Stratex Blockers – Where Are We Going?

 Who are we, and what do we believe in? Where are we going, and how will we get there? Such are the core questions of Purpose. How well we answer such questions – as people & organizations – determines clarity of Purpose – or lack thereof. So how do we answer them?

To define your Purpose is to look up toward a better future. Doing so is uplifting in that it pulls you out of your current quagmire and forces you to consider the entire chessboard, design space, or gestalt, if you will. Everything is connected and if you look closely enough, individual parts form meaningful patterns, which often are the key to strategy.

Who are we and what do we believe in?

Answering such questions requires an intuitive understanding of your history, formative experiences, victories & defeats, and their why & wherefore. A useful subordinate question is: Where do we come from? This is difficult for young companies and especially so for startups, which explains why such organizations often have dreadful, abusive cultures. Often the leaders of such companies cannot imagine anything different because there are no signs, no precedents. There is no Dave Hewlett or Bill Packard, no Charles Kimberly or John Clark history to guide them. And no sages to whisper, ‘What would Dave & Bill have done?’

I’ve been lucky enough to work for some years with a fine international Insurance & Wealth Management firm that has a deep connection to its 150-year history – a history of achievement, stability, and community service. The corridors leading the Board room display foundational images, and the portraits of senior leaders beginning with the founder. The message is unmistakable – This is where we come from, who we are and what we believe in. Needless to say, helping answer such questions is an essential element of my practice.

Where are we going and how do we get there?

Here are helpful subordinate questions, courtesy of Roger Martin: ‘Where will we play & how will we win?’ The first part of this entails defining what markets, what offerings, what part the of the value chain and such. The second part entails defining a compelling ‘winning logic’ that everybody from the C-suite to the front line understands and can explain.

The Stick Model of Value is a useful framework for telling your story. Will we win by creating more Value & thereby increasing the customer’s Willing to Pay? Or by continuously reducing our cost by engaging all team members in waste reduction, so that we sell more? Or permutations thereof?

A high-end recreational vehicle supplier I know has defined their winning logic as follows: ‘Speed – Cost – Innovation: 1) We’ll be faster at design & deployment than our low-cost offshore competitors by…, 2) We’ll reduce of cost of labor through Lean/OpEx methods to less than 20% of total cost so that it’s irrelevant, and 3) We’ll have the best Tech & innovation in our industry by…’

Result? On familiarizing himself with the books, the new CFO said to me, “This place is a cash machine.’  The company also has a rich sense of where they come from & a history of decency & fair play. As a result, people stay, get better & better at their work, and contribute. Win-win.

Last thing, can you outsource all this to AI?

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Stratex Fundamentals – What Drives Achievement?

What drives StratEx achievement & how do we sustain it? Do the StratEx lessons I learned as a young Toyota engineer & manager still apply?

 What's in it for them?

I grew up in the ‘90’s on a steady diet of the Toyota Production System (TPS). Our compass through almost continuous expansion was a business system called ‘Hoshin Kanri’ or Strategy Deployment, which I’ve written about it extensively. The past decade my practice has evolved toward ‘ambidexterity’ and fields like financial services, consumer goods & Tech. My hypothesis: those will prosper who can both protect the core business with OpEx and ignite new growth with Digital methods.

So, do the TPS methods & mindsets I learned as a young engineer & manager apply? Yes, provided you translate & adapt them for each industry. (Does anybody care about how we did it at Toyota?) With that prologue, let’s see if we can answer the questions posed above.

What Drives Stratex Achievement?

Whether your focus is protecting the core business with Lean/OpEx, or igniting new Growth with digital methods, our motive force is smart, capable people continually solving problems (aka ‘Total Involvement’). This is the ‘wind that fills the sails’ and it has two parts: a) good people, and b) good systems that let them work with minimum hassle.

‘Good People’ entails answering the following questions:

·       What qualities do we need in our team members? How do we hire for those qualities?

·       How do we develop their skills? (Subordinate questions: What are the needed skills, skills gaps, and with what methods do we close them?)

·       How do we reward them & recognize their achievements?

·       How do we sustain a physically & psychologically safe workplace?

·       How do we engage team members in continuous improvement and/or innovation work?

·       How do we motivate them to continually improve themselves and help us to improve & innovate?

Our People management system must answer these questions in simple, concrete terms.  For example, ‘engagement’ means doing things such as Quick & Easy Improvements, Root Cause Problem Solving, and Innovation Sprints that generate Value which the CFO recognizes.  Filling out surveys or attending Senior Leader talks, while helpful for info-gathering, is not engagement.

‘Good systems’ means daily team huddles around team boards, a standard operating rhythm & huddle process at each level. It means a senior leader Obeya (Big Room, Control Tower, Cockpit) wherein the senior team addresses the big questions in a frank robust & visual way: What Should Be Happening?  What is Actually Happening? What are We Doing About It?  For leaders, what you do it what you get.

‘Good systems’ also means identifying & addressing blockers that hinder total involvement. These typically include bureaucracy, too many meetings, corrosive mental models (e.g. rewarding ‘busyness’ vs effectiveness), and perverse incentives.

How Do We Sustain Team Member Involvement?

We have to answer a difficult question: ‘What’s in it for you?’

Leaders need to explain why team members should go the extra mile & try to improve the current condition.  Does an answer like, ‘Because you need a paycheck’, instill passion & commitment?

Each leader has to reflect & answer this question in a heartfelt way.  Here the response of a leader I’ve been privileged to work with: ‘We want to win and be the best in our industry. We want to have fun & make money, and do right by our customers, team members & community. We want to invest in you & give you growth opportunities so you can help us to be the best. You’re going to learn leading edge methods, and you’ll have a job with us for as long you want one.  Your job may change, because we intend to keep improving. In return, you have to help us to improve, you have to be open & curious & energetic, and you have to tell us if something is not working and help us fix it.”

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Stratex Fundamentals – Goal Setting

How do we set strategic targets? What does our trajectory typically look like? What drives it? Do the StratEx lessons I learned as a young Toyota engineer & manager still apply?

Aim for the fences, settle for a double off the wall...

I grew up in the ‘90’s on a steady diet of the Toyota Production System (TPS). Our compass through the churning waters of continuous expansion was a business system called ‘Hoshin Kanri’ or Strategy Deployment. I’ve experienced countless cycles now & have written about it extensively. The past decade my practice has evolved toward ‘ambidexterity’ and fields like financial services, consumer goods & Tech. My hypothesis: those will prosper who can both protect the core business with OpEx and ignite new growth with Digital methods. 

So, do the TPS methods & mindsets I learned as a young engineer & manager apply? Yes, provided you translate & adapt them for each industry.  A common failure mode: ‘Here’s how we did it at Toyota ABCD…’, to which the COO, CFO, CMO, CIO et al respond, quite reasonably, ‘Who cares…?’ With that prologue, let’s see if we can answer the questions posed above.

How Do We Set Strategic Targets?

Set targets just beyond what your team thinks they can achieve. How do you know what they think? By scheduling Daily/Weekly/Monthly management walks. Okay, maybe Daily is difficult for a senior executive to sustain, but you know what I mean. To set targets you must know your business & team, which means you have to be there. Thus, you can answer core leadership questions like:

·       What is the nature my team? What is the nature of our industry & competitive challenge?

·       What is the capability of each team member? What motivates (or demotivates) them? Under what conditions do they thrive (or struggle)?

·       How capability are our processes? What are common failure modes?

·       What robust is our hardware? (Machines, info systems, supply chain…)

·       What is the capability of our software – both information systems, and culture?

·       What are the strengths & weaknesses of our management system?

Setting targets this way often produces a trajectory like the one I’ve illustrated. We don’t quite achieve our targets, but year after year we get stronger & build our muscles. In a few years, we’re a tough, capable team.

Failure Modes

Setting modest, unimaginative targets is perhaps the most common failure mode. What can cause this? Poor incentive structures, a weak grasp of blockers, unclear & unreliable data because of cumbersome central systems and a lack of YODA (Your Own Data)

Setting outlandish targets absent any real understanding of the business, team & competitive challenge is also a common mistake.  This is akin to the general manager of a baseball team blithely ignoring the team’s weaknesses & competitive position, while demanding they win 150 games next season and sell out every game.

A third common error is not setting effective improvement process targets. Want people to get good at value-added problem-solving? Set explicit targets for each team & check on them regularly. Start with modest targets, e.g. ‘Each team will close one significant problem per quarter usually scientific problem solving. Recognize & reward high achieving teams, e.g. with a ‘Problem Solving Expo’ or ‘Fair’ wherein teams demonstrate what they’ve been working on & the value they’ve derived.

Next time, what drives Stratex achievement & how do we sustain it?

Best wishes & a splendid 2026,

Pascal Dennis         E: pascal.dennis@leansystems.org

 

Strategy – What’s Changed & What Hasn’t?

It’s best of times & the worst of times – and it was ever thus.  So, when it comes to Strategy deployment & execution, what has changed & what has not?

What Has Changed

AI has made it easier than ever to answer generic questions of Strategy:

·       Given our business situation, what is our aspiration & winning logic?

·       What OKRs should we use and how should we deploy them?

·       What should our dashboards look like?

·       How do we set up our Obeya (aka Control Tower, Big Room, Cockpit)?

AI also makes it much easier to answer Growth questions like:

·       What’s the size of this market, how fast is it growing and what are historical profit margins?

·       Who are the main competitors & what are their strengths & weaknesses?

·       Who are the key customers in this market, and what do they value?

·       What are current customer satisfaction levels & what opportunities might new entrants exploit?

And so, AI can help you begin to understand the nature of the challenge, and generic approaches you might use to handle it. To use chess analogy, AI can help you understand the basic shape of the board, how many pieces there typically are, and sometimes, how these pieces move.

That’s not nothing, and if we understand AI’s limitations, it’s a helpful start. But if we stop there, we’ll just release more AI-slop & create waste & hassle for our organization.

What Has Not Changed

Strategy deployment & execution remains a messy, ragged human thing, an affair of the heart and of intuition & gut feel gained by decades of work & thoughtful reflection. It’s not enough to articulate an AI-formulated-sort-of-maybe-just-okay winning logic. People can sense & seem to have an innate revulsion to AI slop.

Moreover, developing & deployment a sound strategy is akin the achieving physical fitness through a commitment to a sound workout regime. You have to do the work. If the workout regime calls for daily jogging but you decide to drive, you’ll remain flabby.  Similarly, if rather than walking the value stream and customer journey, doing the messy work of Catchball and all the rest, you default to AI, your strategy will blah-blah-blah.

Leaders at all levels have to validate the aspiration & winning logic with their teams through messy open forums I learned as ‘Catchball’ wherein the leader invites pushback & translation.  ‘Am I on the right track; is there anything I’m missing; can you please share this your teams & come back with what you can do to support this plan.’

Catchball is of course based on data, and ideally YODA – your own data & not stale, incomplete, irrelevant data provided by some out of touch corporate system. Without YODA strategy execution can quickly degenerate into HIPPO (highest paid person’s opinion) & ZEBRA (zero expertise but really adamant) management.

The Value of our strategy (or of any initiative) is a function of the Quality of the intervention and the level of Acceptance: V = Q x A. People dislike AI slop & they don’t respect phony strategies or phony people. And brings us to something else that has not changed: the mysterious catalyst/accelerant called Leadership.

In the Age of AI, Leadership is the Killer App

Leadership is the killer app. Good leaders articulate high quality strategies because they have a deep, intuitive grasp of the industry, value stream, technology, customers and their journeys. Good leaders foster acceptance of the agreed upon aspiration and winning logic because they walk the value stream and the customer journey. They ask, ‘What do you think?’ in a spirit of humble inquiry

In summary, when it comes to Strategy deployment & execution, what’s changed is AI, and what has no changed is the messy, human work of alignment, and the centrality of Leadership. AI can be a fine servant but is a poor master.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org