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 Harryto directing masterpieces like great turin andUnbeaten, 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 anguish crest, “Improvise, adapt and overcome.” What better way to transition to this value creation delivery?
Improvise, adapt and overcome! In fact, the line reminds me of former Bank of America CEO Hugh McColl. McColl attributed everything of value 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 outdid themselves.
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 are clear about the 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 does anyone, especially employees and customers, care? Until these questions have solid answers, consider your team devoid of fundamental guiding principles. Assuming you have solid answers, ask the “What?” ask. In other words, what differentiable actions will the team prioritize to bring the vision to life. This is the strategy. When combined with objectives, strategic intent is defined.
The team is ready for the “How?” questions or tactics. This is where “improvise, adapt and overcome” separates the winners from the losers. All competitive arenas are dynamic and mutate with changing conditions. Accordingly, 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 flaws 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 foundation of execution.
When the values are clear and aligned, tactical modifications within spans of control are reasonable risks. The team has ground rules, or rules of engagement, to improvise and adapt to overcome. What might this look like in practical application? Suppose a teammate was on the opposite side of the globe. A 12-hour time difference could not only complicate matters, but also mean that communications have been disrupted and a deal break decision is left up in the air. Is the teammate equipped enough with the experience, skills, responsibility, strategic intent, and rules of engagement to make the decision? If not, leaders need to review the company’s training and development process. Case studies, deal post-mortems, and mentoring are beneficial to the cause. Conditioned professionals are then better prepared to say “no” in difficult situations. Alternatively, they can also take calculated risks with confidence.
If the teammate is adequately equipped, what constitutes a good decision? A practical principle is to “satisfy,” or to 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 believe they have enough information to make a statistically likely call should do so. By the time professionals know everything about a decision, the opportunity may be lost. Unless the professionals are dealing with life and 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 should be the guiding principle.
Meet 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 moot, scalability enables dominance almost overnight. Googles and Facebooks are hard to scroll. The laws of physics help pioneers. Momentum and momentum complement the change management aspects of the initiative.
“Improvise, adapt and overcome” are essential for the middle market. For starters, this is where most of the jobs are created. The health of the economy depends on the smallest businesses. 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 train, storm, standardize, and execute 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 gloomy can spin in an ocean vs. a battleship in a bathtub.
Is there a cheat? Of course! As Amazon’s Jeff Bezos says, “It’s always day one!” What does Bezos mean? The competitive process is continuous. Surviving today’s storm once does not grant immunity against future storms. Kansans, for example, expect tornadoes every year. Winners rise above 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 action with the portfolio company leadership team, and/or (ii) the plan is only done once at the beginning of the investment. Although budget processes may be an annual routine, strategic planning is not. This is precarious on several levels. Let’s explore some.
Organic and acquisitive growth locations are staples of the investment thesis. Organic growth tends to boost the number of employees. Part of that template may be C-level and supervisory. Interestingly, these new management staff were not involved in the planning process that may have created their position, and as a result, they may not reconcile with the plan. These people have no malicious intent. Rather, they are trapped in “unconscious ignorance” of relevant information. Additionally, they may have knowledge of the competitive terrain that could alter the plan in beneficial ways, either offensively or defensively.
Acquisitive growth injects a different company, with a different culture, into the mix. Aside from the 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 unrelated to the integration logic. Who is reconciling the variance?
An end point is relevant to strategic intent. Leadership teams can build on strategic intent and make good tactical changes, but they don’t communicate the changes to key business model process managers. These oversights often produce unintended consequences. Examples include misdirected resources and workflow bottlenecks.
The Assumption is the mother of all disasters. To turn improvisation, adaptation and improvement into a competitive differentiator, we must embrace Patrick Lencioni’s admonition about continually promoting organizational clarity. This includes 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 end with a couple. flight of the phoenix and apollo 13 They are wonderful films that demonstrate “improvise, adapt and overcome”. In flight of the phoenix, the strategic intention was to escape alive from an accident in the desert. The survivors built a single-engine plan from the wreckage and flew to safety. In apollo 13, the crew, NASA and contractors suffered a space explosion, recovered 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 look like “Who goes first?” by Abbott and Costello. Since value creation is no laughing matter, “improvise, adapt and exceed” makes much more sense in the mid-market.