Only the paranoid survive

11 February 2016 / article

“It ain’t what you don’t know that gets you in trouble. It’s what you know for sure that just ain’t so.” This quote (falsely) attributed to Mark Twain is unfortunately too true. Our brain are designed to imagine a future in which our plans succeed – no matter how unlikely that is.

Consequently it’s really hard to keep an eye out for real change on markets because we can’t help interpreting weak signals in ways that favor what we intended to do all along. How can we possibly expect the unexpected?

The trick is to continue to rethink our market position from different perspectives, again and again. Rather than “post-mortem” to explain away why plans went awry, we can “premortem” and imagine how market evolutions might not fit the story we tell ourselves, what Andy Grove use to call Strategic Inflection Points when the usual rules of business go out the window.

One way to rethink your position on your market is to ask yourself:

What specific problem do we solve for customers? (Customers by drills because they need holes)
What alternatives technologies solve this problem differently than we do? (mechanical drilling can be done by hand)
Where do our competitors fit on a PRICE/PERFORMANCE/PAIN chart? What is the price/pain (hassle to use) trade-off at different performance levels.

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Thinking it through highlights threats from alternative techs, not just the customers we’re used to. It also helps us pick improvement dimensions for our products.

At strategic level, lean thinking come down to:

What further value are we going to offer to customers this year? (what new function, feature or performance improvement we need to work on to gain competitive advantage?)
What operational problem do we need to solve to leverage the firm’s delivery performance? (Ask yourself: how can I improve flow and make work easier?)

Clear answers on these two questions will fuel the engine of improvement for the year to come and unveil both new opportunities and hitherto unseen threats. To quote Grove again: “Businesses fail either because they leave their customers [stop practicing question #1] or because their customers leave them [stop practicing question #2]

Tags: competition, customers

Leading author, speaker and researcher, I work on both the "hard" (improve quality, reduce lead-time, eliminate waste) and "soft" (engage people in problem-solving and improvement to develop them to the fullest of their abilities) dimensions of Lean transformation.

I started studying improvement initiatives twenty years ago as part of my PhD. research on Mental Models. I was persuaded by Toyota engineers that to understand lean you had to practice it firsthand and I have been working with supervisors, site managers and now CEOs to leverage their lean efforts into market share, people engagement and bottom line results. You don't know what you don't know and the most surprising thing I've learned as a cognitive sociologist is the value of: see with your feet and think with your hands!

I co-founded the Projet Lean Entreprise and the Institut Lean France. I have written several books and articles about the links between knowledge and management (Managing With Systems Thinking, The Effective Organization, Les Modèles Mentaux), and more recently, co-authored three business novels published by the Lean Enterprise Institute, one about lean turnaround, The Gold Mine, one about lean transformation, The Lean Manager, and a novel about Lean practice, Lead with Respect as well as a Lean manual in French, Le Management Lean.