Having a breakfast “meeting” at 830am on a Sunday takes quite a lot of commitment, but anyhow that is what I did this very Sunday morning. I was meeting an international banker and a strategic planner of a local yet global company.
Being a stickler for time I was up and ready to get to the meeting place by 745am. Being a realist, I full expected my morning company to be late. True to form a text message comes in to say if we can meet at 9. My reply “I’ll be there at 830, you take your time.”
The good thing about knowing your meeting is going to be delayed is that it gives you some quiet time, so I had 35 minutes of quiet time to do some reading while waiting…. The bad thing was this delay had a knock on effect on to my 10am meeting which I then had to postpone!
Anyway the long and short of the meeting, which was pretty much a one way “conversation” that means me talking and they listening, was that it gave me time to articulate thoughts floating in my mind and crystallize some of my thoughts as follows:
Lesson for Boards and Management:
1. All we know is what we know and by definition therefore, we don’t know what we don’t know.
2. Because we don’t know what we don’t know, we must always carry an open mind and not reject new thoughts or ideas that don’t fit into our sphere of knowledge
3. A lot of boardroom – management conflict arises because of 1. and 2. above, coupled with EGOS and McCleland’s Need of Power (nPow – personalized) – more of this some other time.
4. The need to understand history – every problem we have to day, is a consequence of a decision we made yesterday. The caution that is required in trying to understand decisions is that foresight is 50/50 while hindsight is 20/20. At the point the decision is being made, it may be the most correct decision (after all who wants to make a wrong decision) but as circumstances change the quality of the decision also changes. the most famous of all is Tun Mahathir’s decision to peg the ringgit and stop all offshore trading of the ringgit. At the time it was made, it seemed like the most wrong decision to be made but as time progressed it turned out to be the most correct. So it is truly time and circumstance that validates the quality of a decision and every decision must be examined in its true historical context.
5. Beware of people who paddle solutions! Only you can solve your problems and there are no 2 companies in the world that are in the exact same circumstance or situation where there is a generic solution available. The pedlar’s of solutions aka consultants – sell us hope of how beautiful we can be and it is out vanity and gullibility that opens our wallets to pour out millions of dollars on “hope“.
6. Every problem that we encounter today has a solution or has been solved. While this sound like a contradiction to the above, it is not. There are overweight people and there are overweight people who have become trim and fit people. The difference between the two is that the former has yet to find the internal discipline to become trim and fit while the latter has. The solution to the problem is known – how to go from overweight to fit and lean, its the application that is the challenge, hence only you can solve your problems, but that requires tremendous discipline. This discipline is the real heartbeat of transformation.
7. Learn how to correctly identify performance, as the saying goes, its not what you say, its what you do that counts. A lot of times we use historical aggregate figures as a proxy for performance without understanding the true performance drivers. If a company looses £3.5 million, it looks really bad, but if the £3.5 million works out, on a per unit basis of £750 per unit then it is pretty good especially when the historical loss per unit has been circa £1,750. Healthy leading indicators are much more important in a turnaround then historical lagging indicators like the P&L.
8. Make like for like comparisons: The leadership team of a local global company must be as strong, if not stronger than its competitors leadership team is wherever their global HQ is. Why, because tacit knowledge is a real competitive advantage that is hard to replicate and you can only win if a: you bring that knowledge in (e.g Carlos Ghosn and Nissan) or b; you change the rules of competition (e.g Dell vs IBM in PC’s.). All the time we spend learning the game, the competitors who wrote the rules and defined the game are moving forward and the relative gap gets bigger.
So to my two friends from this morning, this is a summary of our meeting and thank you for breakfast. As I said in this post, it is all about focus, clarity and process.