Loosening Your Grip on Bobby Orr
It's been one year since Gord Downey, lead singer of The Tragically Hip passed away. I wrote one of my first pieces about his death over at Medium called Courage, My Word. That article remains one of my favorites. The stories that touch our humanity always seem to hit home. I never knew the man, but I miss him nonetheless.
With Gord in mind I was reflecting on lyrics in one of The Hip's songs, Fireworks. Hit the link to take you to Spotify, or you can find some live performances on YouTube.
The line that stuck in my mind was "You were loosening my grip on Bobby Orr." I've been thinking a lot lately about changing perspectives in part because of a commercial advert I saw in Australia that challenged the prospective customer to "Rotate Your Thinking." The ad is for sheep pesticide which is quintessentially Aussie but no different than grain farming weed control products advertised in western Canada, I suppose.
I've forced myself to rotate my thinking a lot over the years. It has helped tremendously in my personal growth.
I recall years ago an engineer I looked up to became a plant manager. He told me he had to give up a lot of his engineering tendencies. I thought that was a weird thing to say as I was firmly entrenched in the plant engineering culture at the time. Over the years, as I met the challenges of different roles outside of engineering while learning asset management and operational excellence, I found I also gave up certain patterns of thought and action. My executive coach had gone on a similar journey and said, "I had to beat my old habits out of me." My journey has come full circle. Recently in a conversation with a reliability engineer, I echoed the same message my mentor and coach expressed in changing the way I see the world. I had to beat the engineer out of me. My friend had the same reaction I had years ago, astonished said "Why would you want to do that?"
You must evolve. You can wait for experience to happen to you to change. Or you can be more proactive and choose to learn and change much more quickly.
There are a couple specific areas where I believe leaders should reconsider their thinking.
The first is financial management in asset-intensive industries. I'm not referring to the CFO and the accounting practice. I mean operational management of finances - a subtle but important distinction. Many operational leaders, particularly in publicly-traded organisations, manage for cost, hope for performance and accept the risk. I will admit, that is a way to manage, but it often yields mediocre results over the long-run.
Managing for cost; hoping for performance; and accepting the risk is a sure path to mediocrity
There's an organisation in Europe called Beyond Budgeting that espouse the virtues of loosening the organisation's grip on iron-fisted cost control as a means to provide flexibility to operations in order to create value. I concur. That flexibility is hard to come by in most cultures. The market does itself no favors by reinforcing executive leadership's fixation on short-term quarterly financial result behaviors despite much messaging to investors of long-term value through some so-called of operational excellence label of practice.
The second is risk and decision-making. In the practice of sustaining capital allocation, many organisations answer the question, "What's the best set of projects to execute given a certain spend constraint." Again, that's a way to manage, even a good practice. I feel strongly that's the wrong question, yet most practices are built to answer that specifically. A much better question is, "What level of performance do we need to meet the strategic organisational objectives, and what's the best asset strategies to achieve that service level at the lowest sustainable cost and within the organisation's risk tolerance." I admit that's a mouthful. Both methods can be risk-based but the former is a prioritization method while the latter requires optimization methods to solve. Some math is required, oh no!
Every constraint introduced is an additional assurance the result will be sub-optimal and leak value
Ideally you should solve for the appropriate capital spend, but often the organisation (often driven by Finance) doesn't allow the flexibility required to on the optimal spend. How was the constraint established? Does it reflect the risk and performance of the assets? The degree of value given up between the prioritization and optimization practices can be 7-20% of the capital budget depending on the quality of the practice and people. That's a lot of value leakage. It's not hard to change the practice but culturally there's often very little appetite.
In both cases the organisation must loosen its grip on cost control. It is hard to do. It is much easier to squeeze cost which is direct control of the leaders, than to manage performance and risk which cannot be affected directly. Again, it boils down to discomfort with uncertainty. Leaders revert to the certainty of a bird in the hand, foregoing two in the bush.
What is the most dangerous phrase in business? "We've always done it this way." Still, many leaders are reluctant to change even when they know continuing on in the same way won't get the results they need. They are stuck with the status quo yet they hope it is enough. They and their organisations remain mired in mediocrity. Sigh.
Isn't it amazing what you can accomplish...When the little sensation gets in your way... Not one ambition whistling over your shoulder... Isn't it amazing, you can accomplish anything.
I'm striving to be that little sensation helping leaders rotate their thinking and nudging their ambition to accomplish anything. Leaders sometimes need a bit of artificial chaos as a bump in energy in order to shift themselves and their organisation.
It has been said that great leaders have the ability to solve complex problems by seeing and evaluating multiple perspectives at the same time. The first step is to understand that other approaches exist and can perhaps better solve the problem.