Value-led scheduling

What is the relationship between price and cost in your company? Does that sound like an obvious question? In many companies price is driven by cost. The company determines the cost of its product or service and then sets the price based on its margin targets.

But there is an alternative. Some companies start with price and let that set the baseline for cost. One of the most famous practioners of price-led costing was Henry Ford. In his book, Pricing on Purpose, Creating and Capturing Value, Ronald J. Baker talks about how price-based costing drove many of the Ford's employee and process-based innovations. As I've argued in the past, innovation is driven by constraints and starting with a price creates a tremendous constraint.

There is an opportunity to adapt these practices to execution. Research shows that most major initiatives fail to deliver their intended value. And, for those that do deliver some value, it is often long in coming. Often scheduling practices are similar to pricing practices. We let the inputs dictate the terms of the outputs.

But what if we reverse it and take a "value-led" scheduling approach. As with a pricing-led approach, the key would be to start at the point of value and work backward.

Perhaps there is a value-drop defined for each quarter. The leader's job is to determine how to best use his or her resources to deliver against that timeframe.

Imagine how this approach might change our thinking:

1) Outsourcing certain tasks would become much more attractive
2) Off-the-shelf solutions (i.e., reducing customization and tailoring) would be more viable and necessary
3) "80%" solutions would be better tolerated
4) There would be greater focus on differentiating high and low value features and functions

I regularly hear leaders talk about striving to think in these four ways. Yet, as long as milestones are effort-based (rather than the other way around) there is less incentive and need to change.

I've started asking a new question when reviewing progress on initiatives. That question is, "Has anything changed for our customer yet?" If you can't answer "yes" every couple of months, it might be time to rethink the content and timing of your milestones.

Brad Kolar is the President of Kolar Associates, a leadership consulting and workforce productivity consulting firm. He can be reached at brad.kolar@kolarassociates.com.

I have no idea what you just said, but it's exactly what we need

"I have no idea what you just said, but it's exactly what we need!" This is an actual quote from a senior executive at a major corporation. She wasn't the first executive I've heard get excited about a proposal without understanding the context or facts. Unfortunately, as is often the case, while the sound byte sounded good, the solution itself had no legs. It wasn't going to work.

In our attention-deprived world, executives (and others) seem to be making more decisions based on sound bytes. Just look at the case of Shirley Sherrod. Just one additional piece of context (a single sentence) was the difference between her being a racist or an enlightened leader. Unfortunately, decisions were made before hearing that one critical sentence.

Sound bytes are effective. E=MC² was a simple elegant representation of a complex physical law. Yet, while knowing it might help me pass a physics exam, it's not going to enable me to build a nuclear reactor.

The problem isn't with sound bytes themselves. The problem is with how sound bytes are used.

The first part of the problem is how those sound bytes originate. It used to be that people thought through an idea thoroughly, developed a story around that idea and then culled it into its essence for presentation. That was pre-Powerpoint. But Powerpoint reversed and truncated the process. Now people often start by structuring and executing thinking in terms of bullet points. The result, while pithy, provides no real substance. We've all been in presentations where the presenter doesn't provide much more than a restatement of the bullet points on the slide. Then when challenged on an issue or asked for clarification, the presenter usually deflects to the next phase of the project when things will be "fleshed out".

This isn't actually a Powerpoint issue. It's a leadership issue. Tom Peters uses Powerpoint as well. Yet, his one word slides set the backdrop for a ten to fifteen minute (or longer) discussion on a topic. His slide may say E=MC² but he backs it up with a lesson in physics.

The second part of the problem is in our consumption and use of those sound bytes. In this case, the sound byte used to be the start of discussion. Now, the sound byte is the discussion. Decisions are made based on five or ten discrete, pithy phrases rather than a detailed understanding of the meaning and implications of those phrases.

We are living under an illusion that things are moving too fast for us to take time to understand. We are told to keep our messages short and to drive decisions quickly. Both are true. But, to be done effectively, both require an underlying understanding of the big picture. At some point we need to know the full story in order to act on the bullets.

Otherwise, we just get into on-going ping-pong matches between discrete, reactive ideas that generally don't hit the mark or deliver value.

Brad Kolar is the President of Kolar Associates, a leadership consulting and workforce productivity consulting firm. He can be reached at brad.kolar@kolarassociates.com.

Thinking like an owner requires understanding like an owner

The other day, my brother and I had a showdown at the cash register. We both wanted to pay for the purchase. I un-holstered my credit card while he drew a wad of cash. When the dust cleared, my credit card had been swiped and his cash lay silently on the counter.


As we left the store, my brother commented on the cashier, "You can tell that she's not the owner - the owner would always take the cash."


My brother is a chef and has run many restaurants including his own. He now runs a catering business. He understands the difference and implications of cash and credit when you are trying to run a business.


My guess is that the cashier had no clue about those differences. She probably assumed that accepting a credit card for the purchase was pretty much the same as accepting cash. Most likely, no one ever told her the difference.


A common cliché among leaders is encouraging their employees to act like owners. Yet I wonder how many of those leaders take the time to give their people the business context needed to act like owners.


Certainly there are some aspects of acting like an owner that don’t' require a lot of business acumen. Basic fiscal responsibility is more about common sense than business acumen.


However, to really act like an owner, a person must understand how the business works. They need to know the difference between cash and credit. They need to understand how money, information, products, and services flow through the organization. They have to understand how the end-to-end customer experience works. Only then can they truly act like an owner and make good decisions.


As leaders, we can't expect our people to act if we aren't willing to invest in the information, motivation, and ability needed to support those actions.


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Brad Kolar is the President of Kolar Associates, a leadership consulting and workforce productivity consulting firm. He can be reached at brad.kolar@kolarassociates.com.

Leadership: Mindset not skillset

I often have trouble filling out applications to speak at leadership conferences. Often they ask for four or five measurable objectives for the day. That's not the problem. The problem is the way they want those objectives to be framed. The examples that they provide generally focus on discrete, tactical skills. My workshops don't provide people with discrete, tactical skills. My workshops help people become better leaders.  Great leadership is no more the result of a single course or book than a person's health is a result of a single meal or single activity. So why do we try to force fit discrete, short term measures to a leadership workshop?


Leadership isn't about discrete, tactical skills. Leadership isn't about skills at all. Of course, a good leader does need knowledge and skills. However, when you look at most good leaders, their knowledge and skills aren't that much different from anyone else. In fact, some of the best leaders aren't the ones with the most knowledge or skill.


The key differentiator between good leaders and others is their mindset. Good leaders look at the world, their business, their people, and their problems in a different way. They assume more responsibility and ownership than do others. They aren't afraid of failure or of taking calculated risks. They focus on results and the big picture. Finally, they break down barriers that prevent their people from succeeding.


None of these are skills. They all have to do with a leader's mindset. The best leaders are able to mobilize their own and other people's skills in unique ways.


I'm not suggesting that we not hold leadership training accountable for results. We just need to get better at understanding what those results look like. Good leadership isn't about doing one new thing. It's about bringing that new thing to everything that you do. It's about combining that new thing with all of your old things.




We need to stop trying to break leadership into small, discrete parts. Otherwise, we will always miss the mark on what leadership is really about.


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Brad Kolar is the President of Kolar Associates, a leadership consulting and workforce productivity consulting firm. He can be reached at brad.kolar@kolarassociates.com.

The crowd always seems to sing in tune

I was watching the new Bruce Springsteen DVD:  London Calling.  It has three hours of footage from his 2009 concert in Hyde Park.  As I listened, something struck me.  The crowd always seems to sing in tune.  Now, I've been to concerts and have been part of the crowd.  I know from experience that I absolutely do not sing in tune nor do the people who generally seem to sit near me.  So what's going on?  I think it might have to do with a general phenomenon about crowds.  As a group, the tend toward the right answer.  In this case, the "answer" being pitch.

Try this out.  Go ask ten to fifteen people the current level of the Dow Jones Industrial Average.  Then take the average of their guesses and compare that to the actual number.  If they are like most crowds, you might find some individual guesses that are far from the average.  Yet, the crowd's average will beat most of the individuals. This idea isn't new.  John Seely Brown talked about it in his book The Social Life of Information.  More recently, Dan Simons and Chris Chabris talked about it in their book, The Invisible Gorilla.

So, beyond having a great party trick, why does this matter?  Think about how you gain information and ideas.  If you are like many you seek out the "experts".  But, there are a few problems with that.  First, the experts aren't always easy to find. Second, the experts aren't always experts.  As Simons and Chabris point out in their book, we aren't actually that good at identifying experts or judging our own expertise.  In fact, we often mistake confidence with expertise.  Simons and Chabris also point out and we learned when writing our book, The Brain Advantage, the brain is very good at instilling a false sense of confidence in ourselves.  So, we might need a new strategy.

Instead, why not use what we know about crowds to find that "average" answer.  Solicit opinions from a wide variety of people and then boil them down to the common denominator or themes.  Don't just ask people who you think might "know" the right answer - that's the experts model.  Ask everyone!  That's the point.  Some people will be in left field.  But, when you combine all of their perspectives you'll probably hit on something good.

Trusting the crowd goes against much of what we've been taught in our hierarchical, expert-based organizations.  But this is a new age and its time to break old habits.