A Framework of Effective Tools
What are the tools we would use to address the situation described earlier in this chapter? Through our experiences and sharing stories, we found that a collection of tools apply to how organizations approach their work, especially work that involves change and innovation; when used in moderation and in conjunction with each other, these tools can have a dramatic impact on the success of the organization. We drew the "napkin drawing" shown in Figure 1.1 to capture our thoughts, and we chose to organize this book around four main applications of those tools.
Figure 1.1 Leadership tools for use in today's complex marketplace
The Purpose Alignment Model, described in Chapter 2, generates immediately usable decision filters that leaders and teams can use to improve design. This tool evaluates business activities and options in terms of their capability to differentiate an organization's products and services in the marketplace and their mission criticality. This tool helps teams identify areas to focus their creativity and those activities and features for which "good enough" is good enough. This approach lowers direct and opportunity costs and accelerates market leadership. This simple, yet powerful, concept recognizes that not all activities should be treated in the same way. Some activities will help the organization win in the marketplace; others will help keep it in the game. We risk under- and over-investing in activities if we treat all of them as if they were identical.
Here are the big ideas of Chapter 2:
- Aligning on process purpose is a smart, simple way to improve decision making.
- Designing our work around process purpose helps us quickly identify how to achieve optimal business value.
- Strategic decision filters can be cascaded throughout the organization to dramatically improve organizational alignment.
As the proverb states, "No one of us is as smart as all of us." The proper use of the tools described in this book is dependent on a culture of collaboration. In the story presented earlier in this chapter, when a single person developed a product, it took more than two years to produce something that did not work. When a leader considered purpose, business value, uncertainty, and complexity in a culture of collaboration, the team made better decisions and started to generate results. Developing collaboration skills and capabilities is essential in today's dynamic marketplace. Sustainable innovation comes through collaboration. Sustainable innovation is a prerequisite to change from market follower to market leader. Today, it hinges on collaboration.
Here are the big ideas of Chapter 3:
- To develop a sustainable competitive advantage, unleash the talent in your organization to deliver innovative ideas to the marketplace and to improve the throughput and productivity in your organizations.
- The answers are in your organization.
Delivery is the ultimate measure of success. Any experienced leader knows that all projects are not created equal and no single approach is applicable to every project. The tool described in Chapter 4 provides a practical model for evaluating uncertainty and complexity as well as guidance for tailoring an appropriate leadership approach. The characterization of uncertainty and complexity also correlates to project risk, and we provide a roadmap for potentially reducing risk. For example, it is possible to break projects that are both highly complex and uncertain into components with lower uncertainty and risk. This process reduces the overall project risk. An understanding of complexity and risk also allows leadership to match the skills of project leaders to the needs of the project.
Here are the big ideas of Chapter 4:
- By understanding the uncertainty and complexity characteristics of your projects, you can identify better ways to lead those projects.
- High complexity or uncertainty correlates to higher risk. Reduce these factors, and you reduce your level of risk. Project decomposition can reduce complexity, while incremental delivery helps lead a project through uncertainty.
- Some leaders are natural managers of complexity, while others are experts at uncertainty. Match leadership styles to project characteristics, and develop leaders' skills to broaden their capabilities.
The tools we describe in this book will help you to make the key decisions you face on a regular basis, but we felt it important to discuss the actual approach to decision making. Knowing when to make your decisions and which information you need to make those decisions is very important. Chapter 5 introduces the value model tool, which provides a structure for organizing information—such as purpose, considerations, costs, and benefits—that you can use to aid your decision making.
Here are the big ideas of Chapter 5:
- Business decisions focus on delivering value to the organization and to the marketplace. Life is much better if everyone in the organization understands what generates value and makes decisions that improve value.
- You can develop a value model that helps you make better decisions, but this model is not just a calculation that generates a numerical value. Instead, it is a conversation that you should revisit often, especially when conditions change.
The Leadership Tipping Point
While we describe each tool on its own and provide plenty of examples of when those tools are useful, we knew this treatment would not be complete without describing how you can put our tools to work as a leader, addressing the issues of how and when to step back and how and when to step up without rescuing your teams. This is the big idea of Chapter 6, which we call the leadership "tipping point."
Leaders can stifle progress when they interfere with team processes. At the same time, as a leader, you don't want to go over the cliff and deliver the wrong results. Sometimes leaders should stand back and let the team work—and sometimes leaders should step up and lead. In Chapter 6, we discuss how you can decide which situation you face.