Finding Your Team's Superpower: The ONE thing that matters most

Episode #325 Finding Your Team's Superpower: The ONE thing that matters most

YOUR SUPERPOWER LIVES IN SIMPLICITY

I’m sure you’ve heard me talk frequently about value creation. As a leader, your primary objective, above all else, is to deliver value. How you do that depends on your context.

One of the key principles that enables this razor-sharp fixation on value is simplicity and focus. Simplifying your company’s objectives, its work program, and its customer value proposition is a complex and difficult process – but if you can get it right, it opens the door to greatness.

In this newsletter, I lay out a few examples from the overwhelming body of knowledge that supports the principle of simplicity and focus. How can you use it to discover and develop your superpower… the one thing that matters most?

I begin with a look at some of the most interesting published work on how to use simplicity and focus to maximize strategic value. I give you a real world example of a company that I worked for that had its superpower absolutely nailed. And I finish with some tips for evaluating where your own team is right now, so that you can identify and develop its unique superpower.

GETTING RID OF THE CLUTTER UNMASKS YOUR SUPERPOWER

I’ve lived by the mantra of simplicity and focus for decades. I reference it frequently and I’ve dedicated a few podcast episodes to this topic previously, like Ep.222: The Power of Simplicity. Simplicity is critical in unlocking value. Complexity, waste and rework are its enemies.

You can find any number of quotes from life’s diverse endeavors that speak to the importance of simplicity:

• The artist Hans Hofmann gave us the quote, “The ability to simplify means to eliminate the unnecessary so that the necessary may speak.“
• The composer Chopin said, “Simplicity is the final achievement. After one has played a vast quantity of notes and more notes, it is simplicity that emerges as the crowning reward of art.“
• Oliver Wendell Holmes said, “For the simplicity that lies this side of complexity, I would not give a fig. But for the simplicity that lies on the other side of complexity, I would give my life.“
• And of course, in business strategy, Michael Porter gave us the quote, “The essence of strategy is choosing what not to do.“

Although the principle may seem obvious, very few organizations embrace it fully. We all try to do too much (with all the best intentions, of course). Why is this so hard when there’s such a huge body of knowledge on the benefits of simplicity and focus?

The 4 Disciplines of Execution, or 4DX for short, was co-authored by Sean Covey. Sean is the son of the great Stephen R. Covey, who wrote The 7 Habits of Highly Effective People. 4DX proposes the idea of the wildly important goals. It exhorts leaders to take a minimalist approach to allocating resources, paving the way for people to focus on the highest value tasks and not get distracted by the things that don’t generate value.

In his seminal work, Good to Great, Jim Collins proposes the Hedgehog principle. This is taken from an essay by Isaiah Berlin and it’s based on the concept that: the fox knows many things, but the hedgehog knows just one big thing. When it’s threatened, it curls up into a spiky ball to defend itself.

In business terms, Jim Collins’ Hedgehog principle proposes that going from good to great requires that companies have a profound understanding of three things:

1. What are you deeply passionate about?
2. What can you (and, of course, what can’t you) be the best in the world at? And
3. What drives your economic engine?

Collins says that, preferably, this can be boiled down to a simple measure of “Profit per X”.

Then there’s Ikigai – an ancient Japanese philosophy that translates roughly as life value.

As you might expect, the rather more spiritual intent of ikigai has been adapted for the cutthroat world of competitive business. The Westernized version encourages you to look at four dimensions of your business and career to unlock your potential uniqueness:

1. What do you love?
2. What are you good at?
3. What does the world need? and
4. What can you be paid for?

These are just a few of the works that mount the case for doing less “stuff”, and focusing on the things that make the most difference to the long-term value of your business.

When we think about superpowers, there’s no way we can even know where to start without first passing through the eye of the needle on simplicity and focus. How do we refine what we already know in order to unlock unique value?

WHAT THE WORLD’S TOP CONSULTANTS SAY ABOUT SUPERPOWERS

When we talk about superpowers, we can apply the principle to individuals, to teams, or to companies.

My personal superpower is my ability to synthesize the most complex leadership and business concepts down to their simplest form – but no simpler. This is the foundation of our highly successful and profitable business model at Your CEO Mentor.

I loved the recent McKinsey article, which was titled, What’s Your Superpower? How Companies Can Build an Institutional Capability to Achieve Competitive Advantage. The phrase “institutional capability” is critical here – what is the one thing?

The article uses a case study of a retail giant that was going through tough times. It went looking for ways to turn this around, doing the deep work that was required to discover what that one thing is. The company decided to focus on building an analytics-driven pricing model and a world-class analytics capability to match. This revolutionized how the company conducted its merchandising.

It changed how pricing and markdown decisions were made, and the company trained and certified staff in the new ways of working. In the first year, this strategy produced hundreds of millions of dollars in margin expansion, and now it’s been embedded into the company’s capability, and is likely to provide a competitive advantage for many years to come.

There are many examples of companies that find their competitive superpower and focus all resources into that one thing. In the words of the author, “The companies that do this have made a choice, aligned their resources, and built their chosen superpower to deliver superior economics (and sometimes leapfrog rivals and innovate entire industries).”

What is institutional capability? McKinsey defines it as an integrated set of people, processes, and technology that creates value by helping the company consistently do something better than its competitors.

Think about how this might apply at the team level, if you’re not yet the CEO.

If you’re in a business unit (or line) role, it’s about developing the people and integrating the processes and technologies that leverage that one thing in the market… in other words, the superpower that the company is pursuing.

If you’re in a functional support (or staff) role, how do you build the capability in people, processes, and technology in your function that best supports the company in its goal to deliver its superpower to customers?

Just a word of caution here: if you’re leading a functional support team, don’t let complacency sneak in just because you happen to be the only game in town. You have an obligation to ensure that your expertise can’t be replicated externally.

Think about how you contribute value to the company as it works to develop its one superpower. The competition you should focus on is the outsourced version of what your team does. Could the company buy the capability that you deliver from someone else in the market who potentially offers greater value than your team does? Well, if so, it probably should.

Once that superpower is identified, McKinsey calls for step change, and this step change has to be in pretty much every area in the company in order to consolidate the competitive advantage that the superpower may bring.

Whatever team you lead now, this is directly applicable to you. What does step change look like in your world? It’s usually characterized by a couple of things: one is a radical shift in thinking, and the other is a major initiative to retrain and recalibrate all of your people.

If you say that fast enough, it sounds easy and, in fact, it may even be quite simple… but executing it is the hardest thing in the world.

If it were easy, everyone would be doing it.

CASE STUDY – A SUPERPOWER DRIVING COMPETITIVE ADVANTAGE

I want to give you a practical example from my corporate career where identifying and focusing exclusively on the one superpower of the company led to an enduring competitive advantage in the market.

In 2004 (can this possibly be 20 years ago!?), I accepted the role of Chief Information Officer at National Transport Insurance (and a big shout out to Tony Clark and the NTI team). Wayne Patterson, the CEO who hired me, was a superb leader whom I learned a huge amount from, particularly about how to manage the board.

NTI is a boutique insurance company that specializes in heavy motor vehicles. We’re talking big trucks and trailers here. It’s not the most glamorous industry, but it’s critical to our way of life (and if you aren’t convinced of this, just try parking up all the trucks for a week and see how it affects your daily routine. It’s absolutely an underrated industry).

NTI’s superpower was its intimate knowledge of the heavy vehicle market. General insurers simply couldn’t compete.

When their underwriters look at a truck, they just see… a truck.

When our underwriters looked at the same vehicle, they understood the risk that the company would be taking on that particular truck. We knew the difference in risk between a silver, rigid body, refrigerated Isuzu truck, delivering to supermarket loading docks in Sydney… and a red Mack 18-wheeler hauling articulated loads between Sydney and Perth.

And we were able to price that risk accurately. This enabled us to earn some of the highest profit margins in the insurance industry.

“But did the customers get short-changed in the name of greedy corporate profits?” I hear you ask.

Absolutely not! NTI has one of the most loyal customer bases you could imagine. Why? Because we didn’t use the classic insurance company ploy of denying claims to boost our profits. A lot of insurers charge low premiums so that you’ll choose to insure with them, but then when you have a claim, they’ll do everything in their power to not pay it. We call that “underwriting at claim time”.

Quite the contrary, NTI’s claim service was also a competitive advantage. It delivered the best customer experience imaginable. Because we charged the right premium for the risk, when that risk materialized and a customer needed to make a claim, we had no problem honoring our commitments and exceeding our customer’s expectations.

Because of NTI’s one superpower – the deep understanding that enabled us to develop the people, systems, and processes to leverage that deep market knowledge – no one else could compete.

I bumped into the CEO, Tony Clark, just recently on my trip to Australia, and I was so excited to hear that the company’s going from strength to strength. It’s still using its one superpower to grow profitably… over two decades later!

ARE YOU HONEST ENOUGH TO FIND YOUR SUPERPOWER?

I want to finish with a couple of tips so that you can work out exactly where your team’s at right now. This is the doorway to the discussion about its potential superpower. There are no easy answers here, and your first steps are going to be quite different depending on your current position.

To evaluate your situation properly requires self-awareness, introspection, and brutal honesty about both your people and your team’s historical performance.

I hate to say this, but it’s quite possible that your team is average… at best.

But you (and those around you) may be in denial. It really depends on where you set the performance bar. I frequently run into senior leaders who are living in a fantasy world where they can’t see the reality of their team’s true capability and performance, and they manage to perpetuate the ruse by saying things like, “We have the best people!” or “I’ve built a high-performing team!“

On what basis?

It’s extremely rare that you’d have a team where you genuinely had the best people. It’s all relative though, so the goal is to work your ass off at getting the best people you possibly can, given the hiring constraints that you’re subject to: your brand, your industry, your location, and your financial limitations.

At the same time, you need to have a relentless focus on your team’s work program to make sure people are doing the right things.

Then there’s leadership and culture: you ultimately have to lead every individual to perform at their best. This gives you a different yardstick to use in determining what good looks like, and it doesn’t lend itself quite so much to the bumper sticker platitudes of modern-day leadership theory.

Working on team composition and individual capability is a prerequisite for developing the focus on a single superpower. I know because I’ve seen a few examples of how not to do it over the course of my career.

I once had an executive reporting to me who bandied around the term “superpower” until it lost all meaning. He was running a functional support team, and when he came into the company, his first move was to bestow everyone with a superpower moniker.

The team went away on a retreat to identify each other’s superpowers. In my eyes, some of those individuals were obvious underperformers who needed to lift their game. If I was that executive, my energy would’ve been better spent explaining to these individuals what the shortfall was between their performance and the required standard. Instead, they came away feeling as though they had an invaluable capability that the company couldn’t live without.

The result was dangerous and ineffective… and there wasn’t a superpower in sight!

FOUR TIPS TO OPEN UP YOUR SUPERPOWER

Here are my four tips to help you position yourself so that you can begin to uncover your team’s one superpower.

1. Be brutally honest. Where are you now? If you can’t get this right, nothing else will matter. Whether you’re thinking about your personal superpower, your team’s contribution to the organization, or the one superpower that sets your company apart from its competitors, brutal honesty is your ticket to the game.
2. Identifying your superpower as if you’re developing a corporate strategy. Ask yourself the critical question, “What resources do we have that enable us to compete?” Again, regardless of what level you’re thinking about this at, taking an inventory of what you have is the first step.

To help prompt your thinking, consider the different resource categories that might be the source of potential advantages: physical resources, organizational resources, financial resources, technological resources etc.

For each resource you identify, once again, be brutally honest as you assess whether or not it’s likely to provide a competitive advantage in the market. Is this resource valuable? Is it rare? Is it hard to copy? Can it be substituted for something else?

This process is going to give you the basis for homing in on any potential superpowers.

3. Whatever you discover has to ultimately align with the company’s view. If you’re not doing this exercise for the company as a whole, you’ll need to make sure your team’s superpower aligns with the company’s strategy.

Understanding how the company differentiates itself, even if it isn’t focused on a single superpower, is going to require a number of conversations with your boss. Even if you think you have your team’s superpower nailed, without company alignment, you’re doomed to fail.

4. What if you can’t get alignment with the business, or can’t identify any superpowers in your team? This happens quite frequently and, in cases like this, go back to basics. Ask yourself a slightly different question – “What’s the one thing I can do to most improve my team’s focus, identity, and value proposition right now?”

You may need to replace someone… you may need to strengthen the leadership capability, lower down the pecking order… you may need to rationalize the work program… you may need to redefine the scope of your team’s accountabilities.

Whatever it is for your situation, it’s going to undoubtedly demand that you step into the hard work of leadership.

COMMIT TO YOUR FIRST STEP TODAY

Everyone says they want to be the best… but very few leaders are prepared to do the work that it would take for that ambition to come true.

Imagine if you did the work to identify that one thing – the superpower that your team could build on to drive extraordinary value creation. I don’t think there’s any doubt that the principle of simplicity and focus is key to unlocking this kind of value. So why do we spend so much time in the distraction of busy work?

Make the commitment with me – right now – that before the day is out, you’re going to take your first step. Just ask yourself the question, “What do we have that no one else has?”

Once you start pursuing this answer, it’s going to be really hard for you to look at the world any other way.