Be the Steve Jobs of Your Company

Steve Jobs recently retired as CEO of Apple for health reasons.  While he will continue in his role as Chairman and likely also as a keeper of the Apple vision, this caps his run as what may well be remembered as the most remarkable and effective CEO of not only our age but all time.

What is it about Jobs that made Apple such a success and what can we learn from him that would help us become the Steve Jobs of our own companies?

Apple is a standout company because Steve Jobs refused to accept mediocrity.  Your company's success could well depend on whether you follow in his footsteps.  Do you embrace his passion to be different, to be a leader, a visionary, to change the world as we know it?  Do you accept nothing short of excellence and perfection, or do you tolerate mediocrity?

Apple will be fine without Steve Jobs.  Because Steve Jobs isn't just a CEO, he's an idea, and an idea that all companies should embrace.   We know this because in working with our clients and our own companies, this belief system and passion for excellence is something we strive to achieve every day.  It is an integral part of our culture and our belief system.

Steve Jobs represents an ethos that is core to Apple's culture.  He, as an idea, is a simple one.  It's all about building amazing, intuitive, life- changing products that people love.  To embody this principle, Apple doesn't need Jobs.  It can live on through the shared vision of Apple's talented people who deeply care and are dedicated to creating greatness.  As long as that culture continues to thrive in Cupertino, Apple will be fine.

That said, it's also a culture other companies would be well served to emulate.  What Apple has achieved isn't impossible.  The question for us all is -  why don't more companies do it?

Perhaps the answer is because it's really, really hard.  At Harbour Bridge Ventures and our portfolio companies, we work constantly to delight our customers and not only meet, but also exceed their expectations.  That's what our clients are asking from us when they hire us or use our products and services.

That's no easy task.  If our companies are to meet this high standard of excellence we must first understand what it is we believe in and are committed to and be certain that it is well aligned with the beliefs and desires of our customers.  We have to be certain that every employee in our companies understands our mission and is passionately committed to it.  We need to make sure that we are always pushing ourselves to be better.  We are not just striving to be better than our competition, but for constant improvement in our own deliverables.  Steve Jobs created a culture at Apple that was not only willing to obsolete it’s own products, but actively sought to do so.  Apple seeks constantly to improve.

Does your company wait for your competitors to drive you to innovate and improve, or do you believe you are your own competition?   It means constantly challenging yourself to see if your customers’ experiences can be better, more beautiful, simpler, more elegant, more in tune with what people will embrace.  It's a painstaking undertaking that means sweating all the details, because your heart and soul is in it, and because it's become your baby, and you want it to be absolutely perfect.

Then once it is delivered, do you sit back and wait?  Or, do you press forward to improve it yet further.   Do you seek to make the customer experience even better?

Most people and companies don't bother to do this.  Most find it easier to rest on yesterday’s successes.  That's why Apple is such a standout.  For many the passion, the heartache and the pressure that's required is just too much.  They fall back to what is easy - mediocrity.  They punch the clock, go home at five satisfied to have put another day’s work in the rear view mirror, and don't really push themselves or their team toward greatness.

HP's TouchPad is a case in point.  Think for a moment about that product and the team behind it.  Were they really trying to reinvent the world?  Were they trying to create the best new tablet possible?  Were they trying to define or deliver a brand new user experience to their customers?  No. If they were, they certainly weren't trying hard enough.  Because all they created was an iPad clone.  They didn’t break the mold or create something truly new and innovative.  Why would anyone buy a bad imitation of the original for the same price?  They wouldn't and didn't, and consequently HP failed.

If HP had a Steve Jobs culture, they would have made something completely different.  They would have pushed themselves to make something better.  Better could have been cheaper; better could have been something dramatically different that makes people rethink whether an iPad is the tablet for them; better could have had consumers wondering how they ever lived without it.  But HP took the easy way out and simply made a copy of someone else’s idea.  They didn’t strive to be better or different.  They settled for mediocrity.

For many companies, taking the easy way out is relatively acceptable.  You can sometimes even get away with it for a bit, and be just one more of the many competitors in a market.  But, if you take the easy path you won't stand out, you will never be Apple, and you will never be the Steve Jobs of your company.

So the opportunity for you, as an entrepreneur, manager, executive, technologist, or whatever your job is, is to follow in Steve Jobs' footprints.  Be the Steve Jobs of your company.  Just like him, you can push yourself and your team to create exceptional products, service, and customer experiences that are so special that in forty years you'll look back and be proud that you were part of it.  It's the key to your business success, your company's ability to compete in today's kill or be killed economy, and it's the key to a rewarding, fulfilling career and personal happiness.

Do something you really, really love, do it better than anyone else, and do it first.

How Great Leaders Inspire Action - The Golden Circle

Recently while researching an idea, I came across an inspiring talk on TED.  I want to share this particular talk with followers of our HBV Blog as I feel this is a very powerful concept that can help us understand why some business are more successful than others, why some people are more inspiring leaders than others, and why some communications are more effective.  First, for those not familiar with TED, a short introduction.

For those who are unfamiliar with TED - TED is a nonprofit devoted to Ideas Worth Spreading.  It started out (in 1984) as a conference bringing together people from three worlds: Technology, Entertainment, Design. Since then its scope has become ever broader.  Today the TED website, www.TED.com, offers the best talks and performances from TED and partners available to the world, for free. More than 900 TEDTalks are now available, with more added each week.

TED believes passionately in the power of ideas to change attitudes, lives and ultimately, the world.  TED is a clearinghouse that offers free knowledge and inspiration from the world's most inspired thinkers, and also a community of curious souls to engage with ideas and each other.

If you have never visited the TED website, I encourage you to spend a few minutes browsing the site and becoming familiar with it.  You may find an inspiring idea or thought, or even have one of your own you wish to share with others.  I often consult TED when I am looking for thoughts to help explain or clarify ideas I am working on.

Now for the TED talk I wish to share.

Why is Apple so successful?  Why was Martin Luther King such an inspirational leader?  Why did the Wright brothers succeed in achieving the first powered flight?  It turns out the answer is both simple and powerful.  It is all embraced within the idea of the "Golden Circle" of what, how, and why.

Please take a few minutes and watch the video at this web link: http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html.

I think you will find Simon Sinek has distilled a very powerful idea into an easily understood and well communicated 18 minute TED Talk.  I encourage you to be inspired by this as well.  Think about how it may apply to your own endeavors.  Most of all, I believe it will help you understand a path to more effective communication.  Enjoy Simon Sinek's TED talk and think about how you can apply to your life and efforts.

I will let Simon speak for his own idea as he does an outstanding job in communicating his insight.

A Series of Discussions on Conducting Better Meetings

Process for Reaching Meeting Objectives

Once the meeting objectives have been defined it is next important that the agenda clearly describes how the objectives will be achieved.  This includes the specific steps to be followed during the meeting to achieve the objectives.

In reviews of our clients' meeting processes we often find that too much time is devoted in their meetings to communicate information to the participants to achieve a common level of understanding.  Meaningful discussions are difficult to conduct if meeting participants are not informed on the relevant issues and background information.  If a significant portion of the meeting agenda is devoted to getting the group to a common level of understanding, it is both a waste of important meeting time and often leaves insufficient time for actual decision-making.  We are all for requisite briefings in meetings to make sure an appropriate level set is accomplished and participants understand the context of the meeting objectives and related decisions.  However, it is the decision making process that is the true value of assembling the group for the meeting and this should comprise the bulk of the meeting agenda.

It is important to achieving the organization’s objectives to make certain that stakeholders in decisions, those responsible for carrying them out and those subject to their consequences, feel ownership in the decisions and are thoroughly bought into them.  For this reason, the manner in which the meeting’s decisions are reached must allow for sufficient participation of the group’s members in both the discussions and decision-making process.  The agenda should expressly reflect this in the agenda items, their description, and the time allowed for each activity.

Meeting participants can be expected to have individual perspectives on issues and often also have their own agendas that they wish to pursue.  It is important to allow for expression of helpful perspectives relevant that are not in conflict with the overall corporate objectives.  However, it is the job of a skilled facilitator to try not to let particular biases, individual agendas that may be inconsistent with corporate objectives, or particularly vocal participants dominate the discussions by encouraging broad group participation and reminding the team when appropriate of the corporate context of the objectives and related decisions that must be taken.

It is important that the meeting’s proceedings, including the discussions, any conclusions, and all decisions be well documented and shared after the meeting with all participants.

As previously stated in early discussions on effective meetings, the agenda should be carefully managed to keep as close as possible to the intended schedule and the meetings should always begin and end on time.  Despite the fact that managers understand the time of meeting participants is extremely valuable, we often find the discipline of starting meetings on time and rapidly moving into the business items on the agenda is absent.  Should you find this lack of discipline in your meetings we strongly suggest addressing it as an urgent priority.  Make it clear to meeting participants that henceforth meetings will begin (and end) on time and they are expected to come on time as well and be prepared when they arrive.

A Series of Discussions on Conducting Better Meetings - Creating a Strategic Agenda

Creating a Strategic Agenda

The first task in organizing an effective meeting is the creation of a strategic agenda with commonly understood goals and objectives that are meaningful and current to the success of the business.  Even the most skilled facilitator cannot overcome a poor agenda.

An effective strategic agenda clearly lays out the goals and objectives that the team of participants is expected to accomplish.  These may include – questions that need to be answered, decisions required of the team, challenges for which solutions are being sought, assignments that need to be made, or some other such matters.

The goals and objectives reflected in the agenda should be sufficiently meaningful and relevant to the success of the business to justify assembling the team of participants and taking time away from their day-to-day responsibilities.  If the subject of the meeting is deemed by the participants to be less consequential to the success of the business than the activities and responsibilities they have left behind to attend the meeting, they will likely not be fully engaged and the meeting will be unfocused and unproductive.

The goals and objectives for the meeting stated in the objective should be sufficiently meaningful and current to the success of the business to justify assembling the team to discuss them at this time.  Assembling the team of participants required for the contemplated meeting will take time away from the day-to-day responsibilities of the participants.  If the goals and objectives for the meeting are less consequential or immediate than those day-to-day activities to the success of the business, the meeting will only be perceived as a distraction and impediment to accomplishing those activities.  While it is clearly important to address important matters on which the future success of the business depends, managers must be careful to balance intermediate to longer term planning and decision making with the urgent and essential current priorities of the business.

A good strategic agenda should address both meaningful and timely goals and objectives.

We generally use the acronym SMART to describe the characteristics of strategic objectives.  SMART objectives are Specific, Measurable, Attainable, Realistic, and Timely.  Meeting organizers should carefully examine the goals and objectives for a meeting to be sure they meet these criteria.

We like to see action verbs such as the following used to articulate meeting objectives: 

Analyze

Assign

Develop

Identify

Prioritize

Request

Announce

Brainstorm

Decide

Improve

Reevaluate

Review

Appropriate

Categorize

Delegate

Evaluate

Learn

Refine

Summarize

Approve

Clarify

Determine

Explore

Plan

Teach

Choose

Action

Once the meeting objectives have been determined they should be prioritized.  This allows the agenda to effectively deal not only with the relative importance of each objective but also dependencies and potential conflicts amongst the objectives.  Prioritizing the objectives will often help sequence or order the agenda.

It is also important to remember not to overload an agenda with too many objectives.  An overloaded agenda can often result in over long meetings or a failure to accomplish the objectives within the time allotted for the meeting.  It is important that meetings both begin and end in a timely manner so participants can plan their attendance appropriately and make any required accommodations in their schedules to attend.

Generally, we feel that most good meetings should be not more than two hours in length to maintain optimum focus of the participants while achieving meaningful objectives.  Generally, it is difficult to accomplish more than one or at most two significant objectives and two or three small items within such a time period.  We feel it is better to hold multiple meetings on focused agendas than to overload a single agenda.

A Series of Discussions on Conducting Better Meetings

What Makes a Good Meeting?

There is probably no one reading this discussion that has not complained about going to poorly run, time wasting, and unproductive meetings.  It seems to many of us that too many meetings are unsuccessful, too long, unfocused, petty, unproductive, led by domineering or disagreeable individuals, meandering, time wasting, boring … the list goes on and on.  In our work with clients we often find that most companies conduct far too many poorly run and unproductive meetings.  Many executives and managers are aware of how expensive and time wasting such meetings are but seem at a loss to know what is required to make them more meaningful and productive.

This series of discussions is designed to help managers plan and run more effective meetings.

So, what makes a good meeting?

·     A strategic agenda with commonly understood goals and objectives that are meaningful and current to the success of the business

·     A clear, agreed process for reaching those goals and objectives that is reflected in the manner in which the meeting is conducted

·     Consistent and well-understood ground rules for conducting the meeting

·     A skilled meeting facilitator / leader / chairperson who conveys to those attending a sense of involvement and empowerment.  It is critically important that those who will carry out the decisions reached in the meeting feel ownership of the decisions and that they are able to do whatever needs doing to accomplish the stated goals and objectives

·     Proper preparation prior to the meeting to be certain

o   The right participants are attending

o   Participants come to the meeting properly prepared

o   The facilitator / chairperson / leader is properly prepared

These seem like quite simple rules.  When discussing them with our clients we seldom get any dispute on these critical elements to a successful meeting.  However, when we ask them to reflect on how often these are carefully observed in their own meetings we generally find that at least one and often many of these elements are missing.

Training an organization to run effective and productive meetings is in many respects analogous to preparing a sports team to excel in competition.  Most managers can be trained to develop a strategic agenda and facilitate or chair a good meeting, although it takes not only training, but also practice and repetition as well to become truly proficient.  However, the more people within a group who have good meeting process and communication skills, the easier will be the task of the chairperson and the more satisfactory the end results of the meeting.

Developing a Balanced Scorecard for Commercial Banking

In recent months HBV has been working with a large regional Bank on a Business Transformation exercise.   Essentially the purpose of the engagement is to transform the current practices of the client to more closely comply with an industry best practices model.  The results of this should include increased productivity, improved performance, increased customer satisfaction, enterprise growth, and improved utilisation of human resources.  The Bank we have been working with expects rapid growth in the next several years both from organic growth and an aggressive acquisition strategy.  This exercise will prepare the enterprise to better manage this growth as well as provide a better platform for the integration of future acquisitions.

One of the topics we have spent time with our Banking client on is the importance of a Balanced Scorecard to track and measure performance of the enterprise.


When implementing a Performance Management system for any enterprise, it is important to make certain to appropriately balance all competing priorities and imperatives of the business.  The Balanced Scorecard approach is an effective methodology for accomplishing this balance.

We felt that while the below comments were developed for our banking client, followers of the HBV Blog would be able to easily understand how to apply the same approach to their own enterprise using the below described approach as a model.


Developing a Balanced Scorecard


When considering the strategic process, this provides an opportunity to consider the set of performance measures adopted by the Bank to measure the success of its strategy.  To assess the effectiveness of any set of performance measures it is most appropriate to use the Balanced Scorecard concept.


What is a Balanced Scorecard?


A new approach to strategic management was developed in the early 1990's by Drs. Robert Kaplan (Harvard Business School) and David Norton. They named this system the 'balanced scorecard'.  Recognising some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective.


The balanced scorecard is a management system (not only a measurement system) that enables organisations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.


Kaplan and Norton describe the innovation of the balanced scorecard as follows:


"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."


The balanced scorecard suggests that we view the organisation from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:

• The Financial Perspective
• The Customer Perspective
• The Business Process Perspective
• The Learning and Growth Perspective

Figure 1

The Balanced Scorecard approach is designed to address some of the weaknesses of other performance management systems that tend to create conflicting goals or objectives within an entity.  This frequently results when objectives for organisational units are too closely tied to business unit goals rather than set to align with higher Entity level objectives.  When the Bank’s objectives are established, measured, and managed across the four dimensions of the Balanced Scorecard this tends to “balance” the perspectives of the managing the enterprise to optimise both short term and long performance through the balanced considerations.  Additionally, all organisational units should similarly take a balanced scorecard approach to business unit objectives making certain to focus on their ability to contribute to accomplishment of all of the Bank’s entity level objectives and measures.


The Balanced Scorecard and Measurement-Based Management


The balanced scorecard methodology builds on some key concepts of previous management ideas such as Total Quality Management (TQM), including customer-defined quality, continuous improvement, employee empowerment, and -- primarily -- measurement-based management and feedback.


Double-Loop Feedback 


In traditional industrial activity, "quality control" and "zero defects" were the watchwords. In order to shield the customer from receiving poor quality products, aggressive efforts were focused on inspection and testing at the end of the production line.  The problem with this approach -- as pointed out by Deming -- is that the true causes of defects could never be identified, and there would always be inefficiencies due to the rejection of defects.  What Deming saw was that variation is created at every step in a production process, and the causes of variation need to be identified and fixed. If this can be done, then there is a way to reduce the defects and improve product quality indefinitely.  To establish such a process, Deming emphasized that all business processes should be part of a system with feedback loops.  The feedback data should be examined by managers to determine the causes of variation, what are the processes with significant problems, and then they can focus attention on fixing that subset of processes.


The balanced scorecard incorporates feedback around internal business process outputs, as in TQM, but also adds a feedback loop around the outcomes of business strategies.   This creates a "double-loop feedback" process in the balanced scorecard.


Outcome Metrics


You can't improve what you can't measure.  So metrics must be developed based on the priorities of the strategic plan, which provides the key business drivers and criteria for metrics that managers most desire to watch.  Processes are then designed to collect information relevant to these metrics and reduce it to numerical form for storage, display, and analysis. Decision makers examine the outcomes of various measured processes and strategies and track the results to guide the company and provide feedback.


So the value of metrics is in their ability to provide a factual basis for defining:

• Strategic feedback to show the present status of the organization from many perspectives for decision makers
• Diagnostic feedback into various processes to guide improvements on a continuous basis
• Trends in performance over time as the metrics are tracked
• Feedback around the measurement methods themselves, and which metrics should be tracked
• Quantitative inputs to forecasting methods and models for decision support systems

Management by Fact 

The goal of making measurements is to permit managers to see their company more clearly -- from many perspectives -- and hence to make wiser long-term decisions.  The Baldrige Criteria (1997) booklet reiterates this concept of fact-based management:

"Modern businesses depend upon measurement and analysis of performance. Measurements must derive from the company's strategy and provide critical data and information about key processes, outputs and results.  Data and information needed for performance measurement and improvement are of many types, including: customer, product and service performance, operations, market, competitive comparisons, supplier, employee-related, and cost and financial. Analysis entails using data to determine trends, projections, and cause and effect -- that might not be evident without analysis.  Data and analysis support a variety of company purposes, such as planning, reviewing company performance, improving operations, and comparing company performance with competitors' or with 'best practices' benchmarks."

"A major consideration in performance improvement involves the creation and use of performance measures or indicators. Performance measures or indicators are measurable characteristics of products, services, processes, and operations the company uses to track and improve performance. The measures or indicators should be selected to best represent the factors that lead to improved customer, operational, and financial performance.  A comprehensive set of measures or indicators tied to customer and/or company performance requirements represents a clear basis for aligning all activities with the company's goals. Through the analysis of data from the tracking processes, the measures or indicators themselves may be evaluated and changed to better support such goals.

Balanced Scorecard Perspectives 

The Balanced Scorecard is a framework for translating an entity’s strategic objectives into a set of four linked performance components.  The Balanced Scorecard concept includes the following:

• Financial perspective - how does the Bank look to stakeholders?
• Customer or market perspective - how do customers see the Bank?
• Process perspective - what must the Bank excel at to succeed?
• Learning and growth perspective - can the Bank continue to improve and create value?

The Financial Perspective 

Kaplan and Norton do not disregard the traditional need for financial data. Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it.  In fact, often there is more than enough handling and processing of financial data. With the implementation of a corporate database, it is hoped that more of the processing can be centralized and automated.  But the point is that the frequent emphasis on financials leads to the "unbalanced" situation with regard to other perspectives.

There is perhaps a need to include additional financial-related data, such as risk assessment and cost-benefit data, in this category.

The Customer or Market Perspective 

Recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business.  These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good.

In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and the kinds of processes for which the Bank is providing a product or service to those customer groups.

The Business Process Perspective 

This perspective refers to internal business processes.  Metrics based on this perspective allow managers to know how well the Bank is running, and whether its products and services conform to customer requirements (the mission).  These metrics have to be carefully designed by those who know these processes most intimately; with Bank’s unique missions these are not something that can be developed by outside consultants.

In addition to the strategic management process, two kinds of business processes may be identified: a) resource management processes, and b) core business processes.  Resource management processes are business processes that both acquire and provide appropriate and sufficient resources to the other business processes.  By their nature resource management processes are the province of management.  They are also often more difficult to measure directly or to find appropriate peer group comparisons.  Core business processes are the processes that develop, produce, sell, and distribute an entity’s products and services.  These processes do not follow traditional organisational or functional lines, but reflect the grouping of related business activities.  Core business processes because of their often more repetitive nature are easier to measure and benchmark using generic measurements and peer group comparisons.

Mission-oriented processes are the special functions of executive management, and many unique problems are encountered in these processes.   The support processes which  are more repetitive in nature, and hence easier to measure and benchmark using generic metrics.

The Learning and Growth Perspective 

This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement.  In a knowledge-worker organization such as a Bank, people -- the only repository of knowledge -- are the main resource.  In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be in a continuous learning mode.  Banks sometimes find themselves unable to identify, recruit, and hire new qualified knowledge workers, and at the same time there is sometimes a lack of training of existing employees.  This is a leading indicator of 'brain drain' that must be reversed.  Metrics can be put into place to guide managers in focusing training funds where they can help the most. In any case, learning and growth constitute the essential foundation for success of any knowledge-worker organization.

Kaplan and Norton emphasize that 'learning' is more than 'training'; it also includes things like mentors and tutors within the organization, as well as that ease of communication among workers that allows them to readily get help on a problem when it is needed.  It also includes technological tools; what the Baldrige criteria call "high performance work systems."

A Balanced Scorecard for a Bank - at the Strategic Level

Financial	Customer or Market
Return on Equity Return on Assets Net Interest Margin Revenue Mix Revenue Growth Return on Equity Growth	Market Share (by Segment) Customer Retention Customer Satisfaction Survey Customer Acquisition
Process	Learning and Growth
Error Rates Investment in Technology Number of complaints Cross sell ratio	Revenues from New Products Product Development Cycle Employee Survey Revenue per Employee Employee Turnover Training Hours per Employee

Figure 2

A Best Practice Bank will typically have from 15 to 20 Key Performance Indicators (KPI’s) to measure the success of its strategy.

Summary: A Good Balanced Scorecard Tells the Story of Your Strategy

• Every measure is part of a chain of cause and effect linkages
• Every measure ultimately ties to financial results
• A balance exists between outcome measures (lagging indicators) and performance drivers (leading indicators)
• It includes performance drivers which will redefine a process or change behaviour