestones are missed. Unsurprising when we didn’t take the time to plan how execution will happen. Both are essential.

Scaling Up identifies ten habits to create success, including ensuring:

1. The executive team is healthy and aligned.
2. Everyone is aligned with the #1 thing that needs to be accomplished this quarter to move the company forward.
3. A communication rhythm is established and information moves through organization accurately and quickly.
4. Employee input is collected to identify obstacles and opportunities.

Each habit is support by four clear actions.

Harnish reflects pragmatism steeped in deep experience. Transforming organisations is not a ‘first 100 days’ or ‘by the next Board meeting’.

He cautions, “You’ll drive everyone in the organization crazy if you implement all these habits at one time. The key is focusing on one or two each quarter, giving everyone roughly 24 to 36 months to install these simple, yet powerful, routines. Then it’s a process of continually refreshing them as the company scales up”.

(You can download the complete checklist here).  

We get distracted by the busyness of business life. Scaling Up reminds us of the core levers.

“There are three main Processes that drive any business: Make/Buy, Sell, and Recordkeeping” and “There are 4 Decisions that leaders must address: People, Strategy, Execution, and Cash”.

“You have execution issues if three things exist:

1. There is needless drama in the organization (e.g., something shipped out late; the invoice was wrong; someone missed a meeting; etc.).
2. Everyone seems to be working more hours, spinning their wheels, or spending too much time fixing things that should have been done right the first time.
3. The Company is generating less than three times industry average profitability”.

Read the above again and build your own action list.

For example, how much time are you spending on people, strategy, execution, and cash? Do you have strategies for each?

Does your organisation have high levels of drama? When last did you engage employees to identify obstacles and opportunities? Etcetera.

// self
Harnish notes “Success belongs to those who have these two attributes: An insatiable desire to learn and an unquenchable bias for action”.

Action is essential. It is how we change our worlds, but it can only be truly powerful if we pause to reflect and learn from it.

Uninformed action is wasteful. Learning guides our actions and widens the possibilities available to us. Simply, the more we learn, the more options we have. Harnish says it simply, “Leaders are readers”.

He packs Scaling Up with suggestions of great books and articles – Uncommon Service: How to Win by Putting Customers at the Core of Your Business, The Five Dysfunctions of a Team, and How Fast Can Your Company Afford to Grow? are just a few of the many gifts he gives us.  

/// soul
Last week, I told you the NYT article Cormac McCarthy Did Not Talk Craft, With One Surprising Exception prompted me to go McCarthy mining.

As it turns out, I got it all wrong. Or perhaps, right. I started with Stella Maris, not knowing it was McCarthy’s last novel – published in 2022, at age 89, in case you are approaching that age that HR departments call retirement, and you think you’re done. Nor did, I know that it was the second half of a pair, its predecessor, being The Passenger.

Ignorance, bliss and all that, meant I immersed myself in this mind-bending novel, and not knowing I was lost, I was content in my confusion.

It is all dialogue, a conversation between a psychiatrist and his twenty-year-old patient, a mathematician who carrying various diagnoses which she views as inadequate, birthed by our limited understanding of reality.

It’s an exploration of the world’s foundations and how we understand them.

She asks when we assign questions to our unconscious to answer them, where does the answer come from and, if from us, why didn’t we know it in the first place? And, if not from us, then where and again why not just receive an answer? Why such a mysterious process?

Musing about music, she says, “Music is made out of nothing but some fairly simple rules. Yet it’s true that no one made them up. The rules. The notes themselves amount to almost nothing. But why some particular arrangement should have such a profound effect on our emotions is a mystery beyond all comprehension”.

She has a dream in which children are crying. She wonders why they do. Her therapist observes that babies cry when they’re wet or hungry. She responds, “I thought there had to be more to it. Animals might whimper if they’re hungry or cold. But they don’t start screaming. It’s a bad idea. The more noise you make the more likely you are to be eaten. If you’ve no way to escape you keep silent. If birds couldn’t fly they wouldn’t sing. When you’re defenceless you keep your opinions to yourself”. Later, she observes “rage is only for what you can believe can be fixed. All the rest is grief”.

The world’s complexity has a mysterious majesty. We are better off when we pay attention to it.

Best wishes

Karl

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