Strategy in a Time of Explosive Change

By Pascal Dennis (bio)

May you live in interesting times – Chinese Curse

Interesting times indeed, no? The reasons are too long to recite here – changing technology, customer expectations, internationalization, rapid cultural shifts, the explosion of information…

Technological change, for example, is so rapid and severe that in many industries we can no longer confidently define value.

The ‘Eight Essential’ technologies – Augmented Reality, Virtual Reality, AI, Blockchain, Robotics, Drones, Internet of Things, and 3-D Printing have exploded the ‘design space’.

Only by developing deep empathy with our customers & their customer journeys can we begin to understand what’s important to them. And even then, value is a moving target.

So it goes…

How to manage one’s business (and one’s life) in such times?

Let’s focus on the most important things first: How do we develop and deploy strategy in ‘interesting’ times?

Quick & ‘Easy’ Strategy

Keep it simple – if you can’t tell the story with one-page, do you understand it?

Accept that when it comes to strategy, perfection is impossible - and not even desirable! Remember, there is no right answer in strategy – only a right process!

Ensure, therefore, that purpose & logic are clear so that when you inevitably ‘pivot’, you’ll know what parts of your hypothesis were sound or not, and why.

Choose!

Strategy is not about deciding what’s important. All the ideas your team proposes are likely ‘important’. But you can’t do them all – you have to choose.

Too often, leaders try to hedge their bets by choosing too much, with predictable results. Choose the critical few, check frequently, and be prepared to pivot.

Please don’t misunderstand the great Henry Mintzberg’s ‘emergent’ strategies concept. Just because you’re prepared to pivot, doesn’t mean you needn’t articulate a hypothesis!

Failing to do so, of course, condemns you to the limbo of endless reaction & limited learning.

Avoid Boring Strategy Docs

The typical corporate strategy comprises a ‘Mission’, ‘Initiatives’, and in effect, a ‘Budget with Prose’. (Tip of the hat to another great, Dr. Roger Martin, for this.)

These are deadly dull and have a soporific effect on your team. ZZZZZZZZZZZZ…..

Keep your strategy to one page, tell your story, and answer the Big Questions as simply and clearly as you can:

1. Who are we and what do we believe in?
2. Where are we going?
3. How do we get there? (What’s our underlying logic?)
4. What’s preventing us?
5. What capabilities do we need to develop?
6. What management systems do we need to develop?

These are difficult questions, of course, which require deep experience and reflection. To develop a good strategy we need to bounce between the worlds of action and thought.

As the saying goes, get out of the building.

And finally, even though we live in times of explosive change, remember that some things are eternal.

Reflection, experience and the intuition gained thereby are innately human, and unlikely to be replaced by technology.

More likely, in my view, technology will enable the strategist, just as a horse enables the rider.

But that’s the topic of another blog.

Here’s to interesting strategic journeys.

Best regards,

Pascal



In case you missed our last few blogs... please feel free to have another look…

The Function of Leaders is to Produce More Leaders
Complexity is a Crude State, Simplicity Marks the End of a Process of Refinement
Can Lean & Agile Help to Fix Our Courts? Part 4
Can Lean & Agile Help to Fix Our Courts? Part 3

Singapore FinTech Festival & the Shape of Things to Come

By Pascal Dennis (bio)

Just back from a splendid week in hot, sticky & smart Singapore and the FinTech Festival.

Despite the jet lag, I thought I’d send out a quick note, with more to follow (when I’m vertical again.)

I took in as many Innovation Labs as I could, talked to umpteen start-ups and met splendid developers. I saw the Eight Essential Technologies* in action & gained some sense of what’s here and what’s coming.

The Festival was focused on banking and insurance, but it’s clear that “analogue” industries will be changed at least as much as “digital” industries. (The line between them has been erased, no?)

Consider the TUAS expansion project, which will triple Port of Singapore’s size – (it’s already one of the world’s biggest and best.)

The new port will be a ‘Smart’ port, with digital technology, sensors, automated cranes, driverless vehicles, drones to inspect equipment, and a smart grid. The goal is seamless and efficient port clearance and a 50% cut in turnaround times – (already best in class).

Meanwhile, Maersk and other shipping companies are using Blockchain to create seamless and efficient flow of goods around the world. One focus area is Trade Finance.

The goal is to make a complex, wasteful, error-laden process involving multiple actors (buyer, seller, intermediaries, multiple banks, regulators and insurers) – virtually instantaneous.

FinTech’s effect on people will likely be even more profound.

Prime Minister Modi’s simple and powerful address summarized the effect to date India to date:

• One billion identity cards – which allow people to open bank accounts, and qualify for government services
• One billion new bank accounts – and all that implies (e.g. savings accounts, credit cards, micro-loans, insurance etc.)
• 200 million new micro-loans…

The numbers and implications are awe-inspiring: innumerable people in innumerable small villages across a vast sub-continent will have better lives.

Now they can get paid directly, securely grow their savings, qualify for small loans, insurance and healthcare.

Less waste and hassle; more dignity and choice.

Here’s a deep bow to all the fine people I’ve met. Looking forward to getting to know you all better! Bravo Singapore!

All for now,

Pascal

Toyota’s New Rivals & ‘ Life and Death Battle’

By Pascal Dennis (bio)

We are in a 'life & death battle' against our new rivals, Akio Toyoda

Mr. Toyoda is not talking about Volkswagen, GM or Audi…he means Google & Waymo, Uber, Lyft and the rest.

Ironic, no? After seven decades of unparalleled (analogue) excellence, the world’s greatest manufacturer is facing a mortal threat from digital companies

After developing & deploying of the legendary Toyota Production System (TPS) in facilities around the world, Toyota is finding it’s not enough.

TPS is necessary to be sure, as Elon Musk and Tesla are finding to their chagrin, but not sufficient. We have to deepen and extend the Toyota business system with digital methods.

A tough challenge for a proud, conservative company that historically has been slow to adopt digital technology.

For example, in the 1990’s at our old TMMC plant in Cambridge Ontario, providing computers to managers and group leaders was a big deal, which generated much soul-searching.

“Will we lose touch with what’s actually happening on the shop floor?”

Grudgingly, our old senseis relented, though they continued to write their A3s in pencil.

And when it came to strategy or problem solving, they taught us to never trust the computer screen, and always to go and see for ourselves. Were they wrong?

Of course not. TPS and the great old senseis who disseminated TPS have changed the world. (They certainly changed me.)

But in an age of explosive technological change, Value – the raison d’etre of TPS – is a much more elusive target than it was in the 1990’s. And we have to change to keep up with it.

It’s no longer enough to build a splendid car – you also have to stuff it with splendid computers, connect to an ecosystem of enablers, and perhaps make it drive (fly?) by itself.

Which means you have to keep innovating forever. In short, continuous improvement is necessary, but not sufficient.

Whenever we need to create something new in conditions of extreme uncertainty, we need a new set of arrows in our quiver: continuous innovation.

Not everywhere, let me hasten to add. Continuous innovation everywhere, a common cliché & conceit these days, is a practical absurdity.

For example, if you’re making kitchen towels in a factory in Utah, extruding plastic auto parts in Michigan, or piloting a container ship up through the Suez Canal to Rotterdam, your focus will be continuously improving.

Safety, Quality, Delivery and all the related metrics (cycle times, OEE, work-in-process, changeover times etc.)

Every organization needs a foundation of standards and stability. The digital tsunami does not obsolesce these core needs – it depends on them.

But if you’re a product/service leader in any of these industries, the entire customer experience is your chessboard, and the Eight Essential Technologies* must inform your moves and thinking.

Wherever we need to create something new in conditions of extreme uncertainty, we need to learn to iterate to value, i.e. innovate continuously.

Imagine team members and leaders at a world class muffler manufacturer who have spent a few decades refining their Single Minute Exchange of Die (SMED) processes!

Sorry, we’ll be making fewer and fewer mufflers from now on…

So it goes when you focus on methods, and not the thinking behind them. SMED is a countermeasure to a specific problem. If SMED all you know, then digital is a big problem.

But if you understand the thinking behind SMED, and TPS as a whole, with hard work & reflection you should be able to apply it to new problems.

Humility is also a great enabler. It’s healthy to accept that what we did in the past is irrelevant to most people. What have you done for us lately, is a severe, but in my view, fair test.

Indeed, it’s the very question facing Akio Toyoda and his splendid organization.

Good luck!

Pascal

Strategy in a Time of Explosive Change

By Pascal Dennis (bio)

May you live in interesting times – Chinese Curse

Interesting times indeed, no? The reasons are too long to recite here – changing technology, customer expectations, internationalization, rapid cultural shifts, the explosion of information…

Technological change, for example, is so rapid and severe that in many industries we can no longer confidently define value.

The ‘Eight Essential’ technologies – Augmented Reality, Virtual Reality, AI, Blockchain, Robotics, Drones, Internet of Things, and 3-D Printing have exploded the ‘design space’.

Only by developing deep empathy with our customers & their customer journeys can we begin to understand what’s important to them. And even then, value is a moving target.

So it goes…

How to manage one’s business (and one’s life) in such times?

Let’s focus on the most important things first: How do we develop and deploy strategy in ‘interesting’ times?

Quick & ‘Easy’ Strategy

Keep it simple – if you can’t tell the story with one-page, do you understand it?

Accept that when it comes to strategy, perfection is impossible - and not even desirable! Remember, there is no right answer in strategy – only a right process!

Ensure, therefore, that purpose & logic are clear so that when you inevitably ‘pivot’, you’ll know what parts of your hypothesis were sound or not, and why.

Choose!

Strategy is not about deciding what’s important. All the ideas your team proposes are likely ‘important’. But you can’t do them all – you have to choose.

Too often, leaders try to hedge their bets by choosing too much, with predictable results. Choose the critical few, check frequently, and be prepared to pivot.

Please don’t misunderstand the great Henry Mintzberg’s ‘emergent’ strategies concept. Just because you’re prepared to pivot, doesn’t mean you needn’t articulate a hypothesis!

Failing to do so, of course, condemns you to the limbo of endless reaction & limited learning.

Avoid Boring Strategy Docs

The typical corporate strategy comprises a ‘Mission’, ‘Initiatives’, and in effect, a ‘Budget with Prose’. (Tip of the hat to another great, Dr. Roger Martin, for this.)

These are deadly dull and have a soporific effect on your team. ZZZZZZZZZZZZ…..

Keep your strategy to one page, tell your story, and answer the Big Questions as simply and clearly as you can:

1. Who are we and what do we believe in?
2. Where are we going?
3. How do we get there? (What’s our underlying logic?)
4. What’s preventing us?
5. What capabilities do we need to develop?
6. What management systems do we need to develop?

These are difficult questions, of course, which require deep experience and reflection. To develop a good strategy we need to bounce between the worlds of action and thought.

As the saying goes, get out of the building.

And finally, even though we live in times of explosive change, remember that some things are eternal.

Reflection, experience and the intuition gained thereby are innately human, and unlikely to be replaced by technology.

More likely, in my view, technology will enable the strategist, just as a horse enables the rider.

But that’s the topic of another blog.

Here’s to interesting strategic journeys.

Best regards,

Pascal

Big Data – Caveat Emptor

By Pascal Dennis (bio)

Render to Caesar the things that are Caesar’s.

Let the buyer beware…

Don’t want to be misunderstood folks. Big Data is, in my view, one of the essential technologies.

Big Data, and its partner technology, Artificial Intelligence, Robotics, Augmented Reality, Drones, 3-D Printing, Internet of Things, and Blockchain are transforming our lives – mostly for the better.

But we need to know where each technology applies, and where it does not.

Aristotle defined two domains: the domain of things that cannot be otherwise, and that of things than can be otherwise.

The former comprises things like matter, physics and chemistry. Water is water and cannot be otherwise. It evaporates when heated and freezes when cooled.

You can predict how it will behave by applying the laws of science. Big Data works well here.

The latter domain, that of things than can be otherwise, comprises fickle things like economics, politics, fashion, public opinion, and behavior.

Big Data does not work so well here. (A deep bow here to the great Roger Martin, former dean of the University of Toronto’s business school.)

Can we expect Big Data to effectively answer questions of design, marketing, opinion and behavior? Can we outsource our thinking about strategy to Big Data?

These are all the purview of creativity, intuition, imagination – which are our forte.

Gary Kasparov, arguably the greatest chess player ever, emphasizes the importance of ‘fantasy’ in chess, arguably our greatest strategy game and business metaphor.

This is the same man who played the super-computer, Big Blue, to a draw, an encounter the New York Times likened to ‘Man vs Forklift’.

(Big Blue, let it emphasized, was programmed by the world’s top grandmasters, and rebooted before each game, so that Kasparov was, in effect, facing a new super-computer opponent.)

Render to Caesar the things that are Caesar’s – let’s use Big Data where it works best, and recognize its limitations.

For example, don’t expect Big Data analytics to give you the ‘super-nova” moment, the blinding strategic insight that illuminates the path forward.

In my view, the centaur concept provides the proper metaphor and way forward.

Like the half human-half horse of mythology, the intelligent human being working with, and guiding, well-designed AI, has the potential to blend the best of both worlds, machine and human.

I like the thought of my doctor working with AI and Big Data.

The next Kasparov or Kasparova may well have Big Data and AI riding shotgun.

Best regards,

Pascal

Four Hundred Thousand Views – Thanks, Folks

By Pascal Dennis (bio)

What if nobody reads the damned thing?
Pascal Dennis

A few weeks ago the Lean Pathways Blog team & I observed a milestone, a footprint in time: 400,000 views

We’re humbled and grateful. Thank you all for reading our humble & imperfect offerings. When we started in 2010, I didn’t know if you’d be interested.

But I felt it was important to do, in some small way, what kind Japanese senseis did for me when I was a young, thick engineer.

There is a right way of managing, of leading, of being. There are core standards of behavior, just as there are core technical standards in the great professions.

Leadership is informed and governed the Great Virtues, just as Chemical Engineering, the profession I was trained in, is informed and governed by the laws of chemistry, physics, mass transfer, heat transfer and the like.

Our blog seeks to highlight these core principles of leadership and management, which are the foundation of achievement, growth & fun.

These principles will become even more important as the Digital revolution accelerates. I coach more and more IT executives and they are hungry for a solid foundation.

You can’t reach for the stars unless you’re rooted in the earth. The great technologies of our day – Internet of Things, Drones, Artificial Intelligence, Augmented Reality, Virtual Reality, Blockchain, Robotics, 3-D printing and the like – will change the world. If we root them in the core principles of leadership, the change will be for the better.

So we’ll continue to blog, kibitz & reflect on Lean, Agile, Digital and the eternal verities.

Tip of the hat to the splendid LPI Blog team – Dianne Caton, our graphic artist, and Steve Macleod, our IT leader.

Thanks, Di and Steve, for all your fine work & support.

And thanks to you all for your interest, fine questions and feedback.

Here’s to eight more safe, happy and engaging years,

Pascal