Tactical and short-term advantage can be achieved by lowering production cost through greater operational effectiveness. In a competitive environment, all firms are encouraged to maximize operational effectiveness. As a result, operational effectiveness is a necessary but insufficient condition for achieving strategic and long-term advantage.
It is, however, also possible to lower costs in ways that transcend operational effectiveness. Such methods can significantly differentiate the enterprise. If this differentiation is sustainable, it will produce a strategic advantage.
In business – and perhaps in much of life – we usually define cost as the value we must give up in order to generate a product or service. This cost informs our pricing. But Porter encourages us to also consider the cost customers experience that goes beyond our price. What is the customer’s cost to access and use your product or service? If you can reduce the overall cost to the customer, you should be able to achieve a strategic advantage.
Hertz has lowered my cost of accessing their services. Through their Hertz Gold program I save a great deal of time and time is a cost to which I am very sensitive. Unfortunately for Hertz this service is highly replicable. Most other rental agencies have an identical service. Hertz has been attentive to my indirect costs of accessing their service, but their response is not differentiated, and does not create a strategic advantage.
My wife purchased her car – that she loves – from a dealership that seems unable to conveniently schedule regular service. She has observed that the dealership from which we purchased my car is friendly, flexible, and accessible. I always deal with the same service manager. I am regularly advised of upcoming service needs and costs. The service-oriented dealership has created for itself a significant strategic advantage in terms of our next car purchase. We will pay a premium price to enjoy a lower overall cost, where cost is determined by price, hassle-factor, and time expended. The buyers’ cost is more than your price.
My wife and I do most of our banking with the nation’s largest financial institution: Bank of America. But really we bank with Doris. Our bank has changed hands several times. Doris has provided continuity and personalized service. When the huge institutional system breaks-down – as it often does – we call Doris to fix it. If Doris would move, we would try to move our banking with her, despite all of the direct costs of doing so, because working with Doris saves us so many indirect costs. I worry about what will happen when Doris retires. But as long as Bank of America has Doris – or can develop new generations of Doris-like professionals – they have a significant strategic advantage in capturing our business.
Michael Porter explains, “In seeking opportunities to lower buyer costs, a firm must chart in detail how its product moves through or affects the buyer’s value chain, including the buyer’s inventory, handling, technology development, and administrative activities. It must also be familiar with all other products or inputs its product is used with, and understand how its product interfaces with them. The firm must also identify every other value activity in its value chain that affects the buyer’s chain.” (Porter, Michael E.; Competitive Advantage, Free Press, 1985)
Throughout the Exodus story Moses – or God working through Moses – is constantly providing products and services for which the “customers” do not directly return value. Manna from heaven, water from a rock, and military victory can be seen as loss-leading investments to create and preserve a market. In part this demonstrates a problem in making an analogy between the product that God offers and that offered in a commercial setting. God’s bottom-line has a different definition of profit and loss than our own.
But God is certainly promoting a product – a way of living – and Moses is a kind of Chief Operating Officer, product manager, and salesman rolled into one. Again and again, Moses positions the product as responding to real needs, improves access to the product, and even suggests variety in some aspects of the product that customers otherwise would not recognize. Given the promised – and demonstrated – benefits, Moses keeps the buyers costs very low.
Despite the innate value of the product – and the skill of Moses in positioning the product – it is still misunderstood and undervalued by many customers. The product is simply rejected by a significant proportion of the market. Fantastic service is quickly taken for granted. The experience of Moses is worth remembering the next time you grow frustrated in opening a new market.
On more than one occasion God is ready to give up on the chosen target market and start-over from scratch (Exodus 32: 9-14), but Moses successfully argues it is still possible to achieve the goals set out at Mt. Horeb. From time to time God does, in fact, eliminate a portion of the market that has proven itself absolutely insensitive to the value being offered. (Exodus 32: 35) But, all-in-all, the story of Exodus can be seen as a very successful effort to cultivate a long-term supplier-customer relationship. The shared value chains now extend over 3000 years.
Saturday, February 20, 2010
Friday, February 19, 2010
Identifying what Others Value
Michael Porter’s theory of differentiation requires close attention to what he calls the value chain or value activities.
Ultimately, all differences between companies in cost or price derive from the hundreds of activities requires to create, produce, sell, and deliver their products or services, such as calling on customers, assembling final products, and training employees. Cost is generated by performing activities, and cost advantage arises from performing particular activities more efficiently than competitors. Similarly, differentiation arises from both the choice of activities and how they are performed. Activities, then, are the basic units of comparative advantage. Overall advantage or disadvantage results from all a company’s activities, not only few. (Porter Michael, What is Strategy? Harvard Business Review, November-December 1996)
We are what we choose to do.
Reducing cost through increased efficiency is a defensive game. It may be a very effective game in the short-term, but it does not produce a sustainable long-term advantage. Operational efficiency and effectiveness – the foundation of cost competition – is replicable by many competitors. While some competitors will fail to meet industry benchmarks, others will succeed and eliminate your cost advantage.
Operational effectiveness is necessary, but alone it will not create strategic advantage. Porter writes, “Competition based on operational effectiveness alone is mutually destructive, leading to wars of attrition that can be arrested only by limiting competition… Continuous improvement has been etched on managers’ brains. But its tools unwittingly draw companies toward imitation and homogeneity. Gradually, managers have let operational effectiveness supplant strategy. The result is zero-sum competition, static or declining prices, and pressures on costs that compromise companies’ ability to invest in the business for the long term.”
To achieve a sustainable strategic advantage there is a need to decrease cost or increase value delivered in a manner that goes beyond efficiency and clearly differentiates one enterprise from another. Porter makes the point that this kind of strategic differentiation is helpful to customers, helpful to the differentiated enterprise, and can result in a much more stable structure for the entire community of competitors.
But simply being different is not good enough. Eccentricity is not a strategy. To effectively involve others in pursuing goals and engaging troubles – yours or their own – it is necessary to be different in a way that is recognized as valuable.
Porter argues that “strategic positions can be based on customers’ needs, customers’ accessibility, or the variety of a company’s products or services.” In each case, choosing a sustainable strategy requires understanding what the customer values. Not every form of greater access is valued. More and more variety can actually confuse and frustrate. Even authentic responses to real needs can sometimes be discounted.
A high percentage of people with chronic disease fail to observe simple protocols for drug use that will improve their lives and even save their lives. These customers do not value what they need. Most of these people are more likely to consume what they need if the protocols are reinforced by personal communications with health-providers, volunteers, family members or others. Participation in user groups will also encourage most people to engage their troubles more effectively. The social interaction is highly valued, even while the life-saving product is undervalued.
You can discover what others value by observing what they choose to do.
Early in my career a client, specifically a Senior Vice President for Marketing, hired the firm I was with to assess how the enterprise could increase market penetration. The client was closely owned but managed by professionals. The Chairman of the Board was one of the owners and represented the owners’ interests. During the analysis and consultation I met twice with this man. The Chairman’s interaction with me was polite, vague, and rather banal. I wrote him off as a largely uninvolved watchdog who would support any decision that would increase profits.
My final presentation to the executive team was straightforward. Both product studies and market studies pointed to the same set of choices. Greater market penetration was possible, the risks were low, the necessary investments affordable, and the likelihood of sustaining the increased market position was strong. Well before I was two-thirds through the presentation, it was clear the findings were in serious trouble. The Chairman’s questions and comments were skeptical, grumpy, and increasingly angry. He did not value greater market penetration. Rather, he feared it. The fact that our study had found it was possible was a negative.
Shortly after the presentation the Senior Vice President “resigned.” My firm was not retained for further work. The enterprise continued to pursue its traditional market. A quarter century later it continues to be a small player in what appears to be a sustainable market.
I had failed to accurately define my client. I had failed to even ask what my real client valued. I had offered a solution to a problem that the client did not recognize. Precisely because my “answers” were straightforward – even obvious – I should have asked myself why the client had not already embraced at least some of the answers. Why is the client behaving as it is? What should that behavior tell me about what the client values? How can I frame my choices to fit the choices my client is already making?
Today I perceive that the Chairman had a very clear sense of his true self and what he valued in the true self of his enterprise. He was not especially articulate or forthcoming, but neither did I probe very effectively. The assignment I was given could have contributed to the true self that the Chairman had in mind. It did not because I was insensitive to my client’s definition of value.
Moses was a much wiser man. When Moses was given his assignment on Mt. Horeb we certainly would empathize if he had simply said, “yes sir” and scurried away to make sense of the assignment without the intimidating thornbush flaming away. Instead, he anticipated the troubles ahead and pushed God to help him deal with the reality he perceived.
God promises Moses, “I will be with you.” (Exodus 3:12)… “But Moses said to God, ‘If I come to the Israelites and say to them, “The God of your ancestors has sent me to you,” and they ask me “What is his name?” What shall I say to them?” (Exodus 3: 13) Moses is trying to better understand the motivation behind this assignment. What is the identity of – the nature of God – and what does this identity suggest about the origins and intent of the assignment? What does the boss value? God answers. Moses listens and seems ready to accept the intention he perceives. Then Moses shifts his attention to how this assignment may be received by his “clients.” Moses speculates to God, “But suppose they do not believe me or listen to me, but say, “The Lord did not appear to you.” (Exodus 4:1) Moses needs sources of authority and legitimacy. He pushes for it. God gives Moses tools that will help him communicate the credibility and value of what is offered to the Israelites.
Finally Moses turns to his own skills and capacity. He reminds God that he is not an eloquent speaker. At this point God is getting impatient with the push-backs and commands, “Now go, and I will be with your mouth and teach you what you are to speak.” But Moses knows himself too well to accept this brush-off. We read Moses saying, “’O my Lord, please send someone else.’ Then the anger of the Lord was kindled against Moses.” How many of us know ourselves so well that we would argue in this way with our secular boss, not to speak of God? But in the Exodus story God relents and assigns Aaron as spokesperson and deputy to Moses.
Moses gave careful attention to each aspect of the value equation: internal value, external value, and personal value. Unless the value we deliver is responsive to the value that others expect and respect, it is not – in fact – valuable. Unless the value is consistent with our true self, we will be unable to deliver the value.
Ultimately, all differences between companies in cost or price derive from the hundreds of activities requires to create, produce, sell, and deliver their products or services, such as calling on customers, assembling final products, and training employees. Cost is generated by performing activities, and cost advantage arises from performing particular activities more efficiently than competitors. Similarly, differentiation arises from both the choice of activities and how they are performed. Activities, then, are the basic units of comparative advantage. Overall advantage or disadvantage results from all a company’s activities, not only few. (Porter Michael, What is Strategy? Harvard Business Review, November-December 1996)
We are what we choose to do.
Reducing cost through increased efficiency is a defensive game. It may be a very effective game in the short-term, but it does not produce a sustainable long-term advantage. Operational efficiency and effectiveness – the foundation of cost competition – is replicable by many competitors. While some competitors will fail to meet industry benchmarks, others will succeed and eliminate your cost advantage.
Operational effectiveness is necessary, but alone it will not create strategic advantage. Porter writes, “Competition based on operational effectiveness alone is mutually destructive, leading to wars of attrition that can be arrested only by limiting competition… Continuous improvement has been etched on managers’ brains. But its tools unwittingly draw companies toward imitation and homogeneity. Gradually, managers have let operational effectiveness supplant strategy. The result is zero-sum competition, static or declining prices, and pressures on costs that compromise companies’ ability to invest in the business for the long term.”
To achieve a sustainable strategic advantage there is a need to decrease cost or increase value delivered in a manner that goes beyond efficiency and clearly differentiates one enterprise from another. Porter makes the point that this kind of strategic differentiation is helpful to customers, helpful to the differentiated enterprise, and can result in a much more stable structure for the entire community of competitors.
But simply being different is not good enough. Eccentricity is not a strategy. To effectively involve others in pursuing goals and engaging troubles – yours or their own – it is necessary to be different in a way that is recognized as valuable.
Porter argues that “strategic positions can be based on customers’ needs, customers’ accessibility, or the variety of a company’s products or services.” In each case, choosing a sustainable strategy requires understanding what the customer values. Not every form of greater access is valued. More and more variety can actually confuse and frustrate. Even authentic responses to real needs can sometimes be discounted.
A high percentage of people with chronic disease fail to observe simple protocols for drug use that will improve their lives and even save their lives. These customers do not value what they need. Most of these people are more likely to consume what they need if the protocols are reinforced by personal communications with health-providers, volunteers, family members or others. Participation in user groups will also encourage most people to engage their troubles more effectively. The social interaction is highly valued, even while the life-saving product is undervalued.
You can discover what others value by observing what they choose to do.
Early in my career a client, specifically a Senior Vice President for Marketing, hired the firm I was with to assess how the enterprise could increase market penetration. The client was closely owned but managed by professionals. The Chairman of the Board was one of the owners and represented the owners’ interests. During the analysis and consultation I met twice with this man. The Chairman’s interaction with me was polite, vague, and rather banal. I wrote him off as a largely uninvolved watchdog who would support any decision that would increase profits.
My final presentation to the executive team was straightforward. Both product studies and market studies pointed to the same set of choices. Greater market penetration was possible, the risks were low, the necessary investments affordable, and the likelihood of sustaining the increased market position was strong. Well before I was two-thirds through the presentation, it was clear the findings were in serious trouble. The Chairman’s questions and comments were skeptical, grumpy, and increasingly angry. He did not value greater market penetration. Rather, he feared it. The fact that our study had found it was possible was a negative.
Shortly after the presentation the Senior Vice President “resigned.” My firm was not retained for further work. The enterprise continued to pursue its traditional market. A quarter century later it continues to be a small player in what appears to be a sustainable market.
I had failed to accurately define my client. I had failed to even ask what my real client valued. I had offered a solution to a problem that the client did not recognize. Precisely because my “answers” were straightforward – even obvious – I should have asked myself why the client had not already embraced at least some of the answers. Why is the client behaving as it is? What should that behavior tell me about what the client values? How can I frame my choices to fit the choices my client is already making?
Today I perceive that the Chairman had a very clear sense of his true self and what he valued in the true self of his enterprise. He was not especially articulate or forthcoming, but neither did I probe very effectively. The assignment I was given could have contributed to the true self that the Chairman had in mind. It did not because I was insensitive to my client’s definition of value.
Moses was a much wiser man. When Moses was given his assignment on Mt. Horeb we certainly would empathize if he had simply said, “yes sir” and scurried away to make sense of the assignment without the intimidating thornbush flaming away. Instead, he anticipated the troubles ahead and pushed God to help him deal with the reality he perceived.
God promises Moses, “I will be with you.” (Exodus 3:12)… “But Moses said to God, ‘If I come to the Israelites and say to them, “The God of your ancestors has sent me to you,” and they ask me “What is his name?” What shall I say to them?” (Exodus 3: 13) Moses is trying to better understand the motivation behind this assignment. What is the identity of – the nature of God – and what does this identity suggest about the origins and intent of the assignment? What does the boss value? God answers. Moses listens and seems ready to accept the intention he perceives. Then Moses shifts his attention to how this assignment may be received by his “clients.” Moses speculates to God, “But suppose they do not believe me or listen to me, but say, “The Lord did not appear to you.” (Exodus 4:1) Moses needs sources of authority and legitimacy. He pushes for it. God gives Moses tools that will help him communicate the credibility and value of what is offered to the Israelites.
Finally Moses turns to his own skills and capacity. He reminds God that he is not an eloquent speaker. At this point God is getting impatient with the push-backs and commands, “Now go, and I will be with your mouth and teach you what you are to speak.” But Moses knows himself too well to accept this brush-off. We read Moses saying, “’O my Lord, please send someone else.’ Then the anger of the Lord was kindled against Moses.” How many of us know ourselves so well that we would argue in this way with our secular boss, not to speak of God? But in the Exodus story God relents and assigns Aaron as spokesperson and deputy to Moses.
Moses gave careful attention to each aspect of the value equation: internal value, external value, and personal value. Unless the value we deliver is responsive to the value that others expect and respect, it is not – in fact – valuable. Unless the value is consistent with our true self, we will be unable to deliver the value.
Thursday, February 18, 2010
Applying Value
In the last forty years of his life Moses found his true self. Each choice he made that was consistent with this true self brought greater strength, both to himself and his community. Moses was not free of doubt, he argued with God, he made mistakes, and sometimes he chose badly. But with each good choice he created greater possibilities.
In the process Moses became a great leader. He overcame powerful adversaries. He kept his people focused on long-term objectives. He introduced an effective strategic framework that continues to be used by individuals and enterprises centuries later. He created the future. Moses chose God’s will, and God blessed Moses.
But this did not guarantee success or result in an easy life. Moses faced all the typical challenges – and more – of any leader. There were several external threats. But it was internal dissatisfaction and dissension that preoccupied Moses. Even late in his life Moses continued to be troubled by his “stiff-necked,” “foolish and senseless,” “perverse and crooked” people. Moses tended not to focus on the external threats ahead but, rather, on the persistent internal threats that could undermine how the external threats would be engaged.
Some religious traditions teach the transcendence of trouble. They hold out the promise of an earthly paradise. This is not the story of Moses. The books of Moses are full of trouble. The life of Moses is an example of how one engages – not escapes – from trouble. Becoming his true self was the foundation for dealing with trouble, but was not sufficient. Moses had to develop and deploy sources of comparative advantage in dealing with both internal and external threats.
Knowing and being his true self – creating, empowering, loving, refraining, framing, and redeeming – gave Moses real power and significant potential. But how these strengths are used to engage trouble is where potential becomes reality. The most poignant failures – personal or commercial – are often the result of great strengths that are not applied, and sometimes not even recognized.
Innate value is not always recognized value. In the 1950s U.S. private railways might have recognized their great strength as trusted purveyors of personal transportation and begun to offer air travel as well as rail travel. They might have integrated air and rail travel for an even more convenient and cost-effective system than we have today. But the rail companies did not use this strength and were eliminated from the long-distance travel sector. With its origins in catalogue sales, Sears might have been an early adopter of e-commerce. Instead this is yet another commercial channel Sears has largely yielded to Walmart and others. How many times have you met individuals with impressive talents that are astoundingly underutilized? Examples of lost potential are pervasive.
Becoming your true self is innately valuable. A community or enterprise that crafts a true self has enormous potential. But to fulfill this potential the true self must be applied to solving problems, engaging troubles, and making the future.
Moses applied his true self through a variety of techniques. Many of these techniques reflect key components of differentiation identified by Michael Porter, a professor at the Harvard Business School. The behavior of Moses and Porter’s theory especially overlap in the following seven areas:
• Identifying what others value;
• Lowering buyers cost;
• Raising buyers performance;
• Linking your value with what others value;
• Using symbols and signals to give tangible meaning to intangible value;
• Changing the rules; and
• Ensuring sustainable unique value.
If you feel unappreciated by your spouse, if you are undervalued by your clients, if your customers do not see a difference between you and your competitors, it may be the result of not living consistently with your true self. It may be that you are undermining your core value with bad choices.
But we see in the life of Moses a profoundly true self who was still the target of complaints, abuse, and rejection. Moses responded with what Michael Porter calls a “differentiation strategy.” An effective differentiation strategy will result in recognition that you, or your enterprise, are unique at something that is valuable to the audience that matters to you: spouse, clients, children, customers, neighbors, voters, or whoever.
An effective differentiation strategy will not eliminate all troubles. But it will provide a means for engaging those troubles in a way that reinforces your true self and moves you – and potentially your community – forward in an Exodus-like journey to your ultimate goals.
As Moses demonstrates, this unique value must be consistent with your true self. This strategy is absolutely not about being all things to all people. But it does mean expressing your true self in ways that are sensitive to the needs, wants, and current conditions of others. It is a way of applying the profound potential of your true self in reaching out to, helping, serving, and leading others.
In the process Moses became a great leader. He overcame powerful adversaries. He kept his people focused on long-term objectives. He introduced an effective strategic framework that continues to be used by individuals and enterprises centuries later. He created the future. Moses chose God’s will, and God blessed Moses.
But this did not guarantee success or result in an easy life. Moses faced all the typical challenges – and more – of any leader. There were several external threats. But it was internal dissatisfaction and dissension that preoccupied Moses. Even late in his life Moses continued to be troubled by his “stiff-necked,” “foolish and senseless,” “perverse and crooked” people. Moses tended not to focus on the external threats ahead but, rather, on the persistent internal threats that could undermine how the external threats would be engaged.
Some religious traditions teach the transcendence of trouble. They hold out the promise of an earthly paradise. This is not the story of Moses. The books of Moses are full of trouble. The life of Moses is an example of how one engages – not escapes – from trouble. Becoming his true self was the foundation for dealing with trouble, but was not sufficient. Moses had to develop and deploy sources of comparative advantage in dealing with both internal and external threats.
Knowing and being his true self – creating, empowering, loving, refraining, framing, and redeeming – gave Moses real power and significant potential. But how these strengths are used to engage trouble is where potential becomes reality. The most poignant failures – personal or commercial – are often the result of great strengths that are not applied, and sometimes not even recognized.
Innate value is not always recognized value. In the 1950s U.S. private railways might have recognized their great strength as trusted purveyors of personal transportation and begun to offer air travel as well as rail travel. They might have integrated air and rail travel for an even more convenient and cost-effective system than we have today. But the rail companies did not use this strength and were eliminated from the long-distance travel sector. With its origins in catalogue sales, Sears might have been an early adopter of e-commerce. Instead this is yet another commercial channel Sears has largely yielded to Walmart and others. How many times have you met individuals with impressive talents that are astoundingly underutilized? Examples of lost potential are pervasive.
Becoming your true self is innately valuable. A community or enterprise that crafts a true self has enormous potential. But to fulfill this potential the true self must be applied to solving problems, engaging troubles, and making the future.
Moses applied his true self through a variety of techniques. Many of these techniques reflect key components of differentiation identified by Michael Porter, a professor at the Harvard Business School. The behavior of Moses and Porter’s theory especially overlap in the following seven areas:
• Identifying what others value;
• Lowering buyers cost;
• Raising buyers performance;
• Linking your value with what others value;
• Using symbols and signals to give tangible meaning to intangible value;
• Changing the rules; and
• Ensuring sustainable unique value.
If you feel unappreciated by your spouse, if you are undervalued by your clients, if your customers do not see a difference between you and your competitors, it may be the result of not living consistently with your true self. It may be that you are undermining your core value with bad choices.
But we see in the life of Moses a profoundly true self who was still the target of complaints, abuse, and rejection. Moses responded with what Michael Porter calls a “differentiation strategy.” An effective differentiation strategy will result in recognition that you, or your enterprise, are unique at something that is valuable to the audience that matters to you: spouse, clients, children, customers, neighbors, voters, or whoever.
An effective differentiation strategy will not eliminate all troubles. But it will provide a means for engaging those troubles in a way that reinforces your true self and moves you – and potentially your community – forward in an Exodus-like journey to your ultimate goals.
As Moses demonstrates, this unique value must be consistent with your true self. This strategy is absolutely not about being all things to all people. But it does mean expressing your true self in ways that are sensitive to the needs, wants, and current conditions of others. It is a way of applying the profound potential of your true self in reaching out to, helping, serving, and leading others.
Wednesday, February 17, 2010
Moses Creates and Communicates Differentiated Value
Since February 1 we have considered how Moses recognized the spiritual and practical potential of differentiation. We have seen how a leader can use a group's stories, origins, failure, purpose, promise, and transcedent potential to create a readiness for and recognition of differentiation.
Next we reviewed six habits of differentiation: creating, empowering, loving, refraining, framing, and redeeming. Consistently practiced, these habits produce a powerfully differentiated identity.
Once we have found our true-self - a uniqely differentiated individual - we can seek fulfillment in relationship with others by consistently applying seven techniques:
1. Identifying what others value,
2. Lowering the cost of others,
3. Raising the performance of others,
4. Linking your value with what others value,
5. Using signals and symbols to clarify your value,
6. Changing the rules regarding what is valued, and
7. Ensuring sustainable unique value.
Next we reviewed six habits of differentiation: creating, empowering, loving, refraining, framing, and redeeming. Consistently practiced, these habits produce a powerfully differentiated identity.
Once we have found our true-self - a uniqely differentiated individual - we can seek fulfillment in relationship with others by consistently applying seven techniques:
1. Identifying what others value,
2. Lowering the cost of others,
3. Raising the performance of others,
4. Linking your value with what others value,
5. Using signals and symbols to clarify your value,
6. Changing the rules regarding what is valued, and
7. Ensuring sustainable unique value.
Tuesday, February 16, 2010
I Am Who I Am
In the Books of Moses the framework for fulfillment – the means for individuals and organizations to claim their true self – includes six fundamental characteristics: creating, empowering, loving, refraining, framing, and redeeming. These are among the principal characteristics of God. Because we are created in God’s image and likeness they are among our principal characteristics. Our true self – as individuals or a community – will be bound up in living coherently with these characteristics.
We could be even more reductionist. We are meant to be creators. An early commentary on the Torah taught:
Everything that God,
The source and substance of all,
Creates in this world flows naturally from the essence of God’s divine nature.
Creation is not a choice but a necessity.
It is God’s nature to unfold time and space.
Creation is the extension of God.
Creation is God encountered in time and space.
Creation is the infinite in the garb of the finite.
To attend to creation is to attend to God.
To attend to the moment is to attend to eternity.
To attend to the part is to attend to the whole.
To attend to Reality is to live constructively. (Pirke Avot, Chapters of the Fathers, 6:2)
What we create we are inclined to value. Because it is our creation we delight in it and may value it as much as we value ourselves, which is Rollo May’s definition of love. In love we empower, in love we refrain from interfering with the others freedom to choose, in love we create and apply frameworks to inform our choices (and the choices of our beloved), and through these choices we are able to find fulfillment, and even to reclaim our identity from bad choices.
During his encounter with the burning bush, Moses asked to be told the name – really the identity – of God. Moses was told “I am Who I am” (Exodus 3:14) or, in some translations, “I will Be what I will Be.” Rabbi Joseph Telushkin offers that the phrase can also mean “I shall be as I shall Act.”(Talushkin, Joseph; Biblical Literacy)
The tense of God’s name – present or future – has been argued over with a depth of emotion and division that religious controversies seem especially to spawn. Given the all-encompassing nature of God, I advocate giving equal attention to both present and future. The ancient Hebrew texts capture this in the name given to God by the early writers: YHVH. Rabbi David Aaron explains that this is “an amalgam of the verb ‘to be’ in the past, present and future – was/is/and/will be.”
Peter Drucker argues that the fundamental role of management is to create the future. This is done through strategic planning, what Drucker calls the “entrepreneurial skill.” Further Drucker gives particular emphasis to the creative tension between the present and the future. He writes, “The future will not just happen if one wishes hard enough. It requires decision – now. It imposes risk – now. It requires action – now. It demands allocation of resources, and above all, of human resources – now. It requires work – now… There are plans that lead to action today – and they are true plans, true strategic decisions. And there are plans that talk about action tomorrow – they are dreams, if not pretexts for non-thinking, nonplanning, and nondoing. The essence of planning is to make present decisions with knowledge of their futurity.” (Drucker, Peter; Management: Tasks, Responsibilities, Practices). We create the future by making choices now.
We are each in a process of becoming. It is always so. Each new moment presents new opportunities, new threats, and new choices. We choose – even if we choose by avoiding decision – and the consequences of our choice contribute to a new creation.
In leading and managing an enterprise we face the same reality. Drucker writes, “We must make the present create the future.” This is the fundamental task of the enterprise. This task will preoccupy the leaders of the enterprise and defines the most important contribution that can be made to the enterprise by any of its stakeholders. The creation of a sustainable future requires that we make choices coherent with our true selves: creating, empowering, loving, refraining, framing, and redeeming.
We could be even more reductionist. We are meant to be creators. An early commentary on the Torah taught:
Everything that God,
The source and substance of all,
Creates in this world flows naturally from the essence of God’s divine nature.
Creation is not a choice but a necessity.
It is God’s nature to unfold time and space.
Creation is the extension of God.
Creation is God encountered in time and space.
Creation is the infinite in the garb of the finite.
To attend to creation is to attend to God.
To attend to the moment is to attend to eternity.
To attend to the part is to attend to the whole.
To attend to Reality is to live constructively. (Pirke Avot, Chapters of the Fathers, 6:2)
What we create we are inclined to value. Because it is our creation we delight in it and may value it as much as we value ourselves, which is Rollo May’s definition of love. In love we empower, in love we refrain from interfering with the others freedom to choose, in love we create and apply frameworks to inform our choices (and the choices of our beloved), and through these choices we are able to find fulfillment, and even to reclaim our identity from bad choices.
During his encounter with the burning bush, Moses asked to be told the name – really the identity – of God. Moses was told “I am Who I am” (Exodus 3:14) or, in some translations, “I will Be what I will Be.” Rabbi Joseph Telushkin offers that the phrase can also mean “I shall be as I shall Act.”(Talushkin, Joseph; Biblical Literacy)
The tense of God’s name – present or future – has been argued over with a depth of emotion and division that religious controversies seem especially to spawn. Given the all-encompassing nature of God, I advocate giving equal attention to both present and future. The ancient Hebrew texts capture this in the name given to God by the early writers: YHVH. Rabbi David Aaron explains that this is “an amalgam of the verb ‘to be’ in the past, present and future – was/is/and/will be.”
Peter Drucker argues that the fundamental role of management is to create the future. This is done through strategic planning, what Drucker calls the “entrepreneurial skill.” Further Drucker gives particular emphasis to the creative tension between the present and the future. He writes, “The future will not just happen if one wishes hard enough. It requires decision – now. It imposes risk – now. It requires action – now. It demands allocation of resources, and above all, of human resources – now. It requires work – now… There are plans that lead to action today – and they are true plans, true strategic decisions. And there are plans that talk about action tomorrow – they are dreams, if not pretexts for non-thinking, nonplanning, and nondoing. The essence of planning is to make present decisions with knowledge of their futurity.” (Drucker, Peter; Management: Tasks, Responsibilities, Practices). We create the future by making choices now.
We are each in a process of becoming. It is always so. Each new moment presents new opportunities, new threats, and new choices. We choose – even if we choose by avoiding decision – and the consequences of our choice contribute to a new creation.
In leading and managing an enterprise we face the same reality. Drucker writes, “We must make the present create the future.” This is the fundamental task of the enterprise. This task will preoccupy the leaders of the enterprise and defines the most important contribution that can be made to the enterprise by any of its stakeholders. The creation of a sustainable future requires that we make choices coherent with our true selves: creating, empowering, loving, refraining, framing, and redeeming.
Monday, February 15, 2010
Redeeming
But as the Books of Moses so clearly demonstrate, even the most inspired leader with the best frameworks will face lack of understanding, non-cooperation, and even outright rebellion. Individuals lose their way. Organizations choose the wrong path. Persistent pursuit of purpose is not always the quickest way to the Promised Land. Even good choices can result in failure.
Yet it is possible to move on. It is possible to recover. Devastating loss and enormous pain can be overcome. At the beginning of what would be a forty year trek through the wilderness, Moses sang a hymn with these words, “In your steadfast love you led the people who you redeemed; you guided them by your strength to your holy abode.” (Exodus 15: 13) Moses perceived that God was reclaiming the descendents of Abraham, Isaac, and Jacob. They had sold their inheritance to the Egyptians in exchange for temporary security. God came to reclaim ownership and to allow the nation of Israel to reclaim its true self.
The ability to recover from failure is an essential element of personal and professional effectiveness. In business circles, rather than redemption (too religious?) or recovery (too much emphasis on failure?), the favored term is resilience.
Diane Coutu, a senior editor at Harvard Business Review, writes that among individuals and organizations that survive failure and go on to thrive, there is “a cool, almost pessimistic sense of reality.” She goes onto explain, “Perhaps you are asking yourself, ‘Do I truly understand – and accept – the reality of my situation? Does my organization?’ Those are good questions, particularly because research suggests most people slip into denial as a coping mechanism. Facing reality, really facing it, is grueling work.” (Coutou, Diane L.; How Resilience Works, Harvard Business Review, May 2002
In addition to a fundamental realism, Coutou found two other common characteristics of resilient organizations and individuals: the ability to make meaning and the ability to make do. She writes, “The most successful organizations and people possess strong value systems. Strong values infuse an environment with meaning because they offer ways to interpret and shape events.”
My undergraduate college is a bit more than 150 years old. At least once in every generation it has faced down being closed. The principal tools of survival have been a sense of unique mission and meaning. Many stakeholders in the college have seen it as a crucial source of meaning in their own lives. If the college closed a whole web of meaning and memory would close with it. As a result, in times of crisis the college has survived by redeeming tokens of value it transferred to its alumni and others over the years. The college is never more attentive to its heritage and inherited culture than when it is in most trouble. At this point, the noble and courageous ability to recover may be, if anything, too much a part of the institution’s self-definition. It would be better for the college to recognize reality sooner and thereby reduce its dependence on redeeming value.
Resilient people and organizations make do, they are inventive, and they are creative. They grapple with reality by creating something new in response to the threat. In its most recent struggle to survive my alma mater reconceived its entire approach to tuition and financial aid. It communicated its policy changes in terms of a differentiated value that went well beyond price. It created meaning. As a result, it substantially and effectively differentiated itself in the market. This creative response generated strongly positive media and helped recruit one of the largest freshmen classes in the institution’s history.
We can survive failure and go on to thrive by being realistic, making meaning of our failure, and being creative. We may lose our way, but we always retain the ability to redeem our true self.
Yet it is possible to move on. It is possible to recover. Devastating loss and enormous pain can be overcome. At the beginning of what would be a forty year trek through the wilderness, Moses sang a hymn with these words, “In your steadfast love you led the people who you redeemed; you guided them by your strength to your holy abode.” (Exodus 15: 13) Moses perceived that God was reclaiming the descendents of Abraham, Isaac, and Jacob. They had sold their inheritance to the Egyptians in exchange for temporary security. God came to reclaim ownership and to allow the nation of Israel to reclaim its true self.
The ability to recover from failure is an essential element of personal and professional effectiveness. In business circles, rather than redemption (too religious?) or recovery (too much emphasis on failure?), the favored term is resilience.
Diane Coutu, a senior editor at Harvard Business Review, writes that among individuals and organizations that survive failure and go on to thrive, there is “a cool, almost pessimistic sense of reality.” She goes onto explain, “Perhaps you are asking yourself, ‘Do I truly understand – and accept – the reality of my situation? Does my organization?’ Those are good questions, particularly because research suggests most people slip into denial as a coping mechanism. Facing reality, really facing it, is grueling work.” (Coutou, Diane L.; How Resilience Works, Harvard Business Review, May 2002
In addition to a fundamental realism, Coutou found two other common characteristics of resilient organizations and individuals: the ability to make meaning and the ability to make do. She writes, “The most successful organizations and people possess strong value systems. Strong values infuse an environment with meaning because they offer ways to interpret and shape events.”
My undergraduate college is a bit more than 150 years old. At least once in every generation it has faced down being closed. The principal tools of survival have been a sense of unique mission and meaning. Many stakeholders in the college have seen it as a crucial source of meaning in their own lives. If the college closed a whole web of meaning and memory would close with it. As a result, in times of crisis the college has survived by redeeming tokens of value it transferred to its alumni and others over the years. The college is never more attentive to its heritage and inherited culture than when it is in most trouble. At this point, the noble and courageous ability to recover may be, if anything, too much a part of the institution’s self-definition. It would be better for the college to recognize reality sooner and thereby reduce its dependence on redeeming value.
Resilient people and organizations make do, they are inventive, and they are creative. They grapple with reality by creating something new in response to the threat. In its most recent struggle to survive my alma mater reconceived its entire approach to tuition and financial aid. It communicated its policy changes in terms of a differentiated value that went well beyond price. It created meaning. As a result, it substantially and effectively differentiated itself in the market. This creative response generated strongly positive media and helped recruit one of the largest freshmen classes in the institution’s history.
We can survive failure and go on to thrive by being realistic, making meaning of our failure, and being creative. We may lose our way, but we always retain the ability to redeem our true self.
Sunday, February 14, 2010
Framing
Not interfering with another’s freedom to choose is, however, very different from neglect. The power to choose is strengthened by being aware of the range of options available and any past experience with these options. We generally organize our experience into frameworks. Around the tribal fire and the water cooler and now in digital chat rooms, humans share frameworks as a way of exploring and deciding what to do.
The Books of Moses are also known as the Books of Law. The Ten Commandments are specific rules that create broad frameworks to inform individual choice. They set out the simple rules that will guide good choices. These frameworks, as already noted, can empower creativity and personal choice.
Creating such frameworks is another fundamental aspect of the human character. We are predisposed to reflect on our experiences, perceive patterns in our experiences, and derive principles from these patterns to guide future choice. Our minds, operating as story-engines, are alert to analogy and metaphor. We draw lessons from past experiences and use these lessons to frame how we address new problems. We often frame our current condition in terms of past experiences.
The more experiences we have, the more diverse our collection of analogies and metaphors, and the more subtle we can be in discerning the nature of our experiences and finding the best analogies and metaphors. When frames are used mostly to connect experiences, rather than separate experiences, they can be very helpful tools for problem-solving.
Again and again, God offers and Moses communicates a set of effective frameworks. Again and again the chosen people experiment with other frameworks and suffer the consequences. Toward the end of his life, Moses remarks:
The Lord your God will make you abundantly prosperous in all your undertakings… when you obey the Lord your God by observing his commandments and decrees that are written in this book of the law, because you turn to the Lord your God with all your heart and with all your soul. Surely this commandment that I am commanding you today is not too hard for you, nor is it too far away. It is not to heaven, that you should say, “Who will go up to heaven for us and get it for us so that we may hear it and observe it?...” No, the word is very near to you; it is in your mouth and in your heart for you to observe. (Deuteronomy 30: 8-14)
Based on their experiences, the effective frameworks are already known or can be known. Behaving consistently with the frameworks is a choice. Business leadership and management are both aimed at influencing this choice.
Among the principal roles of the business executive are the identification, communication, and encouragement to observe effective frameworks. John Kotter, a long-time professor at the Harvard Business School, notes that leadership and management are both focused on essentially the same three organizational activities: each “involves deciding what needs to be done, creating networks of people and relationships that can accomplish an agenda, and then trying to ensure that those people actually do the job.” (Kotter, John; What Leaders Really Do, Harvard Business Review, December 2001)
According to Kotter the leader must set a direction, “developing a vision of the future (often the distant future) along with strategies for producing the changes needed to achieve that vision.” The business leader must also align people. “This means communicating the new direction to those who can create coalitions that understand the vision and are committed to its achievement.” Finally the leader must motivate. The effective executive persuades people that the direction set out is worth their attention and the proposed frameworks are worth disciplined observance. Kotter notes that the leader motivates by “appealing to basic but often untapped human needs, values, and emotions.” In all of these actions the leader is trying to frame and explain reality. In outlining this three step system, Kotter is trying to offer us a helpful framework.
Moses communicated a long-term vision, he aligned people and alliances that were committed to the vision, and he worked to motivate broad enthusiasm for the vision. This is a framework for our own effective action. Fundamental to this blog is a notion that we can find in the ancient wisdom of the Bible the basis for creating effective frameworks for our personal and professional lives. Creating and using frameworks is fundamental to your true self.
The Books of Moses are also known as the Books of Law. The Ten Commandments are specific rules that create broad frameworks to inform individual choice. They set out the simple rules that will guide good choices. These frameworks, as already noted, can empower creativity and personal choice.
Creating such frameworks is another fundamental aspect of the human character. We are predisposed to reflect on our experiences, perceive patterns in our experiences, and derive principles from these patterns to guide future choice. Our minds, operating as story-engines, are alert to analogy and metaphor. We draw lessons from past experiences and use these lessons to frame how we address new problems. We often frame our current condition in terms of past experiences.
The more experiences we have, the more diverse our collection of analogies and metaphors, and the more subtle we can be in discerning the nature of our experiences and finding the best analogies and metaphors. When frames are used mostly to connect experiences, rather than separate experiences, they can be very helpful tools for problem-solving.
Again and again, God offers and Moses communicates a set of effective frameworks. Again and again the chosen people experiment with other frameworks and suffer the consequences. Toward the end of his life, Moses remarks:
The Lord your God will make you abundantly prosperous in all your undertakings… when you obey the Lord your God by observing his commandments and decrees that are written in this book of the law, because you turn to the Lord your God with all your heart and with all your soul. Surely this commandment that I am commanding you today is not too hard for you, nor is it too far away. It is not to heaven, that you should say, “Who will go up to heaven for us and get it for us so that we may hear it and observe it?...” No, the word is very near to you; it is in your mouth and in your heart for you to observe. (Deuteronomy 30: 8-14)
Based on their experiences, the effective frameworks are already known or can be known. Behaving consistently with the frameworks is a choice. Business leadership and management are both aimed at influencing this choice.
Among the principal roles of the business executive are the identification, communication, and encouragement to observe effective frameworks. John Kotter, a long-time professor at the Harvard Business School, notes that leadership and management are both focused on essentially the same three organizational activities: each “involves deciding what needs to be done, creating networks of people and relationships that can accomplish an agenda, and then trying to ensure that those people actually do the job.” (Kotter, John; What Leaders Really Do, Harvard Business Review, December 2001)
According to Kotter the leader must set a direction, “developing a vision of the future (often the distant future) along with strategies for producing the changes needed to achieve that vision.” The business leader must also align people. “This means communicating the new direction to those who can create coalitions that understand the vision and are committed to its achievement.” Finally the leader must motivate. The effective executive persuades people that the direction set out is worth their attention and the proposed frameworks are worth disciplined observance. Kotter notes that the leader motivates by “appealing to basic but often untapped human needs, values, and emotions.” In all of these actions the leader is trying to frame and explain reality. In outlining this three step system, Kotter is trying to offer us a helpful framework.
Moses communicated a long-term vision, he aligned people and alliances that were committed to the vision, and he worked to motivate broad enthusiasm for the vision. This is a framework for our own effective action. Fundamental to this blog is a notion that we can find in the ancient wisdom of the Bible the basis for creating effective frameworks for our personal and professional lives. Creating and using frameworks is fundamental to your true self.
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