Ron Carucci, Co-founder & Managing Partner at Navalent
Ron Carucci is co-founder and managing partner at Navalent, working with CEOs and executives pursuing transformational change for their organizations, leaders, and industries. He has a thirty year track record helping some of the world’s most influential executives tackle challenges of strategy, organization and leadership.
From start-ups to Fortune 10’s, turn-arounds to new markets and strategies, overhauling leadership and culture to re-designing for growth, he has worked in more than 25 countries on 4 continents. In addition to being a regular contributor to HBR and Forbes, and has been featured in Fortune, CEO Magazine, BusinessInsider, MSNBC, Inc, Business Week, Smart Business, and thought leaders.
AUTOMATED EPISODE TRANSCRIPT
[00:00:01] You're listening to Scaling Up Services where we speak with entrepreneurs authors business experts and thought leaders to give you the knowledge and insights you need to scale your service based business faster and easier. And now here is your host Business Coach Bruce Eckfeldt.
[00:00:23] Welcome everyone this is Scaling Up Services, I’m Bruce Eckfeldt. I'm your host and our guest today is Ron Carucci and he is managing partner and co-founder at Navalent. He's also author of many books most recently rising to power and he's written extensively for publications like Harvard Business Review Forbes and other leading business magazines and publications.
[00:00:42] And I'm really excited to have him on today to talk a little bit about leadership where leadership goes right and where leadership goes wrong and some of the challenges that leaders face and how we can overcome them. So with that Ron welcome to the program.
[00:00:55] Hey Bruce how are you. Thanks for having me.
[00:00:56] So why don't we talk a little bit about a little bit about your background and how you got into this. I know you've been working with leaders for decades several decades but a little bit of your background and how you got into the position of working with leaders on on leadership on management and effectiveness.
[00:01:11] Sure go ahead out out me as old Thanks.
[00:01:15] Gosh you know I began my career in a very different part of the world and in the arts but changed careers. I had the fortune to realize that I bought easily in my early 20s. So I switched careers to Organizational Behavior and Organization psychology because I realized that that would never be bored because the story always changes every day think since I was I was a kid I always had a natural fascination with human endeavor you know organizing it at scale what would happen when people came together to get something done whether it was you know I was the kid that organized a stickball game in our neighborhood I was the kid that organized fundraisers or block parties and I just loved the the natural phenomenon of what happens and people would cooperate and come together to work. So began my career early inside organizations but quickly realized that the idea of telling the truth to leaders wasn't always welcomed the way I assumed it would be when it came to getting better. And so I realized that if I was going to express my real passion for organization it was going to have to be by not being part of one. And so I went external and started my own consulting practice and then eventually brought that to a larger firm and 14 years ago a couple of friends and I decided we could do it on our own. So we began Netherland so the focus of an avalanche.
[00:02:21] Who do you typically work with and how do you typically help them. What does an engagement look like and how are you. What kind of sort of facets of leadership and organizational change are you grappling with.
[00:02:32] Yeah. So we sort of sit at the intersection of strategy and organization and leadership. So where those two things intersect where I started has been articulated or presumably articulated but maybe not that well organized and you organize the assets the position around executing that strategy and leaders have to guide that it's in that troika where we sit and help senior leaders business unit presidents CEOs division leaders or sometimes even functional leaders stand that journey up and get it going or they've gotten themselves into a ditch and we have to tell them out yeah that's where we play and we recognize that that's a it's a very systemic journey. There's no silver bullets. Typically we may not be the first one day to help that we may be following on from others who have tried things that didn't work or the organization wasn't able to metabolize the solutions. And so we begin all of our our journeys of transformation with a really really thorough MRI of the organization. Interesting to get a real lay of the land every leader of course tells us they know what the problem is which of course always leads us to ask seriously. Well then if you know what the problem is why is it not solved. So typically we help them say yes you probably know what part of the problem is you probably have a dangerously symptomatic view of some some aspect of it that are true but obviously there are things you're missing or you wouldn't have called. So you say we'll go in and get under the hood and with a really systemic look at how all of the organization is operating all the stories it's telling itself about its performance or its customers or itself.
[00:03:58] All of the ways leaders are not cooperating across the boundaries of the organization all of technologies the processes or the lack of them you know typically one of the main many things we find in the mid-cap world where your listeners hail from is we typically find things very akin to the the hundred million dollar company trapped in the body of a 30 mined our organization. So you describe that more detail I think I know what you mean but give us so they grew they grew but they didn't scale right so it's kind of like the teenage boy wearing his dad's suit standing there where you can hear the seams of the organization ripping apart where they've taxed the organization design they have so far beyond its utility that they just as you can hear crumbling happening at the edges and leaders don't know what to do because they're so far behind the scaling curve they've added a lot of top line revenue but the cost structure has followed behind it and they bloated themselves because they didn't really think about they never took the time to stop working in the organization long enough to work on the organization. Yeah. And now they're you know there is a you know several thousand camps just on wheels trying to keep things going.
[00:05:04] Yeah yeah I mean it makes total sense. I mean I think we're constantly kind of talking with leaders about the about the lag you know about the organizational lag that that ends up happening in most cases particularly in kind of high growth know quick rough situations where you really have to think about what does the organization look like in six. 12 months. And how do we start putting that stuff in place now. Not. How do we get the organization where it should have been. Twelve months ago today you had that getting ahead of that is is probably one of the biggest challenges I see for four leaders.
[00:05:32] How much do you kind of think about or how much are you kind of diagnosing or working with leaders on kind of the way the organization design versus the leadership that the leaders kind of internal state or mindset or like I guess how much of this is what's going on in the organization versus what's going on inside the leaders themselves.
[00:05:52] So it's a that's a fabulous question. Bruce and I don't distinguish between the two. I absolutely think both of those things are so interrelated that when you treat them separately you actually do harm. If you don't understand that the inner landscape of a leader is a reflection of the external landscape he's leading or she's leading it and vice versa. You can't treat them as if they're not the same.
[00:06:11] Are they causal one way or the other or they interplay is.
[00:06:14] Is that a dynamic from your point of view a highly causal with each other. Right. So you have a leader who is highly neurotic and and second guess his decision making and slow and risk averse. You're going to have a culture that's the same way. If you have a governance design that does not as you'll be decision right to the right places you're going to have a leader who can't make decisions. Yes right. So. So you've got to look at them both as as as into highly interconnected our code and our code language for that. When we think about changes as we call it within and between among. So you've got to diagnose change deep within the leader and their own landscape in their own narratives and how they think leadership between leaders and their colleagues between functions. You know the classic marketing sales supply chain logistics finance and R.A. H.R. and everybody between and then you have to have a month. You have to have changed systemically in the culture in the strategic understanding and the governance processes and the technologies. Any of you if you're only doing change on one or two of those you're going to fail. Right so you've got to have change on all three simultaneously and you've got to keep them very connected. And so often practitioners with great intentions and good people go in and they major in one right so that their coaches within the team both that build as they do the between the culture change experts among them and and they leave the others to their own demise and change fails.
[00:07:34] Now it actually reminds me so I came out of technology and spent a lot of time on software systems and then coaching software teams and then onto companies and leadership teams around software solutions. And one of the principles we had or ideas that kept coming up was if you want to understand how a piece of software is structured as you look at the structure of the team you're right that the team the organizational structure will be reflected in the actual structure of the processes and procedures and stuff in the code. And I think that's the same truth with the organization as at the how the team or how their organization is physically structured ends up becoming reflected into the processes the procedures the way it executes the business. And that could be for good or bad.
[00:08:13] Oftentimes that's a great point. And they don't even realize the bad part of that right. So if the organization design is its first and foremost an embodiment of a strategy. Right. So you know I can't tell you how you should be organized until you tell me what you intend to do and it still fascinates me Bruce how often I ask leaders in Camp wrote to me Tell me about your strategy and I get all the counterfeits right. I get the mission statement the mission statement the values I get the product I get that the annual operating plan I get the financial goals I get the business plan they gave their the forecast sales forecast I get Costco claw.
[00:08:45] That's the strategy.
[00:08:47] I'm like that's all very interesting but that doesn't tell me who you are. Tell me what somebody who does what you do why a customer would pick you over them. What is it that you do that special that's interesting and unique that sets you apart from the other choices that your customers have. And it can tell me that you have no strategy and that those are the fundamental building blocks of an organization design. And when they're not you get your strategy and your nation so far a field that you have leaders stretching between the two to try and keep them connected which eventually they can't do. So the gravitational pull of a dysfunctional organization almost always wins. And then you can you see this how many times do you go around the table at the senior team level and say what's our strategy and you get as many different answers as you have people.
[00:09:27] And that's a that's that is a classic classic for its discussion.
[00:09:32] I think many many of us in this kind of organizational performance world you know get is in all cases where we'll have know a person leadership team and we'll get nine different strategies. Gotcha.
[00:09:44] And they can't believe it. They think what happened you know. Of course each other thinks that they're right and there is just need to align around them.
[00:09:51] Yeah actually I think I think I would be happy if if each one of them thought they were right I think I'd be happy. It's the ones that I got that even know they got to make. They make a stab at it. They're actually not confident in their answer. It's almost even worse is that when they realize they don't have a strategy and then there's a question of what have we been doing for the last week.
[00:10:09] We just finished a 15 year a 15 year longitudinal study that their leaders on additional honesty to find out what predicts lying. What predicts people withholding the truth. And one of them was a lack of strategic clarity that when you lack a sense of shared identity among your organization you are three times more likely to have people withhold or distort the truth and the line I got from what from it. One of my interviewees was when we don't know who we are. We make things up.
[00:10:34] So hold on. Let's let's unpack that a little bit.
[00:10:36] So in the study you found that the survey was specifically looking at sort of organizational truth telling or give us some more details on the study.
[00:10:44] So it was a 15 year longitudinal study with 33 interviews to look to to understand the factors of beyond individual character beyond the individual. You know ethical choices what other systemic reasons why people lie or withhold the truth. And one of the questions I ask leaders all the time. Well you know we all had embers you'll have cubic yards you'll have some device in our organization that gathers leaders on some periodic basis to look back at what's happened and to look ahead at what's about to happen. And I ask them how often during your routine organizational inspection process like that. Do you find yourself thinking privately during someone else's presentation. This is such bull. But of course no one ever says anything and we all do we all sit and listen to the sales guys are the R.A. guys or the financial guys get up and blow smoke. And it's not because they're sociopaths. Right. So there must be something about the endemic system that is in this is the way you have to survive in this room right now. So I wanted to know what those were. I am tired of hearing it's the culture I want to understand what would predict if we wanted to have more honest whole organizations.
[00:11:46] What would predict whether or not causes people to withhold or distort the truth. And now we found four factors. What. One of them was strategic clarity.
[00:11:56] It seems like some of that some of that is but I guess I want to make sure I understand the point or the premise of it.
[00:12:02] So I guess I mean I suspect there's a slight difference between you know not telling the truth and not knowing kind of how to tell the truth in terms of. I mean I certainly have seen organizations that you know someone gets up and present something and upon later inspection it's clear that people at the meeting had serious objections or questions but either were at some level work or didn't have the tools or the ability or the frame or the process to even counter them vs. you know they they knew what to say. They knew how to counter them but they didn't. They chose not to take action. I mean you see a difference between that situation.
[00:12:38] Absolutely not. But the fact that I can explain it with your lack of skill doesn't excuse it. There's this lack of skill are we and we control the we're in one of the dimensions in our physical model that we control for psychological safety whether or not it was improving or declining. So there are lots of reasons why people don't do it. And typically they tell themselves the important internal narrative is it's either a waste of my time or it's not safe to do so I'll get there'll be retribution. And so interesting when you ask people well gosh if you're so afraid tell me who's been fired before. Tell me who's there written when they were truth. You did. There are no examples. Got it. So the internally self-imposed narrative of it's just not safe to do so is just crap. I'm so tired of hearing senior leaders. If you're at that table it's your job.
[00:13:26] Yeah exactly. Yeah I think that's the point that I think must most leaders get is that it's almost a fiduciary responsibility if you're going to take this job and you're going to represent the company that's what you do. That's your role.
[00:13:36] And it doesn't matter if you're leaders a teller if you can. It doesn't matter what the reasoning is. If you have a point of view that could spare your organization heartache in the future then you're obligated to bring it up it doesn't matter what slack you get back it is a matter how how skilled or unskilled are comfortable or uncomfortable you are doing it. Those are all interesting but not relevant. If you're at that table you know what. When I had I had people ask me all the time because it's my job you know people my clients rely on me to tell them the unvarnished difficult to hear compassionate and blunt truth about their organization and people asked me how do you how do you find the courage to do it. And I for me this is not an ash issue of courage. It shouldn't require courage to be truthful. It's kind of compassion. I said my biggest fear is not telling my leader that they're naked. My biggest fear is a leader came back to me three months later when they're in a ditch say you knew I was naked I didn't say anything. Yeah that terrifies me far more than whatever flack I might get back but by having a hold of a mirror. They don't want to look in because then every day I can help them avoid a catastrophe. But to know that I could've prevented a catastrophe and didn't that's immoral.
[00:14:48] So what are some of the other factors you mentioned the study looked at for. I think you've mentioned four different four different factors. What were some of the other ones.
[00:14:55] Yes. So accountability when you're accountability systems are perceived to be unfair or unjust on the way they measure contribution. And I don't mean compensation I mean just measurement of contribution as unfair people lie to embellish their accomplishments and hide their mistakes. And when that's the case a three and a half more times more likely to have people while with all the truth governance structures.
[00:15:15] So when there's no place for the truth to be told when they're no convening of leaders where. Difficult complex choices and difficult decisions can't be made. It goes on the ground you afford. It's more likely to have Ebola. I would hope in truth. And the last surprisingly was cross-border wars. Right so when you have crossed departmental rivalry a little fiefdom you are a fiefdoms in silos. You are six times more likely to have people with Holder's attitude because when now we have dueling truths and we have dual interests mind will prevail. And so all up to it's cumulative so all up all and if those four things are true about you you are 16 times more likely to find yourself on the cover of The Wall Street Journal or New York Times in a story you'd never wanted to be in.
[00:15:52] No. Yeah.
[00:15:53] So how does one kind of sort through those those potential scenarios and then tackle them in terms of actually making changes to the organization. I mean is there is there a clear process that one can take to go through this.
[00:16:06] You know so the first thing is if so let's go back to the first one. If you lack strategic clarity be honest about it right. If you have words that don't match your actions. If you have a mission statement or a value statement that people are not saying you're living by align them. And don't just announced your strategy you know embed it make sure every single person in your organization has a clear line of sight between what they do and who you say you are to yourselves and your marketplace and make sure their own sense of purpose. This was the other fascinating thing in this study we found was we've heard for all ever you know 70 percent of the workforce is disengaged 50 percent have no sense of purpose and we're buying foosball tables and free lunches to try and fix it. The reality is people's sense of meaning gets covered up when they feel duplicitous when they feel like they're behaving in ways that contradict who they are. They hide so simply create a clear line of sight between the meaning they want to derive from them. The reason they're on the planet and the work they do and you'll have everybody engaged. Secondly designing your governance structure makes sure you distribute decision rights according to your strategy so that the right leaders are around the right tables with the right authority and resources to execute. Don't have anything rolled at the top. Don't have all pathways leading a CEO don't lead it so confused that everybody's planning the game show whose decision is it anyway. I'll walk out of the meeting going.
[00:17:22] Is that your decision. No of course that's to be it because anybody gets to say it was mine. I could do what I want. If you have accountability structures where nobody's giving feedback on their performance no one understands what they're being held accountable to do. It feels like it's the metric de jure and it's a rotating effort of who who is what yardsticks being used to beat me up today to fix it. And lastly if you have rivalries at the seams force those functions to find a way to understand their co created value right you don't know if you have competing metrics where sales believes one thing and marketing believes another and they're different they're in their natural different timelines and you are allowing that rivalry to split what the customer experience is. Fix it right. There is something at the intersection of marketing and sales that gets created. That's valuable to your marketplace that neither those could do themselves to make those functions. Figure out what that is and create it and measure them against it. Don't allow the scene that the fungus of dysfunction to grow in the seams between functions especially if it's something competitive. It's really something you're betting your mission on or betting your strategy on. And it's a capability. Those functions have to create. Don't leave it to chance. Which is so often what our organization designs do. They assume that will will grow everything on a functional capability and will assume that the higher order things like innovation at the intersection of marketing RFD and customer insights will just take care of itself.
[00:18:35] How can you drive accountability. How do you I guess how do you create accountability across across those different fiefdoms. I mean you put is this about putting people in charge of that is putting metrics that align people above and beyond their functional silos.
[00:18:48] Well so it's a couple of things. First of all if you organize are organized around functions versus customers or processes or regions or geographically you have to recognize that those seams are a thing right. So if innovation is a capability let's use that as an example at the intersection of candy marketing and customer insights. That's those three things are a separate thing apart from the fact that home rooms they emanate from. So when. What is that. So if innovation is the work that those two things contribute to. How does that work come together. How is it linked. Is it a governing process. Is it. Is it a product of the process. Is it a set of metrics it's a probably a variety of things. But if that scene isn't designed to integrate those three contributions into innovation it's not going to happen right. Because because when when those people show up at that table I'm just the ambassador from marketing I'm just the ambassador from customer insights. I'm not here to innovate but if you tell them together you're accountable for innovation and will measure you that way and we'll reward you that way and we'll hold you accountable for that and you create the audition organisational mechanisms that allow them to innovate. Now you've designed the scene to be something other than the sum total of the parts.
[00:19:53] What's an example of how a metric or of a process that would hold you say those three organizations accountable for something like innovation.
[00:20:01] So I've got an article on HP are called had a permanent was of course departmental rivalries made it out into our process our toolkit for how we do scene design what we call it a seamstress. The first thing is the first thing you have to do is understand what the value is right. So at the intersection of whether it's you know. Logistics and supply chain could be cost. Or was it and in finance at customer experience. Could be at the intersection of customer success sales marketing and product. But whatever. Whenever the muscle is understand what that value is and what is divided it great together. Make them define it. Then the question becomes what are you going to measure against right so what are the KPI. What are the capabilities you have to be good at to deliver against that. And how will you. What metrics will you all share and that's really the key thing is share. Right now one of us can outperform the other. Right to these metrics we're all held accountable. And if there are contradictions. So for example if marketing and RFD and product development are in innovation what are held accountable for a metric that that somehow conflicts with an individual marketing goal. Things that don't allow that contradiction to exist.
[00:21:07] So you push that you see it make them responsible for resolving the contradictions.
[00:21:11] You bring them together to do that work. You don't have the answer. You ask them how well so how will conflicts be resolved how will decisions get made. Who owns what decision right about what part of the process and how will you maintain trust and what are your service level agreements. So to each other you owe things right to to one another completely. What are those service level agreements and how will you agree and then you sign them in blood.
[00:21:32] I like this idea that it really is like the senior folks or the person above all that is really kind of the facilitator or the coach or the folks that are at the table trying to work these things out rather than the rather than the adjudicator or the you know the person that's solving it for them. It's the person that helping helping them reach a solution that works for everyone and that's a long strategy.
[00:21:51] Well I think again if you assume if you if you've chosen and I think many midcaps you know in their 50 million to 20 mind hour range are are largely geographically landlocked so most of their functional designs they might be they might be also have a matrix of customer segments sizes that you're going to segment different customers at that point in your maturity but largely there are scenes that being managed right there are intersections of organizations and people ability to cross borders and work cross functionally they are not working well and they don't know what to do and so they bring in the team builders to do collaboration work. I can't tell you the number of times like a call to do workshops on collaboration for people who could collaborate just fine. There isn't anything about the organization that would tell you to do that. So we treat it as if it's an interpersonal conflict or it's some kind of a competitive thing or it's a personality set of quirks. When in reality is the organization is encouraging them to be at odds with each other.
[00:22:42] Yeah they've set them up by design they've set them up for setting up and so unless you solve at that level you're just gonna be putting all wallpaper over overall wallpaper and and frustrate them.
[00:22:53] But most organizations don't understand that seams are things they're not just the result of two functions being adjacent. And if you're not going to manage them it seems as if they have valued that's where all of our competitive value is delivered. It's at intersections. No one function or one group in any organization holds all the competitive value. And so you don't understand where that competitor first of all go back to the strategy. If you haven't defined what that competitive value is and you've seen that before Bruce many haven't yeah. And it really doesn't matter without your seams because it's all good fungus growing into the cracks.
[00:23:23] Yeah. Well you know you're never gonna have you're never gonna successfully resolve your seams without a set of strategic priorities and strategic plan so I think all things need back.
[00:23:33] So if you haven't done that work you know don't look at the symptoms of dysfunction you're seeing downstream with leaders being neurotic and organizations being dysfunctional. That's way downstream from the the root cause of the fact that nobody knows who you really are.
[00:23:45] So let's circle back to that so. So strategy so I guess what is the either process or the the the components that need to kind of be in place for a company to have develop a successful strategy.
[00:23:59] How do you approach the process inside particularly its kind of mid-market companies that are typically struggling struggling with this question of what what really is our strategy.
[00:24:09] So we have a process called Strategy mapping and everybody is different when we do this because we call it your business models and because it is your strategic imperatives there's way too much jargon about it but at the end of the day I don't want to I don't really care about your mission or mission statement Those are interesting but then I think for me I want to know what are the three or four things that differentiate you that you will be known for that you got. And then I can look at your budget and see the investments in the work that you will do that that you know for sure that gets you. You put a dollar in finance comes in the door and then I want to know what are the capabilities that that support those differentiators. What do you have to be really good at organization to do that. And it starts by a very simple look at all the work you do. Most leaders try and create this false sense of egalitarianism in their culture that we're all created equal and they don't realize that it's a dangerous thing to do right. We divide up work in three categories competitive competitive enabling and necessary competitive rookies. That's the work you do. That's your secret sauce. It's what it doesn't matter who's doing it it's just that it's working that gets done.
[00:25:08] Now it sets you apart from competitors. It is the magic. Yeah there's about 15 to 20 percent of the work that's done. Of course your organization. There's another category called competitive enabling it's the work that directly supports that rockets and other. 20 percent of the work and then about 50 to 60 percent of your work work you do is necessary. It keeps the lights on keeps you out of jail. You know you better than anybody else. You maximized at maximum efficiency but you're competitive competitive and work you maximize from optimal impact and effectiveness your best talent your all your resources to get this important invested there and that's what makes you good and you have to keep that work separated and to look around organizations you see people who are mixing half their day spending doing necessary work and have their data and competitive work least trying to. Which of course never gets done because the urgency of the necessary work always prevails over the more complex work of competitive work. And so you you mix all that stuff together and you dilute the entire ability of your organization to compete. So you've got you first have to sort it out and identify it separate it identify what makes you distinct and what you've to be good at.
[00:26:08] And then from there begin your organizational work to build on and that includes the seems suggesting that the actual resource allocation the organizational design resource allocation roles are specifically map to one of these three categories and you don't want to have a role that is trying to do more than one right.
[00:26:26] Well in some case that's ideal in some cases of course they're going to be some teams or groups who have some portion of their day has a little bit of each. But the reality is you have to know that. So people are making tradeoffs you know would they have discretionary time they are 10 hours in a day or eight nine hours in a day to do their work. You know you have to help them understand when you have to trade off always Aramis out of doing the competitive work.
[00:26:48] Yeah. It's interesting because that was going to be my follow up is like I think one of the challenges as particularly you know when you're early on that growth process you just you don't have the resource capacity to have fully dedicated people to some of these to these areas. So you're you're gonna you're gonna have folks that do have allocations to Paris but I think I haven't quite thought about it this way.
[00:27:07] Well one of the exercise I typically do with teams is we do their plan. We do their week. What does your week look like and we design the ideal week and it's really about time boxing and finding and protecting what I call defensible calendar your your dedication to these areas.
[00:27:19] And when when you've time boxed set know something the strategy is like you know hell or high water you're going to spend that time on strategy and that's typically where these groups fall down is that they keep saying okay this week I'm going to do five hours strategy. You know it's Friday at four o'clock and they haven't done an hour.
[00:27:36] Right. And then and most don't even know what that means anyway. Right. I mean should I do. Should sit back and put my feet up on the desk and think big thoughts. Yeah. Most I check our financials. They don't even know what doing that work means because the first and foremost at the top of the house you can't do it alone. Right. The strategy is not a solo act. And so you know the work that it takes to actually keep to work on your organization and not in it and keep things competitive to keep things aligned to keep you home if you're talking about things that are going to happen next week you're not being strategic. Right exactly. Tell executive teams at some point your goal needs to be that you're not talking about anything in your organization when you're together that's going to happen in the next three to six months. If you are you know an operations team that's great someone should do that work but you're not you're not the executive team you're not minding the future. But so often the tyranny of the urgent draws them down into the organization down into details they don't want to be in down into levels of micromanagement where they're creating all kinds of decision compression right where you know you think about three intersecting pipes of an organization a strategic systemic coordinating system and an operating system your operating system is all your frontline folks getting stuff done your coding system is typically your middle organization who have to do all the lateral coordination across departments and your senior strategic system is supposed to be mind the future but when when you elevate up to those systems as your career grows and you take all that work with you which many of them do and don't let it go you create this compression where the pipe is getting squished in the middle and then you have the classic you know information goes up decisions come down to reality where you've slow the organization down you've created everybody's worst nightmare as you go in from startup to grow up you've created the bureaucracy we all feared you haven't designed for optimal performance and that's it is such a classic journey of slow death for our nation as they get to that place of you know hundred million to one million dollars and then and then we just get tired and so they'd say let's just tell the company yeah know it's a drain as a drain and it's a it's a slog.
[00:29:33] So I think I was reading some of your work earlier and I think that another concept that came up in there that I thought was really interesting and important win when you look at strategic work is this is the the need to focus external and I think a lot of teams end up getting so sort of internally focused and navel gazing around what their business is doing. How do you help or how does a team maintain or develop a focus for external.
[00:29:55] When it comes to developing strategies for now I just I just met with the client over the weekend he just took it to the president President job it's a retail company it's a great company doing great work and they have a very particular unique customer niche that they serve. And he was all excited about everything he was telling me and what they're up to and the exciting growth plans and great things on the horizon. And he mentioned their target customer.
[00:30:20] And I said I am happy to be female.
[00:30:24] And I said Who. Who is she. And whereas her voice get out there in your stores. Get out there in watch her. Listen to her talk to her. Where is her voice. How is her voice shipping your decision making. And it's astounding to me how many people the voice of the customer is. It's a data set. It's an insight. It's a you know some analytic Yeah but it's not a real person. And if you are not out there shopping your competitors listen to your customers in your where your customers and your people interact on the phone listening in to customer service calls or in your channels or in your warehouses or or were watching how people are metabolizing what you do to your service or your product you are forfeiting one of the most richest data sets that could ever be you could ever have to inform your choices. If you don't know what your competitor is or if you don't know it's a point of decision what one of your customers are consumers is doing when they choose between you or somebody else. It is so common. I'm sure you've seen a tuberous where the thing you think you're selling is not what your customers buy buying. Yeah exactly right. You may be selling interesting solution they're buying a cool version of a cheap product or vice versa. And so absent that information you're going to scale on a lie. You're going to grow yourself on top of a false truth or a partial truth that eventually will topple you.
[00:31:42] Yeah. No it's at some point you're gonna make a poor decision right because you're gonna be basing it basing that decision on a set of assumptions aren't understanding or frame that is just not not really correct. I'm not really on line or fully what the market is.
[00:31:53] It's flawed and the dangerous thing is if you've done something really really right that flaw can go on for a long time.
[00:31:59] Yeah. Well yes it's a false sense of security.
[00:32:03] And you think democracy. What do you think that revenue growth. Well. Typically at that point it's your sales force defunding strategy whenever they're selling that's strategy. And your you know you can go years on that partial truth or falsity before you hit a headwind or you hit a ditch and you realize oh crap. We we took the wrong is it about 80 miles ago. And I've been driving on the wrong road for two years and we have no idea where we went wrong.
[00:32:29] Totally lost. No no I doubt we're going to have to. I think I think we both seen it several times and yeah I think that that whole kind of muscle around how to think strategically how to bring in a strategic insights understanding you know competition understanding or customer and really being decisive about that stuff it's hard. Mel you know I don't I get it. It's not it's not easy but it is the element of what a leadership team is really doing in terms of guiding the company.
[00:32:52] You're absolute right. It's really really hard work. But you know what. It's also your job. So learn to do it right. So it's our when we do our rising to power that research on executives assuming higher altitudes. You know we've known for 20 years that more than half of them fail in the first 18 months. That was the reason we were back because we wanted to understand why are they so ill prepared. How could they be labeled as high potential rock stars in the middle and so many will become a disaster at the top within a year. And we wanted to find out what that was and so often they all I mean so many in our research said they were not prepared for the challenges of the highest altitudes of their organizations. And so the you know the answer is getting ready in the middle to start preparing people for broader responsibilities in the middle so that when you need to push them up they're prepared. They don't bring the middle with them. And in the top down but it's starting to. You can't if you wait till your first assignment as vice president to begin your preparation to be a vice president.
[00:33:44] You're you're probably not going to do too well you're six months too late at a minimum. Well there's a bit of pleasure we're going to have time here.
[00:33:52] I'm sure there's probably three or four episodes that deal out these topics if you want to get more information about you about Navalent about rising to power what's the best way to get more information.
[00:34:02] Yeah. So if you want to keep chatting come visit we're at Navalent and the Navalent.com, we have gone to great great videos and white papers and articles and our books are all there. So come out with a great blog with a free quarterly magazine you can sign up for that has content information about all these all these issues. We have a free e-book on leading transformation. So our playbook on with in between among is available at Navalent.com/transformation if you want to check that out if you're in the middle of guiding transformation you can use it as your sort of companion accompaniment and also in Twitter it out rocker Richie and I'm also on LinkedIn. So please keep in touch.
[00:34:38] Perfect. Ron I'll make sure that all of those links and handles are on the show now so people can get through and reach you.
[00:34:44] Thank you again for taking the time. It's been a pleasure. I've learned a lot. Great discussion. Bruce My pleasure thanks for having me.
[00:34:50] You've been listening to Scaling up Services with Business Coach Bruce Eckfeldt. To find a full is a podcast episodes. Download the tools and worksheets and access other great content. This is a Web site that scaling up services dot com and toll free to sign up for the free newsletter scalingupservices/newsletter.