Rethinking Execution Episode 8: Dr. Rebecca Homkes on 3 Steps for CEOs to Thrive Forward

Hey everyone. Welcome to the new Economy. I'm Scott Levy, CEO and founder of Result Maps, where we're on a mission to help the world be its inspired best. That means helping CEOs and leaders build healthy cultures of relentless execution so you hit your numbers and thrive no matter where your people are or what challenges come your way. One way we do that is bringing you these sessions with leaders who've learned to thrive even as they navigated uncharted territory and thorny challenges. The idea is to get you actionable, learning you can put into practice immediately to lead and navigate at your best as you thrive forward. And thrive is not just a buzzword for our guest on this episode, Dr. Rebecca Homkes. It's a core part of the framework she uses to help CEOs rethink their power moves into the new economy. When we talk about rethinking execution, Dr. Homkes could easily write the book on it we but instead she stays focused on directly helping CEOs and executive teams navigate growth, innovation and scaling. Her resume and accomplishments fill more time than I have for this intro, so here are a few of the highlights. She's a lecturer on growth strategies and other topics at the London Business School. She consults to companies around the world through her boutique consultancy. She serves as director of the Global Active Learning Program for the Young Presidents Organization and is a director at the Strategic Management Center. She served as a fellow at the President's Council of Economic Advisors at the White House and is a previous fellow at the London School of Economics center for Economic Performance. Her work is regularly published in the Harvard Business Review, Forbes, Fortune Business Week, and some of the works we've featured previously. You can learn more about her remarkable body of work in the show Notes. Today we're going to look at what strategy is, what it isn't, and how CEOs must rethink their approach in order to thrive forward. I talk to a lot of CEOs who ask me what I mean when I refer to strategy. How do you define strategy?

I think the question of what strategy is is the place to start if we're going to talk about any of this stuff. Because I don't know who did this, how it happened, but over decades, Scott, it's been over complicated. There are about 40,000 books on strategy, by the way, in the English language. So you'd think we've got this thing nailed by now and we kind of lost the corescence, right? Strategy is about one thing, one thing only, and that is an articulation of how your organization creates value like that is it. Strategy is an articulation of how your organization creates value. Now, we buzzworded value creation too, so I like to break that down. All value creation is, is driving the biggest gap possible between two things. On one hand, your customer's willingness to pay your products, services and solutions. The other hand, your total cost of getting it to them. Right. So strategy is just about. And I'm using my hands, and I know it's awkward when we're not in person, but strategy is just about moving these two need apart and keeping them apart over time. And that anchor of value creation drives every single strategic decision that we will make in an organization. Because you're saying through strategic priorities, is it move a needle up, move a needle down, or keep them part of our time? And the trap that companies fall in is they're doing hundreds if not thousands of things which cause these needles to bounce. Because we think long lists of things make us look strategic. Where actually strategy is about those few things you're going to do that fundamentally drive those needles apart and keep them apart over time. So that's it. Strategy was. It is. It will always be about an articulation of how you create value. Now, I do think though, that that is sometimes hard to explain. So what I like to do is actually make it even simpler and say, yes, it's articulation of how you create value. But I like to put that into a simple story. And the reason that simple story is important is I need people and companies to actually remember what it is. The story that I tell to build a strategy is what's the situation and how's it going to change? What is success? So where are we going to play? How are we going to win? What could stop us? So what should we do? So it's just what's going on and what do we want to be? So where are we going to play? How are we going to win? What could stop us? What should we do? You answer those questions with a lens of value creation, you've got a strategy.

You talked about the distance between those. Can you just elaborate on that?

Yeah, absolutely. And really, this concept and I probably do this 100 times a day. Anyone I've been working with for years will probably have seen it thousands of times. But just this re anchoring in the needles is just so. Again, it's so important in all these decisions, you're trying to drive a gap between customers, willingness to pay for your products, services and solutions, and your total cost of delivering that value. Including the risk adjusted cost of capital. Right now, willingness to pay. This is not price cost. Willingness can pay, can be expressed in retention, it can be expressed in referral, it can be expressed in kind of loyalty. I mean, there's all of these other variables. So it's not a metric. Right. You decide as an organization, what are those metrics you're going to use. But you need to have kind of this customer angle and our cost of getting it to them. And the thing is what you'll see is if the needles are kind of trailing each other, we're not creating value. And so the real essence of value is driving them apart and then keeping them apart. And so when you hear value creation, value capture, I think it's sometimes difficult to understand conceptually. That's why I like to think about the needles. I'm creating value, but then I've got to capture that value and actually keep it for myself. Which is where, when you're on your strategy story, that question, how am I going to win? That's that value capture question. Once we create the value, what are we going to do that keeps it for ourselves?

I really like that idea too of a strategy story that simplifies it and makes it something that you can understand.

Right. But it has to be. So why, why do we have strategies that we do not care about being executed? Right. So if, you know, I get a lot of pushback when I say strategy has to be simple. Right. Because people will tell me, you know, God, I love simple. Rebecca love simple. But I just don't think you get my industry right. My industry is just so much more complex than like all of those guys industries. So there's no way we can have a simple strateg. And the notion is simple does not mean stupid. It's actually very difficult to get to a simple expression of your value creation story. And in organizations, we sometimes stop at this kind of complex level. Partly because, and I don't want to go too much on a tangent, so stop me. Partly because I think there's this temptation sometimes to show the organization our work. Because a good strategy does take time. You don't do a good strategy in a half day off site. And so I think there's a temptation sometimes to say, you know, we spent a lot of time on this, we made a lot of tough decisions. If I go back to the organization with one page, they're going to think we didn't do all this hard work. So it's like we're showing our work to the organization who doesn't care. They want the punchlines. How we create value, what are we doing? What's my role in it? But if that's too much, I always just remind myself, if it's complex, it's hard to understand. If it's hard to understand, it's hard to remember. If it's hard to remember, we don't do it. And again, let's go back to the first thing we talked about. If strategies are going to be executed, they have to be remembered, right? Otherwise we don't even have a fighting chance of this stuff getting done.

Is there one thing you see hold CEOs back when it comes to strategy and getting that strategy executed?

I mean, I think there's more than one thing, right? And let's separate those two things. So to get into a simple strategy, there's a lot. I think one of the big ones, and a huge frustration of mine, is confusing strategy with a financial objective. You know, a strategy is not to be a billion dollar company by 2022, or to make 500 million euro by 2023. Those are goals, those are objectives, they're not a strategy. And we've got to separate kind of an outcome, an objective from the actual strategy. And the way that I liken this, and if you'll bear with me, the way that I always liken this, and I'm a big sports person, the only other thing I'm passionate about besides strategy is sports favorite sport, American football. Right? Now, I've lived in London for 15 years now, Scott, and when I moved over here in 2005, I had to learn the harsh lesson that in the rest of the world, the word football means something different, right? It's not our football. But the one thing that's kind of cool is over here in the uk, the NFL players, they come over every year and they play a couple of games in Wembley, right? So the story I always think about is, you know, if you go to Wembley, let's say I brought some of my British bunnies to Wembley Stadium with me and they sat in the stands and they said, rebecca, I don't get your game. It's long, it's boring, it has thousands of rules. You stop all the time. Like, I just don't get it. Will you teach it to me now? Can you imagine me telling my buddy, yeah, absolutely. What I want you to do for the next three hours is look at the scoreboard at the end of the field. Like, see that scoreboard? Don't let your eyes leave the scoreboard. Now, at the end of the game. My buddies know the final score, which is important, right? But they don't know a single thing about my sport because they've been watching the scoreboard. The sport of football can only be understood by watching the series of choices that are made on the field. Each team makes a set of choices. They hit the field, they act out those choices, right? It's the same for your company. Now, that final scoreboard, that number matters. If you're going for an exit, that number really matters. But it is not the strategy. The strategy is the choices that are made on the field. That's the biggest trap. The second one is this notion of these kind of vague, passionate, rallying cries. You know, our strategy is to disrupt the market or to be the innovative leaders or to make a difference or, you know, maybe inspiring empirically, I don't think so, but like, who knows what we're actually going to do, right? So kind of I call it cheerleading, not strategy. And the third thing, and then we can pause and we've already kind of touched on it, is these big complex plans is. And look, the world is getting more complex, you know, empirically. And as leaders and organizations, we're like fighting complexity with complexity. But anyone who's ever done this knows that complexity is a terrible weapon for complexity. The only weapon we have against complexity is simplicity, which is something that we've already discussed. So kind of having as a financial objective having some vague cheerleading, you know, a big buzzword filled complex plan, those are some of the traps that I see in actually getting to the strategy.

Do you see one thing hold teams back that prevents them executing on a strategy?

When it comes to executing on a strategy, as far as the teams, I think actually it's a little bit difficult to disentangle this stuff, right? It's not a strategy problem, an execution problem, kind of a team problem. Let me say something first is that whenever we're kind of evaluating how something went, I always like to separate into three things, okay? Which is, did we get it right? Did we choose it right? Did we do it right? Because it is very tempting when the strategy, quote unquote, does not work to blame execution, right? And it's just simplistic and a bit annoying to say, you know, the whole good strategy without bad execution, all of that stuff is nonsense, right? There's actually three overlapping things. It's did we get it right? Like, did we articulate the beliefs about the world that were correct and panned out? Did we choose it right? Is the list of priorities we set based on Our beliefs, were those the right things to be working on and did we do it right? Did we, within our priorities, allocate the appropriate resources, staff the right team, keep accountability and alignment and discipline and all of those things. And I found companies tend to be the weakest at one of those three. And so constant evaluation. Did we get it right, did we choose it right, did we do it right Is very critical, right? Because if not, we can think, oh, well, the team had an execution problem, but we had the wrong set of beliefs which led to the wrong set of choices, right? So even actually we could have executed towards that and it would have been the wrong thing to do as an organization. Something else that I see a lot in teams and I see a lot, especially right now. That's why I'm talking about a lot right now, given the current issue is this notion of boundaries are so critical for a team. And what I mean by that is, and this is probably going to link a lot to some of the aspects of experimentation and agility as well. But this is a big issue for teams, is that two things. One, we give them a checklist almost, right? We say, okay, well here's the five things you need to achieve and here's your scorecard that we're keeping you to. Now, that's fine. If you're in a simple organization in a stable, predictable world and we kind of have direct lines of communication, that's fine. But if you're not in that environment, and I frankly don't know many companies who are, if you're in a complex organization in an unpredictable world and kind of spread across the world, when it comes to communication lines, what's the problem with a checklist is that I get to step four and step five is no longer relevant. So what do I do? I go back and ask my boss, but my boss doesn't know if he can take that decision. So he has to ask his boss. By the time I get the answer back, it's too slow. So I look as a team like I missed some opportunities, but actually it came back to the fact I didn't have the right playbook to executing an uncertainty. So the more companies can move from this notion of kind of scorecard or checklist based tactics and get to this notion of intent and boundaries. So intent is being super clear. What are we trying to achieve? You know, we need to achieve this by the end of the year. Crystal clear. This is the intent, this is your finish line. This is where we're going. And here's your boundaries. You've got to do that by staying within these boundaries. And we were geeking out a bit on military language and this is one of my favorite ones and it came from the Prussian war and the phrase I always use is we need to be across the river by noon on Monday. Why? It was going to rain Monday night and the river is going to flood. So what are your boundaries? Only march at night and keep half your supplies with you. What's our intent? Why does it matter? What are your boundaries? Then I'm going to step back as a general trust my troops to execute towards that intent within those boundaries. If the team is lacking any of those three things, they cannot make decisions. Why do we have strategy? So teams on a day to day basis can make decisions aligned with other people's decisions. So I know it's a long answer to a simple question about what gets wrong with teams and I think that it lack of actual clarity of their intent and boundaries. If you have the right team in place and you give them the boundaries, they will push up to and probably touching but not over those boundaries. And then we need these boundaries. Right? Is the more we're talking about growth or innovation or pushing things or experimentation, you need boundaries. It's a weird paradox of this whole uncertain world. But boundaries give you freedom, right? It's a very empowering thing. Boundaries give you freedom. I know you're thinking, but Rebecca, boundaries are offense. Like what are you talking about? Here's what I mean. If you give your leaders a boundary and you say here's your intent but stay within this boundary, I'm going to repeat a good leader will execute up to but not over that boundary. If you don't tell me where my boundary is, I'm probably not going to go around looking for one. Especially when if I look left and right, I see people losing their jobs all over the place. I'm staying right here doing exactly what I'm told to do. You want your company to actually have a growth strategy that doesn't work. So giving people clear boundaries, even if it's a smaller yard space than I want, I know exactly how much room I have. So I'll say again, boundaries give you freedom. If teams have those and they're not executing, then it's a resource issue or it's the wrong team.

Very interesting because one of the quotes we give to our customers when we're helping them set up those boundaries is Jocko Willink, who is a SEAL commander, quote, discipline equals freedom. I gravitated to that because as a jazz Musician. That's sort of the first thing that you learn is if you're not willing to embrace the structure and the rigidity, you're going to be all over the place. And so Branford Marsalis, his quote was something like, there's no freedom in freedom a man. You've got to have the guardrails, you've got to have the boundaries.

Those guardrails, constraints, parameters, call them what you want, they've got to be there. And here's what I've been learning the last couple of months. The most dangerous boundaries are the implicit ones. And what I mean by that is every organization has implicit boundaries, maybe around the brand, maybe around pet projects of the CEO, maybe around something we all think the board cares about, but they never really said maybe. It's around kind of a financial metric. They're not like out there. We're not calling out, here's your boundary. But we all kind of think they're there. So we're all interpreting it in a slightly different way, so we're not pushing anything. And so one of the biggest messages I've been saying over the last couple of months is those are the dangerous ones. Call them out, fight about them, make a decision, and then make it clear where that line is. And if that line's not there, give people freedom. Right. But that is one thing I encourage everyone to do. If you think you have an execution problem, where are those implicit boundaries? Because I guarantee you, if you think you have an execution gap, there's some.

Of those there and definitely fits with what I've seen in the marketplace. You've got a framework for dealing with uncertainty. In particular, you've evolved it for right now. I know a lot of CEOs have reached out to you and you've been helping a lot of companies in this. I think the range you work with is about 10 million to 100 million.

It really varies. So, I mean, I do quite a bit in the 10 to 100 million. I do another big set from a couple hundred million to a couple billion. And then. But I'm working right now with several of the kind of the 15 to 30 billion organizations as well. So it's proven relatively robust across all different sizes of companies.

Tell us a little bit about that survive, reset, thrive idea.

Yeah, and actually it did start with some companies right around that range, probably in like the 80 to a couple hundred, you know, a couple hundred, a little bit up there. So, look, here's what happens is that I've been thinking about this topic of growing through Uncertainty for a long time, right? This is what I love. I do growth strategy, developing, executing, innovating on strategy. So I'm working with a lot of CEOs who are trying to do this for their company. Second week of March, I'm on the phone back to back CEO all day long. Oh, Rebecca, I just, you know, why me? Why now? Everything was working. Like, why this? Like, what am I going to do now? And I hate to admit this, but I already have publicly. It was mere frustration that I finally said, guys, you know, you need to stop wearing, you know, the badge of an entrepreneur. If you can only grow a company when the market's going up, anyone can actually do that, right? You want to wear this badge of an entrepreneur CEO, you've got to be able to grow a company in the downturns as well. And you can. So let's talk about how you can. How are we going to do that? And it was just these series of conversations. My frustration finally saying, okay, guys, here's how we're going to look at this problem. We've got to do three overlapping things. You've got to survive, right? Because if we don't survive, the other stuff doesn't matter. You've got to reset because things have changed around us and then we're going to thrive on the other end. So survive, reset, thrive became the mantra. And I kind of put the other thoughts that I've been having the work, the methodology around these three pieces to help organizations think about, stabilize for the current period. Reset your strategy and plans, be prepared to thrive on the other end.

I'm so interested in the reset and thrive, but I know that it's really critical to make sure you survive. Talk us through a little bit about each other, each section.

No. And you're not an entrepreneur if you don't say that. And you know, I actually what I put in the email to guys that I would send it to, and it was in the email, Scott, is I know you just want to read the thrive portion, but you have to read the other stuff first. Right? And I purposely only added the executive summary when I started sending it to bigger companies. The entrepreneur version doesn't even have an executive summary. Because I want you to read the whole thing. That's how much I know this audience. Okay. Is that you only get to the thrive if you read the other stuff and you don't get the Cliff Notes. You've got to actually do the work of the first two pieces. Okay? So the main punchline of survive phase is this. You have to have a growth mindset when you approach the survive phase. I saw hundreds of companies call themselves a growth company, probably have blogs out there about their growth mindset. Approach the survive phase in kind of half mode, right? If you don't have a growth mindset and survive phase, let's not even really talk about the other two pieces. So that is a fundamental piece, which means. And look, some boards were at blame here too. You know, we're knocking the CEOs, but I actually had much more issue with boards getting in the way of the survive phase and kind of keeping the company there much longer than I thought they really needed to be. So survive phase is your playbook. Strong balance sheet, cash flow forecast, get your receivables in, look at your liabilities. There is a downturn playbook, right? If you run a company in 01, you run a company 0809, you've got board members who have. That's a playbook. Stop there, you're not going to thrive, right? What are our other power moves? You know, the real power move that companies that did it got ahead is what I call repurposing and partnering. And it's this very methodical process of going through every single asset, human asset, physical asset, digital asset, and saying, is this asset adding the same amount of value to my company as it did before March 2020? If not, who or what can it add value for repurposing teams, repurposing physical assets across the organization, across the ecosystem? If you can do that, right, we're getting a little bit ahead. The other notion is this, the learning velocity. You know, I saw companies just turn the learning tap off. And I'm not talking about L and D, right? I'm talking about this notion of we just need to get stuff done. Just kind of this heads down execution mode is one phrase that probably bothers me the most. And all of these strategy and execution phrases. Heads down execution is not growing a company through uncertainty. And the notion is learning is powerful. And the companies that were the steepest on the learning curve in early days are light years ahead of those that weren't. This is customer conversation. This is constant assumption testing. This is getting kind of started on the reset. This is incorporating a learning point into your weekly huddles or your daily agendas to re emphasize the point that I don't have the answers as a CEO, no one does. But I am going to help us learn our way out of this faster than every other company. It is about customer communication and it's critically about Employee communication and engagement. Employee engagement is not something I wrote a lot of articles about before 2020. Important, right? Important, but not strategic. And it really is now. And combining this notion of engaging the employees through the survive, reset thrive process has been one of the power moves a lot of CEOs have gone through as well. So put the playbook in. But I need a growth mindset. I really need you thinking about making the tough choices. We all know, and unfortunately many of us have gone through this before. Organizations can withstand one deep cut. It's very difficult to go through 100 smaller ones. And I think probably an example you've talked about with others. I think Brian Chesky from Airbnb probably wrote the playbook that we're going to look at the next time that we go through this very clear, very transparent deep cut. Some people thought it was too deep, but one of the biggest lessons he heard that he learned coming in was you never regret going too deep the first time. And you know, if they have a successful IPO later this year, which let's see, and hopefully they do again, I'll repeat, I think that will be the playbook for entrepreneurs in the next downturn.

A lot of what Brian Chesky's done becomes the playbook. I know he's inspired us a lot with just how we do non scalable things, how we did them early on. The other thing that comes to mind, we talked about football. In any team sport, nothing brings you together like overcoming adversity together and learning that you can trust your team.

And let's pull a strategy link in there too, because here's actually what I'm hearing is, you know, I'm getting a lot, not a lot, but I'm getting a handful of CEOs who will say, you know, I really kind of want to go through, you know, SRT strategy, Survive, reset, thrive. I really want to go through Survive, reset, thrive. But my team's just so pressed right now. My team's just so overwhelmed with the operations. You know, I can't put something else on my team right now. You know, their mindset's just not there. Now. There are going to be cases where that is true. There are going to be more cases. And I'm pushing back about this now where you are falsely protecting the organization. And by that I mean you are giving them protection of mindshare and saying because you think they don't have it where I guarantee you there are strong leaders in all these organizations who would love to engage in strategic dialogue and know that the organization is talking about the reset and the thrive out of this. So I would challenge CEOs who are saying this, and I personally have heard it dozens of times already, are you giving false air cover? And what you really need to be doing is saying, what can you do that no one else can? Let's keep that. Let's get everything else lower on the organization or frankly, automated, and let's get you working with me thinking about the reset. So I would love to see a lot more of that and a lot less of this false protection.

That brings up a question I hadn't planned on asking, but I'm reminded of one of our customers I reached out to and I was asking him how it was going and he felt like he's like, okay, we kind of have parts of this figured out, but I can't do the next three months. Like the last three months. We can't do that again. Does this framework help people get into that mode?

Yeah. Well, I think that's where the key principle of the learning and the survive mode will help, hopefully. Right? Is I think a lot of people came into March, April this year and frankly, I was probably one of them who did think this was going to be a short term, minor thing, but did not think that I would still be talking to you over video today and not making a plan to meet up the next time I was in Texas. Right. And so that kind of, okay, we just need to get through this attitude works. Right? Adrenaline can pump for a long time. Right. But when that adrenaline, well, dries up, it's going to be a deep, hard crash. Right. For those of us who have done any sort of extreme sport. So the companies that were learning during this, you know, doing the constant pre mortems, the constant post mortems, okay, what about this is scalable? What about this is learnable? Let's put this into the future playbook. Let's strengthen this company now to survive all the future crises as well. Those are the ones that's getting ahead. So the first thing is, did you really do your job on the survive phase? Right. Because no, most of us cannot do another quarter like we did in Q2 of this year. And that's where I challenge, like, pressure, that that learning point in that phase is so much the power move because that builds it in more. And one of the challenges that I give to organizations in the reset kind of the overlap of survive to reset is if you don't have a clear strategic priority on kind of operational efficiency or the equivalent for your business, of course Made it more specific. You are making the assumption as a team that your current levels of efficiency and cost basis are enough to not just get you through this crisis, but prepare you for the next one. If you are not comfortable with that assumption, we have more to do now. Right. And it's that constant kind of pushing back that I'm seeing companies get ahead of.

Because it's a different way of thinking about in particular planning. Because you say don't plan or you don't say don't plan, plan less.

Yeah, I think sometimes, you know, should I, should I change the message? You know, the message originally was stop planning, start preparing. And I sometimes say shift more. But I think that notion of planning to preparing. Yes. Because you know, what I'm seeing now in kind of going into Q4, people planning for next year, like it's the same times. It's like, well, what, what, you know, you really think that we're just going to kind of snap back from this and next year is going to be predictable? So, so we're pumping the old budgeting processes and the old planning process through an organization. Despite having four or five months of conversation with the organization. These are unprecedented times. What do we do in October? Give you the same template to fill out for your budget next year? I mean, come on, like what are we doing with that? Right. So the notion of stop planning, start preparing is, look, there are some things we can still plan for when data is still relevant, right? When goal posts are fixed, when. I don't want to say predictable because very few things are, but when we have a clear line of sight, that's when we need planning. Right. When the data is still emerging, when the goal posts are moving and efficiency is not our friend, we need robustness. That's when we need to shift more into this preparation mode. And that word robustness, that is a key characteristic of a growth strategy. Are you robust? I think a lot of organizations and industries, frankly, we're over indexed on efficiency coming into 2020, you know, lean, just in time, et cetera. And now the real challenge is are we robust enough to stand? That's what's going to come after us.

I hope you will read one mission where some of you decided, because that's their, that was their big aha. We're so focused on efficiency, creating our mutually exclusive, collectively exhaustive chunks, that it's getting in the way of us just adapting and moving fast.

Yeah, yeah, look, I think it's dangerous. Like you know my point of view, I think intent and boundaries. Intent. Why and boundaries that is much more powerful and frankly efficient because it takes less time. You know, your decision making in kind of extreme, kind of templated task list is actually very slow. You think you're speeding things up because you scripted everything out. But you're going on an assumption I don't take, which is the world's not going to change. Right. So if you're comfortable with the assumption the world's not going to change, template away. Right. But if you take the assumption that I do that a lot of things are going to change, then that actually slows decision making because when I get to the next step, I don't know what to do because the step that it says to do is no longer relevant. So. So I have to go back and ask and then we have to go back to the committee and back to the meeting and I get back and I'm slow. If I have a framework I can make day to day decisions in, I'm making decisions faster.

Are you seeing people mobilize those frameworks in any specific way or with certain tool sets or meeting cadences or what are you seeing in that regard?

Yeah, you know, and I'm not tied to one. Right. And I think that companies should really. My big thing is pick one. Right. And you know, the CEO who reads a book every month scares me like nothing else because they keep throwing like all of these new templates into their organization. Right. And so, you know, a colleague of mine a long time ago said like, pick one. I don't even care if it's mine. I mean, I'd like it to be mine. But if it's not, like that's fine, just like pick one that works and kind of use the organization around that. Look, we need some tracking mechanism, right? But frankly, I'm much more concerned right now about tracking, testing of assumptions and beliefs than I am necessarily about execution of priorities. Now I get in trouble a lot when I say this on calls, especially when they're CEOs or board members. But it's my current belief is that kind of stuff can be very disciplined and regimented and I would like it to be. So my notion is have a shared language, have a shared template, a shared way of communicating things and tracking things. And the thing I'm probably just as worried about, Scott, is the feedback mechanisms about how things are working than necessarily actual tracking.

Yeah, one of the things we found useful, we've become pretty religious about it. There's a weekly for every team. There's a particular weekly meeting here. Our current strategic priorities if they've changed, there's a time when we'll talk about why. Here's what we said we were going to do, here's what got done, here are the issues that came up and let's keep going. And it's I think people what can get lost in the agile dogma.

Yeah.

Versus the idea of what are we trying to do.

This notion I hear sometimes. Oh, well, we know we're not going to track this because we're going to go to like the Agile methodology. Like. Well, hold on one, you're introducing even more language. But again, that's actually a very similar agenda to what I like to use. Right. It's first, has a situation changed? Because if the situations change, being on track to plan is a bad thing, which we need to come back to, then here's what I said I do, here's what I did, here's what's working, here's what's not working, here's the help that I need, here's what's going to happen next time. Huddle, go around again. Probably doing it virtually right now. Some teams are already back in the office, you know, have your learning point and then kind of we're off. So I think that my big message in 2020 is kind of the discipline of the metrics is down a bit, I think should be depending if they're not relevant, if they're still relevant, kind of different story. But the cadence of communication needs to go up. If you were doing monthly, it should be weekly. If you're doing weekly, should be daily. If you're doing daily, it's probably twice daily. Right. So whatever cadence you had coming into 2020 probably needs to be increased for some companies by an order of magnitude.

The idea that I hear coming through and tell me if this is wrong is that it's not that there's no planning, but you're doing these much smaller chunks and you're ready for the contingency and you've got a process in place to adjust as you go.

Yeah. There is still a notion of planning. Right. Like you're an oil and gas company. We are still need to do some planning. Right. You've got an operations going. We still need to do some planning. But I'm saying that it's the preparation that was completely under indexed on coming into this year that we need to boost up and frankly acknowledge parts of the business we could plan. And now we need to prepare and it might be different across different parts of the organization. So that's definitely a concern. Is you're shifting in some parts, changing. There will maybe be parts that still have that in the organization, but yes, but the cadence should go up of looking at these things. So I recommend for a lot of companies to think about shifting from metrics to milestones, right? Because the metrics might be off, the metrics might be tracking the wrong thing, but we still do need some level of accountability and alignment, right? So think about, okay, well, rather than kind of I need X percent ROI or X percent this, should it be, okay, well, I need kind of three new key accounts by the end of the year. I need to kind of have that rig up by then. I need to have that by then. So shifting where I think the more powerful thing can be, shift from metrics to milestones. You keep your discipline, you keep your cadence of reporting, but we are not forcing you to do something which may or may not be relevant given the current situation.

Tell me about the reset and we'll talk thrive too, if you have time.

The thrive only comes from the hard work of the reset, is what I always say. I think the only real pause point we need on the reset is, I do mean reset right now. Some of your core customers might be in their first or second time in a company, right? Others might be several times in or been with the organization for a very long time, right? If you're the leader of the company, the what if conversations, the, well, what if that happened? We should really think about that. What about that? We have these in off sites and retreats and kind of your executive forums, and then you struggle to get one or two of those insights back into the business, right? And now you have been handed an opportunity to say, let's challenge everything. Let's look at all of the assumptions our company is based on and our industry is based on. You've been handed this opportunity in a very transparent way. Everyone knows you have it when your entire team has been handed the same opportunity. If you waste this as a CEO, like you are throwing away potentially one of the biggest opportunities you have to do a reset and finally do all of these things that you've had in your career, so don't waste it. But reset does not mean change, right? These are not synonyms. Reset means revisit change if and when needed. So people think, well, we've got a strategy, it's kind of working. Do we really need a reset? Yes, because you need to revisit every assumption the choices were based on, but you might need to actually change. And the biggest thing is setting your beliefs Right. One of the I found, you know, I've got a small handful of things that I found distinguish high growth organizations from those that don't grow quickly. And one of the biggest ones is beliefs. Setting, acting on and testing beliefs. It's kind of the first letter of my framework with this notion of setting beliefs. So what you're doing is you're saying here's the main trends going on right now. But any bozo can call out the trends, right? The power move is to say and here's what we believe to be true. And then think of the sentence if X then Y, if we believe X then Y, what does that imply for our strategy? You're going through the macro trends, work from home. The shift from globalization to nationalism, efficiency to robustness, on prem to off prem, you know, those other big trends. And then you're looking at your value chain, mapping out all those big trends and then saying again, what do we believe to be true? Prioritizing those beliefs that will change your industry and affect your choices. And then that belief set is your feed point, kind of your playbook into making your strategic choices. Then however, you need to start testing those things, right? Because we don't know the answers. And the real power move is if you can in parallel, I call it parallel pathing, test your beliefs while you're executing your priorities right. Because experimentation, execution are not opposing forces. They are most powerful when done together. And anyone who's had a tech background knows how to parallel path, right? So you set your beliefs from those leading to assumptions and implications. And then what I'm doing is I'm saying, hey, here's my four or five big beliefs of those, here's the three or four critical assumptions within those of theirs. Who's my two or three game changers if we got this wrong, our whole strategy is wrong. Here's how we're going to test them. I'm testing on one pathway while I'm executing towards my milestones in the other pathway. This feedback in is going into those review meetings Again, first question, has the situation changed? So the first piece of your situation, your reset, is that situation assessment and building out your beliefs. The second piece is really looking at that definition of success. The only thing I'll say on this, and then I'll pause is a question I get asked a lot right now is if things are really so uncertain, should we even set a destination of success? Right? Like, you know, this whole way, I mean, I don't know the numbers I'm going to have. I don't know what this is. And so I'm just seeing these kind of really vague generic statements. So there's two definitions of success, two types. There's destinations and there's directions. You know, most of us again who've ever gone for an exit or something similar are used to destinations. You know, by the end of 2022 I'm going to be a 50 billion dollar company kind of looking like xx very clear. Boom. By now I'm going to look like this. That's great. If you are facing extreme uncertainty, a business model shift or disruptive innovation, those are not your friend. Those can get in the way because we get headed straight for the wrong destination. So I'll say again, extreme uncertainty, disruptive innovation, business model shift. You need a direction. And direction is like holding a compass heading. You know, think of holding a compass for my hikers, right? Like I'm going northwest. I don't know exactly where I'm going, but we're going in this direction. Now I liken it to the difference between got mostly Americans going to take exit 405 for Santa Monica. I'm going to go northwest. And why does it matter? Because if the explorers in 1800s headed for Santa Monica, they would have missed the gold. Right. And it's actually a very good executive team conversation to have about whether we need a destination or a direction. And do we need to split up parts of our business? Because different pieces need different wants. And that's where again, testing your assumptions comes in.

People who are familiar with our work are going to think I prepped you for that because our download is actually enter the destination power steering. So I think that metaphor is really powerful. Do you have to go deeper or do you move from there and to thrive?

As far as covering the reset, maybe there's one other thing we should touch on which is what ends up on the list after the reset. We've got our definition of success. We've got our beliefs. I know that. I'm testing them. I revisited my competitive advantage. I know my true differentiation. And then we get to the so what? So what are we going to do? The challenge with the reset in 2020 is growth is fundamentally unbalanced. This is why it is hard. Growth is fundamentally unbalanced. Right. Which is why, you know, scorecards sometimes are balanced. Scorecards or other systems that have you allocate the same amount of resources in the same way every year are not always helpful for growth. Right. Because growth is fundamentally unbalanced. Some things matter more than other things at different points. In time. Well, why did I say it's a problem in 2020? Because people who are left in the organization, if we've had to do cuts, were concerned about engagement and productivity and everybody is strained and pressed. We know this from every single study. So organizations don't want to communicate. These are the most important things because like yeah, but that team's been working so hard and you know, those guys have really been pushing themselves. So we're kind of putting everything on the list because we want everyone to feel important. Scott, that's a communication issue. That's not a strategy issue. You need to as a leader be able to communicate. All of our employees are equally valued. But when it comes to our strategy, a few things are going to matter more than other things over the next period of time. I think that's a big thing to look for in that phase. Now when we go from that to thrive though, there is this kind of this phase back period I call it. And it's not just return to the actual office working, it's kind of building the business back up, kind of opening things, returning kind of all of that stuff. If you in the phase back phase build the business you had to take down in April, you just threw away your reset. And I'm seeing this happen. And so the challenge is if you really want to get survive, reset, thrive, right? The phase back phase is the thing that ties these three things together. Because at every single step in the phase back you are saying, okay, we made this strategic decision for this reason because we had this assumption. Is this assumption still true? If not, what should we be doing now? Simple example, we organized our sales team by country because decisions were made in a decentralized way and our customers like to see their sales guy every couple of weeks. Okay, is that assumption still true? Well, I don't know. Right. Because in downturns decision making tends to get decent, centralized rather than decentralized. And who's going to manufacturing plants right now? Not very many people as visitors. Right. So that assumption is no longer valid. So should we still have a country based sales team? Because that feels inconsistent with our current beliefs about the world. And this is, you know, it can be complicated matrix. It can be as simple as a shared Google Doc, like don't care where but find a way to track. Here's all of our decisions. Here's the assumption we made in the past about why we did it. Here's what we should be doing now. Now if that assumption is everyone else was doing it that way or we've Just always done it that way. Huge red flag. We need to revisit this assumption because it's definitely, probably no longer valid. Then if you go into the thrive phase, we can really just skip to the very punchline, I think because the thrive comes from the hard work of the reset. Setting your beliefs, testing your assumptions, leveraging your competitive advantage, having that on balance set of growth priorities on the list, parallel pathing, testing while execution. And I call this whole principle discipline flexibility, which I know those two words look odd when you're next to each other, but I found one of the underlying things of everything in growth is it's putting two opposingly opposite things together, right? Like alignment and autonomy, discipline and flexibility. You know, growth actually comes from these two things we think are opposites and combining them together. You know, the survivors that thrive is a disciplined process. It's methodical, it's analytical. You're mapping out your value chain, you're testing your beliefs. You're doing this stuff that feels slow because the insights can be trapped. But then when you find one, you're testing it and you're grabbing it with agility. Those companies that can combine, that be methodical and patient, yet grab things quickly are going to win. And I think the answer is actually very simple. I think Thrive organizations are going to have three strong balance sheet, strategic insights, operational agility. It sounds simple, but I really do think it is that simple. You get out of this year with a strong balance sheet, some clear strategic insights and can grab with operational agility. I'm pretty confident you're going to thrive.

I like that idea. A lot of operational agility, not as a certification or methodology, but as a way of being and preparing and staying in touch with are our assumptions. Right? That's the other interesting idea that came out of there is don't just document your strategic direction. What are the assumptions that are causing you to choose it?

I've been doing that, you know, across probably every industry right now is here's again, here's our most critical, here's the trends from those here's our most critical beliefs, here's our assumptions. We're going to rank order them in level of criticality and then start testing them and working on lots of different creative ways to test these assumptions across all these other different industries. And that's where that discipline and flexibility comes in. Because if you get feedback that our beliefs are wrong, that's okay because no one's going to get them. All right? But then we go back and look at those things we said we were going to do. We probably need to adjust one of those things. And the faster you can get that feedback loop right, the more the steeper your learning curve is. Learn faster, grow faster.

Yeah, that's another idea that really stood out that I like that I'm glad to see rising to the fore. Learn fast, use your skill at learning as a competitive advantage.

It sounds like a truism, right? It's like, yes, of course learning matters. But no, I don't mean it like that. I mean companies that have built a methodology, a culture, the hardware and the software and the leadership buy in to learning. Right? Because you mean all of those different pieces. If you have a steeper learning curve, which sometimes, you know, Airbnb, Airbnb example, you can do non scalable things to do scalable things. Those steep learning curves. Learn faster, grow faster. Right. You know, the B for beliefs about the world, that learning velocity that really matters. You know, I think we might need to touch on something on agility, because let me tell you another pet peeve of mine with this whole language around this, this area of growth strategy is agility is not a timeframe, it's a capability. A lot of people are saying right now we need an agile strategy, so we're just going to do six month strategies or we're going to be more agile, so we're going to do strategy every year. Agility is not a time frame, it is a capability. You don't get more agile by doing it more. Right. Agility is just making good decisions quickly aligned with strategy. So agility, you cannot separate from strategy because you cannot be agile by my definition, without having a strategy.

A lot of times executives hope they're getting air cover. Well, we'll bring in this agile company, they'll hit us with the agile wand.

There is no magic growth wand like you want to grow, you have to do these things that we're talking about, which again, we're trying to make them sound as simple as possible, but they do take work to get them in place in your organization.

The companies that do this type of work, that they lean into these sets of practices, you don't have the same drains that might have put up some of the pushback that people sometimes.

And you know what? I think let's tie that back to one of the first things I said. That is why your value creation lens is so important. That is your lens. We're going to move these things apart. Then as a leadership team, you only address things which are causing friction, which I'm glad you used that word. And friction I define as is hindering or preventing us from creating value. And that's where I literally use my hands in a meeting, say, is this preventing us from moving these things apart? If so, we have to address it. If not, it's tension. Now, every tension we got to ignore, like, one tension is not a bad thing. Every system has a bit of tension. You need a bit of tension, right? And we distract ourselves if we try to manage all the tension down. Not only is that probably not good for the organization, because a bit of tension is a good thing, but we are not prioritizing the friction, right? So growth organizations need to prioritize addressing friction, ignore the tension, and then they can kind of have that bandwidth to focus on those things that matter the most.