Why transformation efforts fail, The Edison Ratio & Seven actions for challenging economic times
26 June 2022 Newsletter
Hope you’re Thriving!
It’s been an exciting week, and for the first time in a year and the second time in more than two years, I flew in a plane! That might not seem so remarkable, but for context, I used to fly twice a month. The trip was to Sydney for a two-day strategic planning workshop with a team, although, at the last two workshops that I ran in the past week, both of which team members flew in for, one of the team members had COVID and spread it to the rest of the team. Interesting times!
Why transformation efforts fail
In Sydney, we had been working on executing a strategy for a couple of years, but the ‘hard things’ weren’t getting done, or at least, not getting done fast enough. It’s a competent team, but they were getting distracted with business as usual, and as you’d imagine, that was pretty frustrating for both me and them! So, in preparation for our workshop, I had them read an article from HBR that outlines why transformation efforts fail.
From the article:
“The most general lesson to be learned from the more successful cases is that the change process goes through a series of phases that, in total, usually require a considerable length of time. Skipping steps creates only the illusion of speed and never produces a satisfying result. A second very general lesson is that critical mistakes in any of the phases can have a devastating impact, slowing momentum and negating hard-won gains. Perhaps because we have relatively little experience in renewing organizations, even very capable people often make at least one big error.”
The author then goes on to list the seven errors that leaders make:
Error #1: Not establishing a great enough sense of urgency
Error # 2: Not creating a powerful enough guiding coalition
Error # 3: Lacking a vision
Error # 4: Under communicating vision by a factor of ten
Error # 5: Not removing obstacles to the new vision
Error # 6: Not systematically planning for and creating short-term wins
Error # 7: Declaring victory too soon
Error # 8: Not anchoring changes in the corporation’s culture
Read the article here: Leading Change: Why Transformation Efforts Fail
The Edison Ratio
The Sydney leadership team I mentioned above is brilliant at executing, but they needed to recognise why their efforts weren’t achieving the desired results. They were executing many things, but often just not the most important things. In an article I read this week, the problem of not executing ideas well was discussed brilliantly.
From the article:
“Genius, opined Thomas Edison, who had firsthand knowledge of the subject, consists of 1% inspiration and 99% perspiration. Call it the “Edison Ratio.” While one might haggle over the exact numbers, the Edison Ratio provides a useful benchmark for what it takes to make an inspired idea real. And it cuts straight to a key reason organizations often fail at innovation: They overemphasize innovation’s need for new ideas while remaining oblivious to — or eternally optimistic about — the volume of work necessary to execute each and every one of them.”
The article then discusses Edison Ratio inversions, where leaders are all about the idea, not the execution, and then how that leads to innovation paralysis.
Here’s another short excerpt from the article:
“An example: Imagine someone has a brilliant idea as they’re brewing coffee in preparation for starting off their workday. They spend, oh, I dunno … let’s say they spend the morning fleshing it out before Zooming a likely victim to work on it.
Do the math: 4 hours to have the idea equals 1% of the total effort. That means making it real will require … hmmm … carry the 1 … 396 hours. That’s about 10 weeks to implement the brilliant idea.”
What’s interesting about that? Quarterly planning works in 13-week iterations, and the ideas decided on at a quarterly planning meeting are the 1% in the Edison rule. The 99% perspiration is the 13 weeks of execution in between.
The article is aimed at IT leaders, but I found it really good.
Revert to the mean
What do you mean things always revert to the mean?
These two charts, while looking similar in shape, do not correlate. Apart from the fact that in both cases, things will, or are reverting to the mean.
The first chart maps interest rates for 16 countries over 150 years. With all the current worries about interest rates, they are only reverting to their long-term average.
The second chart is an economic principle of valuation against time. Now that could be stocks, cryptocurrency or even tulips. But, most things revert to the mean. And to ride the cycles of the economy, businesses must endure.
This means a unique strategy, the right people, effective execution and enough cash to weather the storms.
Your chance of catching COVID in the office depends on a few key decisions by your boss
Considering the large numbers of people I’m seeing in Australia who are getting COVID and taking time off work, thereby affecting productivity, I found the following article interesting.
It outlines a few ideas employers can do to reduce the chance of COVID spreading in the office. These ideas include:
CO2 monitors to measure air movement
Small portable air filters
Rostering and hybrid work
Read the article here: Your chance of catching COVID in the office depends on a few key decisions by your boss
New group program
In August, we’re launching another group program for businesses with $2m to $10m revenue. We help you build a leadership team, develop your first one-page plan, and then create a strategy to help you scale.
Then, each month and each quarter, we help you implement it through monthly coaching and quarterly workshops. The results we’ve had with this program are fantastic, so if you’re interested, reply to this email as spots are limited.
This week on The Growth Whisperers podcast
Seven actions for challenging economic times
What actions should you take to prepare for challenging economic times? It’s been said that God invented Economists to make Astrologists look good. No one knows what will happen in the economy, but at the moment there are a number of signals that indicate challenging economic times might be ahead.
We discuss 7 actions you can take now to prepare for challenging economic times.
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