Driving a High Impact Value Focus

Episode #340 Driving a High Impact Value Focus

GETTING TO THE HEART OF VALUE

I recently got a message from an old colleague of mine, Mina Calvert. She reminded me of a simple mantra I used to use to get my team focused on the core value drivers of the team.

For context, I was CIO of an insurance company, and we were undertaking a large system redevelopment program. It had all the usual distractions: scope creep; communication breakdowns; unreasonable sponsors… you name it.

Every day, there were countless opportunities to get distracted, which would potentially compromise our ability to deliver on the main game—the systems we were developing would become the foundation of the company’s future competitive advantage.

So, what was this mantra?

Whenever someone came up with a bright idea that would add a task to the work program, I’d just quietly bring the focus back to the core objective by asking a simple question: “Will it make the boat go faster?”

Of course that expression’s not original (clearly, I’m no sailor), and I’ll take you through the origins of the phrase shortly. But the sentiment is clear: will doing this thing take us closer to our singular, compelling goal?

In this newsletter, I give you some practical techniques that you can use to immediately sharpen your team’s focus on the things that truly matter: how do you achieve a high-impact value focus?

I begin by explaining what a simple, compelling goal looks like; I then go on to explore some of the reasons why “simple” is definitely not the same as “easy”; I look at why it’s so hard to get a value focus in business; and I finish with the two practical tips to drive a high-impact value focus.

WILL IT MAKE THE BOAT GO FASTER?

In case you haven’t heard of it, the America’s Cup is an international sailing competition, which is contested every three years or so. The New York Yacht Club won the inaugural cup in 1851 and held the title for—wait for it—132 years! It was one of the longest winning streaks in the history of any sport…

That is, until Australia broke that streak by winning the America’s Cup in Newport, Rhode Island in 1983. It wasn’t without its controversy: the Australian boat employed some innovative design features, most notably, its winged keel.

I turned 21 that year, and I remember staying up until the wee hours of the morning, and drinking 1,000 beers as I watched the live telecast of the deciding race. The USA had led Australia 3-1 in the best-of-seven final series. In a stunning reversal of fortunes, Australia won the last three races back-to-back to snatch the America’s Cup 4-3.

National pride was at an all-time high. The boxing kangaroo flag was unfurled… The Men at Work song, “Land Down Under”, was heard everywhere you went, in both Australia and the US. And our then-Prime Minister, Bob Hawke, famously said during the celebrations, “I tell you what, any boss who sacks anyone for not turning up today is a bum!“

It doesn’t get much more Aussie than that, right?

Having broken the drought, the US reclaimed the trophy in 1987, but since then, the America’s Cup’s been won by several other countries.

In 1995, the New Zealand boat, Black Magic, skippered by Peter Blake, was the final contender for the America’s Cup, and the story of the Kiwi team’s preparation became legendary. They knew that to win against an American team with a huge financial backing advantage, they had to have a laser-like focus on the things that really made a difference.

In a sporting competition like this, the scoreboard is the final arbiter. Unforgiving? Sure—but it delivers the ultimate assessment of your performance.

During their preparation, the New Zealand team introduced a mantra that guided their every decision: “Will it make the boat go faster?”

That’s it…

They knew that, all things being equal, the fastest boat would win. Whether it was saving the tiniest fractions of weight in each piece of equipment on the boat… or whether it was improving the power-to-weight ratio of each sailor… every investment of time, money, and energy was governed by that single question.

It cut through to the one thing that represented true value. The speed of the boat was the only lens they looked through. Every decision, every waking moment, that was their focus. Is it any wonder that they won the 1995 America’s Cup and successfully defended it again in 2000?

IT’S SIMPLE… BUT IT’S NOT EASY

The origins of that story may be disputed. Many people attribute it to the British men’s rowing eight, which won the gold medal at the Sydney Olympics in 2000. A member of the British crew, Ben Hunt-Davis, capitalized on the story with a book and a consulting business, both named—you guessed it—Will it Make the Boat Go Faster?

Whatever its origins, it’s a great story, and a pointed reminder for us on how to focus on the things that truly matter.

In that environment, despite incredibly intense, elite-level competition, it’s relatively simple to implement a concept like that. At its most fundamental level, it’s just your team against the clock, competing against other teams with an identical objective – to cross the finish line first.

It’s easy to see how applicable that is to elite sport. It can be brought back to one simple, compelling objective, and because of its simplicity:

• The team can align firmly around that one goal;
• Progress is relatively easy to measure; and
• Success is evident in the final outcome.

But even in this context, it’s really hard to keep your eye on the ball. Otherwise, everyone would be doing it.

Just consider for a moment the types of decisions that would have faced the investors, the support team, the captain, and the crew of the Black Magic:

• “Should we designate an extra gym session for the crew on Tuesdays and Fridays?”
  • I don’t know… will it make the boat go faster?
• “Should we get a dietician in to help the crew with their nutrition and improve their stamina?”
  • I don’t know… will it make the boat go faster?
• “Should we replace the sails with a newer type of fabric that weighs a fraction less, at the risk of being slightly less durable?”
  • I don’t know… will it make the boat go faster?
• “Should we send our navigator on a five-day course in Majorca to improve his ability to read wind patterns?”
  • I don’t know… will it make the boat go faster?
• “Should we invest in a computer-aided design capability to improve the efficiency of the hull design?”
  • I don’t know… will it make the boat go faster?

You can see that, even answering these questions isn’t always obvious, despite the simplicity and clarity of that single, compelling objective.

Value isn’t absolute. It’s not binary. It’s never “yes” or “no”. It’s never black or white. There’s always some level of judgment to make as to whether there is sufficient value to warrant investing in something.

Your skill and judgment have to come into play all the time if you want to manage these nuances. Do you truly understand the value at stake? Can you form a clear line of sight to the delivery of that value? And can you get the people you lead to see it the same way you do?

BUSINESSES ARE MORE COMPLEX

The boat mantra is just a simple statement of value. What represents value to us, in our context? One and only one thing: a faster boat.

But even with this single, compelling objective, I’m sure there was heated debate as to whether or not something passed that litmus test. For example:

• There might be broad agreement about optimizing the equipment on the boat–it has a direct line of sight to value.
• There might also be unanimous support for the computer-modeling of hull designs–that has a direct line of sight to value.
• But how about spending money on a team dietician? Would that make the boat go faster? Maybe… maybe not…  I don’t know. The line of sight to value is much less direct.

So, even though everyone might agree that it was a good thing to do, it might not be sufficient to justify the investment, in light of the other things that warrant your time, money, and focus.

Businesses are generally way more complex than this. In the vast majority of cases:

• The strategy isn’t well articulated and understood right throughout the company;
• There are multiple measures of success, some of which conflict with each other;
• Planning processes are clunky, with multiple divisions building their work programs in isolation from the rest of the business;
• Different executives sign up to different KPIs;
• Objectives are difficult to isolate; and
• Progress is hard to measure.

Even though people do their best, ultimately they’re just going to fall back into familiar habits.

WHAT’S YOUR TEAM’S ‘VALUE DELIVERY RATING’?

There are two key factors that determine what I call the value delivery rating of your team:

1. Are you working on the right things? And
2. How productive are you in delivering them?

Your value delivery rating is the product of these two factors. Working on the right things is a measure of effectiveness, and productive deployment of resources is a measure of efficiency.

Let’s face it, you could never be 100% effective or 100% efficient. But it’s kind of useful to understand the gap between that notional 100% value delivery rating and where you are today.

This gap, my friends, is what we call upside—it represents opportunity, and there’s always upside to go after if you want to improve your team’s performance. Always.

I find that, even just having a rough idea of your team’s value delivery rating helps you to conceptualize how well you’re performing, both individually and collectively. If the team’s working really well, achieving goals, and stretching themselves they could be as much as, say, 90% productive, which would be a sensational efficiency score.

But if they’re not working on the most valuable things, they may only be 40% effective. What a waste! That’s the very definition of spinning your wheels. It’s activity, not value.

If we multiply this out (90% productivity x 40% effectiveness), the value delivery rating would be a rather miserable 36%. And that’s even with an incredibly efficient, driven, and motivated team.

Improving on 90% productivity would be really hard—so that’s certainly not where I would dedicate my efforts.

But what if you could get a better focus on value, and move the effectiveness measure from 40% to, say, 70%? That would massively increase the team’s value delivery rating. 90% productivity x 70% effectiveness would lift the team to a value delivery rating of 63%. That’s a 75% improvement in the overall value delivery rating.

This is why, as a leader, working to improve the line of sight to value should occupy a significant percentage of every working day. Can you see a direct link to value? Will it make the boat go faster?

TWO THINGS YOU CAN DO TO TURN THE TIDE

What can you do—right now—to improve your team’s value delivery rating? Well, of course, the day-to-day leadership interactions with your people (one-on-ones, team performance reviews etc.) will improve team efficiency. But to improve effectiveness, you have to get to the heart of value.

I’m a simple man, so I like to identify the most straightforward, direct, and powerful interventions. There are two very simple things that you can get into the habit of doing, and easily incorporate into your daily routine. If you can manage to do this, it will massively increase your chances of moving the team’s effectiveness rating closer to that notional 100%, regardless of where it is now:

1. Ask the question, “When and where will I see the value from this?” This has to be a relentless focus. At first, your people probably won’t be able to answer the question easily. They won’t be used to clearly specifying the value that will eventually be captured… they may think you’re being unreasonable… they may think you don’t understand what they do (I used to get that a lot)… they may think it’s just a waste of time… but that doesn’t matter. Keep on it. Your people will get used to it over time, and eventually, they’ll start to think that way themselves. With any investment of resources – people, money, time, or assets – you’ve got to be able to trace a line from the investment that you’re making into the value that’s eventually captured.
2. Be fearless in stopping things when your people can’t give you the right answer. This is one of the few areas where you really shouldn’t give your people the benefit of the doubt. If they can’t describe exactly where and when the value’s going to land… if they can’t tell you what changes as a result of the investment of resources you’re being asked to make… then it simply shouldn’t be happening.

Of course, with both of these changes you’ll need to exercise a little judgment. Sometimes, particularly at the start, your people won’t be able to give you a satisfactory answer: but just because they can’t articulate the value doesn’t necessarily mean the value doesn’t exist. Using your own experience and your own understanding of value, you’ll eventually be able to coach your people to a place where they can articulate value as effectively as you can.

No matter what size of business you work in; no matter what level you’re at in the company; no matter how many people you lead; getting a direct line of sight to value should dominate your thinking. As a leader, you need to be absolutely relentless in your pursuit of value.

So, make it as simple as you can. Focus on value, almost to the point of dysfunction, and condition your people to the reality of the situation: if it doesn’t make the boat go faster, it’s just not happening.