Chapter 5
Stop Being So Productive!
(Become More Strategic)
In the 1980s, Japanese companies seemed unstoppable. They had developed fantastic improvements in productivity that helped them churn out products faster, more cheaply and to higher standards. Yet, after a decade of irresistible global domination, the tide started to turn for Japan. By the ’90s, Japan entered a recession that lasted more than a decade, with zero growth, rising unemployment, and deflation. Other countries around the world had copied the best practices of Japanese manufacturing and destroyed Japan’s competitive advantage.
Productivity can provide important advantages over competitors, which can increase profitability, but it will rarely keep you ahead in the long term. Investments in new technologies can increase productivity, but best practices spread quickly, and the immediate gains in output are soon shared by competitors, so no competitive advantage is gained, meaning no increased profit. In fact, what tends to happen is that as all competitors get ever more productive, the investment cost in making further gains gets larger, and this eats into profits. It becomes an arms race in which everyone loses.
As individuals, our productivity has increased enormously with the arrival of each of the following: the computer, the laptop, the mobile phone, the Internet, the smartphone and the cloud. Each of these raised performance levels by allowing us to produce more. This has impacted our careers in three ways: First, we are all able to produce a lot more. So we do. This creates an ever-increasing amount of work for us all to do. Second, as we all use the same technology, our ability to differentiate ourselves on the basis of our productivity gets harder and harder. Finally, any further increases we want to make in our productivity in the hope of achieving ever-smaller advantages over our competition come at an increasingly large cost (especially if we remember Nassim Nicholas Taleb’s concavity).
The “More” Game
In the Industrial Age, the primary goal was production: given a set level of quality, the more you could produce, the better. As time passed and production processes improved, managers started to realize the thing that was slowing output the most was the human factor. They needed their people to work harder and more efficiently. Enter Frederick Winslow Taylor and his approach called scientific management. Taylor analyzed employee activity with time and motion studies to find out where efficiencies could be made. Ever since then, the core focus of most management teams has been to get their people to produce more.
In a curious parallel to the Industrial Age, a recent study has looked at what is holding back the effectiveness of computer systems today. A research group at Carnegie Mellon University claims that the limiting factor for computers today isn’t the processor speed or memory size or network capacity, it’s the human factor again. We are the limiting factor to progress. But this time, it isn’t our efficiency or hard work that is slowing advancement, it’s our (lack of) ability to focus and think.1
In our mania to squeeze ever more efficiency out of the workforce, ever more connectedness, ever more output, we have neglected the fact that our brains are not machines. In doing more and more, we are thinking less and less. Which is curious because in an information age, it is our cognitive abilities that matter: the collective intellect, imagination and problem-solving capability of our people. In other words, the very capability that our businesses need to cultivate is being damaged, day by day, by “more.” Floundering under the avalanche of corporate communication and demand, our poor brains struggle to do anything more than flit from micro-task to micro-task. We are productive but dumb; our battered and distracted attentional systems are slowing the entire system, and eroding corporate progress.
“More” Is Career-Limiting
From an individual perspective, we see that management wants productivity, and so realize that the more productive we are, the more valuable we are. So we all play the “More” game. The rules are simple: the people who produce the most (and are seen to be producing a lot) win. You work hard, you work long and your bosses notice you seem to be more motivated than your colleagues. Management starts giving you more to do: more work and more responsibility.
The “More” game can still work. If you are working with people who are much less hardworking than you, your extra efforts and productivity will be noticed and rewarded. Typically though, this only happens at the very start of our careers. At some point, it stops working. Then, we get to a point where we are no longer competing against the unmotivated; we find our fellow workers are also career-minded and playing the “More” game too! Then, the arms race starts, with email response time, working hours and the sheer quantity of stuff produced being the criteria for success. When the “More” game doesn’t bring results, we redouble our efforts trying to squeeze ever more activity, ever more output and ever more responsiveness out of our tired brains. The quality of our thinking drops, our imagination fades and our energy dwindles. Ever so slowly, we fade into the background.
Email: The TV of Work
One of the most obvious domains in which rampant productivity is demonstrated is our response to email. One study of two thousand UK workers found that 77 percent of them would consider “a productive day in the office” to be clearing their inbox.2 Jonathan B. Spira found that reading and processing just one hundred emails (who only has one hundred emails!) uses up half of a knowledge worker’s time.3
I think email has become the TV of work. It offers little, but it asks little too. So rather than do the big work that will make a difference, we turn on the email and pass the time (productively of course).
Transforming Our Success Strategy
We may not want to be busy, but few of us are willing to let our career aspirations die to achieve a calmer existence. So if our desire to succeed remains as strong as ever, what alternative do we have to the “More” game? I think the answer lies in the hard-bitten world of corporate strategy. There’s no fluff in the strategic world. Strategies either work or they don’t, and the game is scored in dollars. Strategy is about delivering success. More than that, corporate strategy is a great place to look for lessons on how to operate in a world of too much for two reasons:
1. The central problem that business strategy addresses is how to succeed in a competitive market with limited resources. No company can do everything. They have limited resources of money and workforce capacity. To survive, they have to make tough choices on where they can focus their resources most effectively. On an individual level, we have limited resources of attention and time. In the last section we discussed how we have to make choices because we can’t do everything. Michael Porter, one of the world’s leading strategists, would say we have to make choices because we shouldn’t do everything. If we want to succeed, we have to maximize the impact of our limited resources, and that means focusing our efforts on a limited number of areas.
2. To succeed in today’s crowded marketplace, companies have to capture the attention of consumers who are frantically busy and overwhelmed with choice. To do that, they need to be different; they need to stand out. The people who are making career-altering decisions about us are also distracted and overwhelmed. In an attention-scarce economy, corporate strategists have shown the route to success isn’t productivity; it’s differentiation.
This whole section is about changing your success strategy. It will show you how to succeed through a strategy that will differentiate you. This has two broad components: focusing your efforts more effectively to make the most impact with your scarce resources, and capturing the attention of your distracted and overwhelmed consumers. This chapter looks at the first of these.
Strategic Focus
In 1993, Continental Airlines launched its new, low-cost airline, Continental Lite. It opened to great fanfare as a specific move to compete against highly successful low-cost competitors, such as Southwest Airlines. Continental had many advantages: It had a large and wealthy parent company; it was offering some of the cheapest fares in the industry; it could meet the frequency of other low-cost airlines; it could allow passengers to transfer between flights without having to collect their bags; and seats were pre-allocated. It sounded perfect. Yet two years and $300 million later, Continental Lite flew its last flight. Partly as a result of this disaster, the parent company, Continental Airlines, came under hostile attack from Delta and Northwest Airlines. Ultimately, Northwest closed the deal that allowed Continental to maintain its brand, but all power transferred to the Northwest board.
Why didn’t this promising new airline, with so many advantages on its side, become successful? Michael Porter, in perhaps the most famous Harvard Business Review article ever, “What Is Strategy?”4 attributes the failure to a lack of strategic focus. In the face of stiff competition, Continental struggled to do both full-service and low-cost. The company relied on travel agencies for its full-service business, but couldn’t afford them for its low-cost option, so it cut agency commissions on all flights. Continental couldn’t support the frequent flier benefits on its low-cost version, and so it reduced perks to members on all journeys. Flights were also frequently delayed at hub airports due to baggage transfers that other low-cost providers didn’t have to worry about. The result: irritated agents, disappointed customers and late flights. Porter described Continental Lite’s approach as “straddling strategic positions.” It failed because they said “yes” to too many things. Continental paid a high price for its loss of strategic focus.
Where Will You Focus?
Porter gives the example of IKEA to demonstrate strategic focus. IKEA serves young furniture buyers who want style at a low cost. This isn’t unique in itself. What is unique is the way they choose to do it. You wander the showroom by yourself, with only a catalogue for reference, so there are no expensive showroom assistants to pay for; you collect your selections from the warehouse yourself, saving transport costs; and you build your own furniture when you get home, saving in storage. These various savings allow IKEA to focus on delivering the maximum in style for the minimum in cost. In addition, since its target audience is young and in full-time work, the stores are open long hours and often contain free child care services. IKEA is different, not because its furniture is different, but because it has adopted a different strategic position in the market. Where rival firms are competing only on the quality or value of their furniture, IKEA has focused its efforts differently. In strategic language, it has taken a different strategic position. In so doing, it has gained a sustainable competitive advantage.
When we try to compete by being productive, we do similar things to the competition, but try to do more of them, faster or more efficiently. Competitive strategy, on the other hand, is not about “more,” it’s about being deliberately different. It’s about doing different things than your rivals, or doing the same things in different ways.
A strategic position describes the activities you choose to focus on, the problems you choose to solve for your customers. Developing a strategic position allows you to bring real focus into the way you can add value. For example, IKEA chose not to focus on cash-rich, time-poor over-forties, even though that segment of the population is a lucrative one. The over-forties would want speed, service and ease. If IKEA had chosen to meet the needs of both young and older, the speed and service it would offer would require sacrificing design quality or increasing prices. Both of which would have disappointed young furniture buyers. It would be doing what Continental did. In focusing only on young buyers, IKEA can go way further than simply providing cheap, quality furniture; it can properly understand its target audience. It can add extra services like long hours and child care, because it knows they are valuable to its audience. In this way it differentiates itself.
Clarifying your strategic position helps you to shift your prioritization away from getting things done, and onto something more proactive and intentional. You start choosing how you will maximize your limited resources, by focusing on just those things that will help you deliver the most impact. It also helps you to differentiate yourself, by identifying how you can make your offer more unique.
Your Strategic Position
I talk to my clients about the four options from a career perspective: everything-everyone-based positioning, cost-based positioning, product-based positioning and audience-based positioning. Only the final two, for most people, are attractive.
Everything, Everyone
A restaurant I know had developed a good reputation for the quality and creativity of its food. Flush with success, it moved to larger premises. In the first week it became clear that the demand in its new location was strong. But then it all started going wrong. To meet the demand, the restaurant decided to hire cooks from a well-known, low-quality, high-turnover restaurant. Rather than accepting a need to restrict client numbers while training new staff, it filled the restaurant, and the kitchen staff simply did their best. In addition, not all their new clientele were appreciative of the innovative haute cuisine, so the menu was “dumbed down.” Rather than sticking to its formula of quality, interesting food, the restaurant tried to do everything for everyone. In a few short months, what had seemed like the glorious beginning of a very bright future was a distant memory. The restaurant lost its position in the market and failed to satisfy its customers; it closed shortly afterward.
Trying to do everything for everyone is no strategic position at all. The business or person that adopts this approach spreads themselves thin and ends up delivering very little of real impact in the business. This approach is the most common position of those who focus first on productivity—those with serial busyness.
Cost-Based Positioning
A valid, and often effective, corporate strategy is to be the low-cost option. This also applies to careers. This doesn’t mean that what you do, the service or product you produce, is low quality; it simply means that you sell it for less than others in the same market. For example, I know many consultants who work independently, or who work for small consulting firms, who offer a high-quality service. However, that’s not why they get their work; it is only how they keep their clients. They get work because they offer the same service as big-name consultancies at a significantly lower cost. This model can work for them, since they have fewer overheads.
This is a valid strategic position, but I won’t dwell on it, since few of my clients get very excited about this strategic option (for some reason!).
Audience-Based Positioning
This strategy was called a “needs-based” position in Porter’s Harvard Business Review article. It involves offering a wide range of products or services to a very specific group of clients. Take the example of a private bank that specifically targets a small selection of wealthy individuals. In targeting a small group of people, they gain a deep understanding of their clients’ needs and build strong relationships. They offer the customer a one-stop shop of integrated products, all catering to people with very similar needs. A company basing its strategy on audience-based positioning aims to beat its competition by using a deeper insight into the customer, individually tailoring to the customer’s needs and building a trusting partnership.
Could you differentiate yourself by identifying a specific target audience and seeking to understand it better than others, having stronger relationships and offering them unexpectedly bespoke solutions for their needs? For example, Frank is a sales manager in a large media organization. He had clients spanning a wide range of spend with his business, but the majority of his business (a bit over half) was coming from 5 percent of his clients. When he reflected on the way he spent his time, he realized that his time allocation bore little relation to client spend. He had been allowing the requests and queries of his various clients to determine how he spent his time; he needed a strategy.
He made a deliberate choice to make a radical shift in how he spent his time, spending more than half of it on the 5 percent. He didn’t do this because the 5 percent were asking for more time, but because he saw the 5 percent as his biggest opportunity. He met with them more, not to sell, but to really understand their business and to build personal relationships. He started to understand how he could support them better. His partnerships with his clients helped him to recognize that their advertising needs were being met by individual media owners offering relatively narrow, standard products. Based on his insight into their needs, he developed an award-winning solution by pulling together an airline, a travel agency, a TV company and a newspaper. He became the first person the 5 percent would call, not just when they had advertising to buy, but also when they had an idea or a problem. Frank transformed his effectiveness: his sales increased, his clients loved him and he differentiated himself in the eyes of his employer.
If you think this is the game you should play, reflect on the following questions:
• If you were being really targeted about your core audience, who would they be?
• How well do you really understand your target audience’s needs?
• How could you bring much more focus toward your target audience?
• What are the problems you could help them solve, which they are not even discussing with you at present?
• How could you strengthen the relationship with your target audience and build a stronger partnership with them? How can you make their lives easier?
Product-Based Positioning
This strategy is all about creating a narrow range of products or services that will appeal to a wide population of people. Economists Kjell Nordström and Jonas Ridderstråle argue that there are only two effective strategies: to be “fit” or to be “sexy.”5 “Fit” means meeting a specific customer need better than anyone else. “Sexy” means producing a product or service that has an emotional appeal—that stands out from the crowd because it is cooler, more desirable. Product-based positioning can come from either strategy. Henkel, the German company, invented the glue stick to allow people to easily and cleanly glue paper. Henkel released Pritt Stick in 1969, which fit a need (we didn’t know we had) in schools and offices; by 2001 they were being sold in 121 countries. Apple is the obvious example of sexy. At the time iPods were becoming dominant, there were many other MP3 players, but none were so cool. It’s about doing very few things really well, so that they stand out from the competition in a crowded market.
How could you differentiate yourself through what you do? What capabilities or areas of expertise could you develop that would truly set you apart? What service could you develop or offer that uniquely fits a specific need in your organization or market, or that’s just downright “sexy”?
Amy works for a multinational food company that has grown through a strong sales culture and a capability to acquire and integrate other businesses. Due to the turbulence of the food industry, and the acquisitive nature of her organization, Amy noticed that there were a lot of change initiatives. As someone who had a low boredom threshold she felt working in change would suit her. Amy decided to get involved, but… she worked in finance.
Amy started to volunteer for any change initiative, which started to get her noticed. She demonstrated real commitment and not a little talent on these initiatives. With her manager’s blessing, she completed a master’s degree in change management. She wrote a couple of articles for the internal newspaper and then in the trade press. She was proving herself to be increasingly useful and became recognized in the business for her ability to offer insights into organizational change backed up by sound financial understanding. Her breakthrough came when she was given a business (rather than financial) leadership position at a factory due to be closed. She turned the factory around through a change program involving all the staff and a series of tough decisions to stop the production of long-established products. Next she worked with the CEO on the biggest acquisition in the company’s history. She is now a managing director, not because she was a good accountant or because she worked hard, but because she differentiated herself through a persistent focus on delivering change. It was her expertise in change, alongside her financial skills that made her stand out.
If you think this is the game you should play, ask yourself the following questions:
• What makes you uniquely useful to your business? What capabilities, expertise or experiences do you have that are most valuable?
• What can you do that no one else can?
• Which of your capabilities are most in need—or admired—in the business at present? In the future?
• How do you build a track record of success that demonstrates your strength?
• What particular products or services will you develop or deliver?
• How is your capability driving innovation and change in the business?
Still Undecided?
When it comes to you and your career, strategic questions like this can be quite hard. Organizations can take years to really clarify their strategic position, and many never do. My strong recommendation is that you ditch the “everything and everyone” strategy and get a clear idea of where your focus should be. It should be either audience-based or product-based. Once you know that, you can be more specific about the particular audience or product you will focus on. Once you can define your strategic position, differentiating yourself is much easier.
Play to Your Strengths
I meet people all the time whose primary focus and concern seems to be responding quickly, producing stuff and keeping everyone happy. These are talented people, with great capability, crippled by a desire to execute in order to get it all done. They judge themselves, and feel they are judged by others, only on their efficiency and productivity—on how much they do and how fast they do it. It feels like judging a Ferrari on the basis of its fuel consumption.
What are you great at? Every corporate and career strategy should be grounded in the core capabilities of that business or person, not just the market need. Your strategy could be as simple as finding a way to double the percentage of time that you are involved in the activities that you do best. Gallup found that only one in three people in large corporations use their core strengths every day;6 that’s a ridiculous waste of our abilities. Find ways to use your core strengths a lot more, then figure out how to deal with all the other stuff that has been filling so much of your time to date. It is only our core strengths that allow us to make our greatest contribution—to our organization, to our families and to the world.
Trade-Offs
I remember watching a documentary about Ryanair, a successful European low-cost airline based on the model of Southwest Airlines. The program was made in the early days of Ryanair. It was designed as a shocking exposé of the terrible customer service provided by the airline. It revealed passengers receiving little or no support from Ryanair after being stranded in obscure airports when their flights were canceled, unexpected charges and fines, and rude and militant staff. It was quite shocking. At the end of the show, the investigative reporter got a short interview with Michael O’Leary, the chief executive, to see how he would respond. His answer was brilliant. He said, more or less, we don’t do customer service; we do cheap flights. For me it was one of the strongest examples of clear strategic thinking I’d ever heard: he understood that there is a cost to customer service—a cost that might increase fares. His strategic trade-off was clear: fly with us and you might not get the best customer service, but you will certainly get a cheap flight. Ryanair’s position doesn’t appeal to everyone, and even upsets some people; that is the risk it takes. But it really appeals to the airline’s target audience.
Frank and Amy had to make trade-offs to allow them to focus on their strategies. Frank had to manage the other 95 percent of his customers as he deliberately reduced the time he spent supporting them. Amy had to find time for her change work, even if that took time away from her pure accountancy. We don’t have unlimited resources, so if we want to succeed in a competitive workplace, we have to make some tough decisions. Making choices is a strategic activity. It is only those choices and trade-offs that allow us to focus and differentiate ourselves.
What trade-offs do you need to make?
• What should you stop doing, to allow you to focus on your core strategy?
• What should you do less of?
• What risk or loss do you have to accept to stay focused on your strategy?
Less Is More
We are the most focused company that I know of or have read of or have any knowledge of. We say “no” to good ideas every day. We say “no” to great ideas in order to keep the amount of things we focus on very small in number so that we can put enormous energy behind the ones we choose.7
—Tim Cook, Apple CEO
Succeeding in a world of too much is not about producing “more”; in fact, it is about doing less, better and with more impact. It’s about focusing on fewer, bigger things with enormous energy. Like Apple. Here are some practical tactics to help you to do this.
Do the Big Stuff First
There is a little experiment Stephen Covey used to do with rocks, gravel and sand. You take a big jug and fill it with big rocks. When you can’t get any more in, you add the pebbles until you can add no more. Finally, add the sand. Empty the jug and do the same thing in reverse. Add the same amount of sand, then the gravel, then the rocks. You will notice, try as you might, that you will only be able to fit a small number of the big rocks into the jar this time.
This is a well-known time management demonstration that conveys a simple, profound and seldom-followed principle: focus on the big stuff first and fit the little stuff around it. When we think about managing our time or being productive, we often think about what we will do, or when we will do it by. We don’t tend to think much about the order we will do it, but the sequence matters. It matters because we get tired, we get distracted and we often don’t get through all the items on our list. The things we choose to do first, we are much, much more likely to get done.
It is too easy to adopt the “if” or “when” mentality: if I get on top of my emails I’ll give some time to my strategic work; when I have more time I’ll be more strategic. You will only deliver real impact through persistent focus on your strategy, or the big rocks, over time. If you want to differentiate yourself in this world of too much, do the big rocks first, then the sand and gravel.
Tracking Important Practices: A Balanced Scorecard
Robert S. Kaplan and David P. Norton introduced the concept of the balanced scorecard to the business world back in 1992.8 At the time they were concerned that focusing solely on financial measures of performance was driving the wrong behavior in organizations. In essence, the balanced scorecard helps organizations track what really matters. It accepts that people will seek to deliver what is being measured. So by starting to measure a more balanced set of things, you get a more balanced and sustainable set of business practices.
Things have moved on since the early ’90s, but the need for a broader view of performance has never been more important. What about for individuals? We naturally track whether we have an empty inbox, are delivering everything on time, clearing our to-do list, etc. We track these because they are so visible, so noticeable. These might be valuable things to track, but this does not provide a very balanced view.
Most balanced scorecards have four areas they track, one of which is financial performance. I keep a balanced scorecard on myself to keep reminding myself of where I want to focus. It has four elements. One is Delivery, my day-to-day business; one is Writing, which incorporates research and thinking; one is Relationships from a work perspective; and the final one is Energy, which focuses on two areas: emotional energy from quality time with family and friends, and physical energy. I am truly succeeding when I focus on, and make significant progress in, all four areas over a month.
What would your four be?
Focus on “Horizon Two”
Mehrdad Baghai and his colleagues from McKinsey and Co. introduced the concept of three time horizons in which to think about corporate strategy.9 Horizon One is short-term: managing the business over the next year. Horizon Two is middle-term: identifying and putting in place the next generation of high-growth opportunities. Horizon Three is long-term: incubating the germs of new ideas that will sustain the business long into the future. You need to focus on all three horizons in order to succeed.
Horizon Two, the middle-term, is a dangerous middle ground. It’s quite nice for executive teams to go for off-site meetings and dream up bold, wonderful-sounding visions and long-term strategies. Back at work, these same executives enjoy getting embroiled in the heart-pumping, adrenaline-fueled thrill of the day-to-day. Somehow what gets lost is the middle term. For example, failed companies such as Kodak, Sun and Xerox, all invested heavily in Horizon Three; and they all continued to run their businesses effectively day-to-day using Horizon One strategies. The problem was, they failed to translate these long-term ideas into concrete realities. They failed to pay sufficient attention to Horizon Two.
How true is this for many of us busy folk? Horizon Two has none of the emotional appeal of long-term Horizon Three dreams or activities such as signing up for that MBA. They also don’t have the adrenaline-fueled payoff of the immediate Horizon One. Yet most of the strategic impact you will make will be from Horizon Two initiatives.
I define Horizon Two activities as three-to six-month concrete initiatives. They may be projects, process changes or activities to your network. Often, Horizon Two activities are initiated proactively, based on your view of where you can contribute most. They are not broad intentions, but specific sets of activities designed to deliver a result, typically within two quarters. As a result, Horizon Two activities require substantive focus, but deliver substantive results.
• What Horizon Two activity will make the most impact on your strategy?
• What Horizon Two activities are you not focusing enough on?
• What can you do to stop getting sucked into endless Horizon One work?
Bigger Picture Beats Detail
We know that we can improve our performance by coming up with a plan, but what kind of plan is best? In a carefully controlled study, researchers were keen to understand how to help students improve their study skills through planning. Students were put into one of three groups. One group was instructed to make daily plans for what, where and when they would study. A second group was asked to do similar plans, only month by month. A third group made no plans. Monthly planners performed best in terms of improvement in study habits, grades and in retention of the good habits: a year later the monthly planners were still getting better grades than the daily planners (though both groups beat those who didn’t plan at all).10
It turns out that having a broader view of what you mean to accomplish is more effective and motivational. Focus is often lost when we’re too close to the detail. So when it comes to your Horizon Two initiatives, develop broad plans, and get on with them.
How Many Horizon Two Initiatives?
A psychologist asked a bunch of US army generals how they managed their affairs. A battle-hardened general, the only woman in the group, summarized her approach: “First I make a list of priorities: one, two, three, and so on. Then I cross off everything from three down.”11 I mentioned the value of a balanced scorecard earlier, with four focus areas. This works well in directing attention to the key areas of your performance. However, when it comes to substantive Horizon Two initiatives, the general’s steer is useful: one or two at a time is enough to focus on.