The good and bad of thinking small
Thinking and delivering small. It's all the rage and has been for over 10 years within technology companies and it can be used to deliver incredible results. Just look at agile software development, where work is broken down into stories and delivered in sprints. It has proven to be a better way to work in the digital world.
But what happens when companies are thinking and delivering work incrementally and it isn't enough? What happens with the work itself that is being delivered is the result of thinking small when large changes are required to survive?
Let's look at the two sides of thinking, building and delivering incrementally. It's easy to see this philosophy as being similar to the Force in Star Wars. It is a great power that can be leveraged using the light or dark side.
Let’s take the light side. In today’s software and startup cultures, there is enormous power in thinking incrementally. This is a common framework used in agile software development and the lean startup framework.
In these models, we value making small tweaks and improvements to our products, services, websites and other digital platforms over the long haul. The key here is using data and other insights to work on the right thing that will produce the most value at any given point.
In these frameworks, incrementalization can deliver massive results, allow teams to move faster, be more responsive to changing market or customer dynamics. This is the foundation of growth hacking, and one that I used to help drive the annual revenue of Target.com from $2B annually to almost $4B in three years.
Let’s switch gears. What about the other side of incrementalism? The dark side, in this case, is when companies prioritize small, incremental improvements to their product or service, when in fact, they need far larger shifts to meet changing circumstances.
This is the side of incrementalism that we focus on when helping organizations that are about to be or already are being disrupted by new technologies or competition.
The good news is that this issue is easy to spot. When we join teams, the warning signs are everywhere. Large, unmanageable backlogs and priorities set from leaders who aren’t using data to make decisions are two common issues. Other issues include not saying no to enough potential work, lack of ultra-focused priorities and internal processes that add layers of complexity without adding value to the team. Company and team cultures that don’t support testing, failing and learning also end up delivering safe, incremental improvements that will be rewarded but that don’t actually serve the customers or the company.
The bad news is that this issue is hard to address. The real issue with organizations that suffer from the dark side of incrementalization lies in the culture, often driven by fear and leaders who are entrenched in the status quo.
The unfortunate part of the story is that many organizations who cannot afford to think small are doing just that. As new competition, new technology and new consumer behaviors dramatically alter virtually every industry, very few organizations have the senior leadership or talent across the organization to change how they fundamentally view their position in the world and alter their products or services accordingly.
As organizations grow in size, the more entrenched their beliefs, their strategies and their internal processes are. All three are barriers to making the large-scale changes that are required to compete in today’s economy.
Ultimately, what are senior leaders to do if they realize that their organization suffers from thinking small and only delivering incremental or superficial improvements?
The first thing leaders need do is re-evaluate how their business adds value in the new world. Working with others, we need to ask the question “what is our role going forward? How do fit into the new digital ecosystem?” This should ultimately be a series of strategic meetings at the leadership level to align on what’s needed to change and grow.
One of the hardest parts of this process is the self-reflection of the leader or leadership team to evaluate whether the right talent is in place to take the company boldly forward into the new world. Typically, the talent in place has a strong desire to change by is also entrenched in the current culture, beliefs and politics that no longer serve the organization.
Next, getting an outside perspective can be incredibly helpful in combatting thinking too small. Whether an outside consultant or senior executive who has helped change internal culture, it’s vital that leaders know that this change can be accomplished and that it is mandatory for survival and success.
At this point, with a vision for the future and the knowledge that others have been able to accomplish this internal transformation, it’s time to look at the internal processes that will drive the change. How your company budgets, plans the work, and maybe most importantly, what it says ‘no’ to, should be evaluated. Undoubtedly, what’s in place today won’t get you where you want to go and should be improved.
All the work that is currently in flight should be re-evaluated with the most critical of lenses to understand if the work is truly propelling the business forward or if it is just supporting the status quo. When Mike McNamara joined Target as CIO in 2015, he evaluated over 700 IT projects that were in-flight or planned. He paused or eliminated almost 600 of those projects to refocus the team on only the work that would change the business. This had an incredibly freeing effect on the entire organization because we knew what the priorities were going forward. In the past, the priorities had been everything.
It takes a special leader to successfully lead a company or team through a change in vision and thinking. For those that do, there is more opportunity to succeed. The cost of not doing so will lead to the extinction of the organization.