Clint Eastwood is a personal favorite, both as an actor and as a director. Eastwood is an icon of the American dream. Industrious and versatile, his work ethic and eye for opportunity have made him an entertainment staple for decades. Some of us remember it in the TV series, Rawhide. From spaghetti westerns, through Dirty Harryeven directing masterpieces like Great Turin YUnbeaten, Eastwood continues to push the envelope of excellence. Eastwood’s mojo can be summed up in a quote from his character, Marine Master Gunnery Sergeant Tom Highway in crest of anguish, “Improvise, adapt and overcome”. What better way to move on to this value creation delivery?
Improvise, adapt and surpass! In fact, the line reminds me of former Bank of America CEO Hugh McColl. McColl attributed everything valuable he knew about leadership to Marine Corps training. His mantra was “When in doubt, attack!” McColl celebrated his Gunnys by giving them crystal grenades to commemorate superior results when they improvised, adapted, and excelled.
McColl’s style is intriguing and worth further thought. How could a leader attack without appearing to play Whac-A-Mole at the carnival? The answer is rooted in the confusion of strategic intent and preparation. When the leader and his trained team have a clear objective, the “Attack!” mantra aligns very well with “improvise, adapt and overcome”.
Consider some critical thinking questions. What is the vision for the company? Also, why would anyone, especially employees and customers, care? Until these questions have solid answers, consider your team bereft of fundamental guiding principles. Assuming you have solid answers, then ask the “What?” Question. In other words, what distinguishable actions will the team prioritize to make the vision a reality. This is the strategy. When combined with goals, strategic intent is defined.
The team is now ready for the “How?” questions or tactics. This is where “improvise, adapt and outperform” separates the winners from the run over. All competitive arenas are dynamic and mutate under changing conditions. Consequently, the tactics change. The ability to change quickly without compromising strategic intent is a desirable core competency of the team.
How could a geographically dispersed, even global, team accomplish this? The answer has to start with shared values. While it is naive to assume that all employees and the company have identical values, it is imperative that their values are compatible. Teams can benefit from diversity; however, they cannot work if the values conflict. This is one of the chronic defects in recruitment. For example, what’s the point of a furrier applying for a job at PETA or a vegan at a packing plant? Values are the mortar between the bricks that build the foundations of execution.
When values are clear and aligned, tactical shifts within spans of control are reasonable risks. The team has ground rules, or rules of engagement, to improvise and adapt to outperform. How might this look in practical application? Suppose a teammate was on the opposite side of the globe. A time difference of 12 hours could not only complicate matters, but also mean that communications were broken and a decision to break the deal was left up in the air. Is the teammate sufficiently equipped with the experience, skills, responsibility, strategic intent, and rules of engagement to make the decision? If not, leaders should review the company’s training and development process. Case studies, autopsies of agreements, and mentorship are beneficial to the cause. Trained professionals are then better prepared to say “no” in difficult situations. Alternatively, they can also take calculated risks with confidence.
If the teammate is properly equipped, what constitutes a good decision? A practical principle is to “satisfy,” or know enough to make a high-probability choice. Another way to frame this is the Pareto principle, or 80/20. Interestingly, research corroborates that analysis paralysis does not improve decision quality. Experienced teammates who think they have enough information to make a statistically likely call should. By the time the professionals know everything about a decision, the opportunity can be lost. Unless professionals are dealing with life-or-death situations, it is acceptable to make a post facto mid-course correction. For most deliverables, modifications are possible without compromising the goal. Once again, alignment with strategic intent must be the guiding principle.
Satisfying has an additional practical utility: first-mover advantage. When professionals think they know enough to get started, getting ahead of the competition can be an advantage. Especially in virtual industries where investment in fixed assets is almost questionable, scalability enables dominance almost overnight. Googles and Facebooks are hard to scroll. The laws of physics help the pioneers. Momentum and inertia complement the change management aspects of the initiative.
“Improvise, Adapt and Outperform” are fundamental to the mid-market. For starters, this is where most of the jobs are created. The health of the economy depends on the smallest companies. Flexibility and time to market are sacrosanct. Smaller companies are less encumbered by groupthink, bureaucracy, and politics than larger companies. This relates to the storm phase of Tom Davenport’s build, storm, normalize, run cycle. Middle market prowess can create and defragment markets faster than most large companies can comprehend in the same market dynamics. The point is summed up in the adage about how easily a lugubrious can spin in an ocean versus a battleship in a bathtub.
Is there a cheat? Of course! As Amazon’s Jeff Bezos says, “It’s always the first day!” What does bezos mean? The competitive process is continuous. Surviving today’s storm once does not grant immunity against future storms. Kansas residents, for example, expect tornadoes every year. Winners stand out among the storms.
Among the most interesting things I see among mid-market private equity portfolio companies is that (i) the investment thesis is rarely put into practice with the portfolio company’s leadership team, and/or (ii) the plan is only done once at the beginning of the investment. Although budgeting processes may be an annual routine, strategic planning is not. This is precarious on several levels. Let’s explore some.
Organic and acquisitive growth venues are staples of the investment thesis. Organic growth tends to drive headcount. Some of that template may be C-level and supervisory. Interestingly, that new management staff was not involved in the planning process that could have created their position, and as a result, they may not reconcile to the plan. These people have no malicious intent. Rather, they are trapped in “unconscious ignorance” of the relevant information. Additionally, they may have knowledge of competitive terrain that could beneficially alter the plan, either offensively or defensively.
Acquisitive growth injects a different company, with a different culture, into the mix. Aside from poor odds of a successful integration, the acquiree may (i) be unfamiliar with the granularity of the plan and/or (ii) have an execution paradigm alien to the integration logic. Who is reconciling the variance?
An endpoint is relevant to strategic intent. Leadership teams can build on strategic intent and make good tactical changes, but they don’t communicate changes to supervisors of core business model processes. These oversights often produce unintended consequences. Examples include misdirected resources and workflow bottlenecks.
The Assumption is the mother of all disasters. To make improvisation, adaptation, and improvement a competitive differentiator, we must adopt Patrick Lencioni’s admonition about continually promoting organizational clarity. This includes the metrics and communication mechanisms to promote both alignment and progress against goals. “Gunny” Tom Highway did this to ensure that his company of soldiers was successful.
We start with the movies. Let’s finish with a couple. flight of the phoenix Y apollo 13 They are wonderful films that demonstrate “improvise, adapt and overcome”. In flight of the phoenix, the strategic intent was to escape alive from an accident in the desert. The survivors built a single-engine plan from the wreckage of the crash and flew to safety. In apollo 13, the crew, NASA and contractors suffered a space explosion, retrieved the remaining resources to improvise a “lifeboat” and safely returned the crew to Earth. Analysts referred to the mission as a “successful failure”: there was no landing, but no dead crew either.
None of us is as smart as all of us. When strategic intent is in the hands of trained professionals, value is created. When not, the scenario tends to resemble “Who goes first?” of Abbott and Costello. Since value creation is no laughing matter, “improvise, adapt and outperform” makes much more sense in the mid-market.