Dynamic focus

Consider the electric car. In the medium term, its prospects are highly uncertain. Will the various countries in the world keep subsidizing electric vehicles? Will Tesla’s multi-billion investment in a large-scale battery plant work out? Will the OEMs start introducing attractive designs for the mass market at acceptable price points or will they remain committed to the combustion engine? Will the industry commit to fuel cell technology instead? In the long term, the direction is clear: electric vehicles will become a relevant – if not dominant – part of the world’s vehicle fleet. The electric motor is ideal for movement. Battery performance increases by 5-10 percent year after year. Electricity is cleaner and its production will move into the hands of consumers and end users.

This longer-term perspective – the “writing on the wall” of the development course of the industry, sector or society – provides a compass for the enterprise, its leadership and the employees. Any short term-decisions can be evaluated against the long-term direction: are they aligned with or conflicting with the direction we aim for? An additional benefit is that such overall direction provides motivation and sparks energy throughout your firm and people. It serves as a constant reminder of the “why” that underlies your company purpose: a feeling of being in it together; this is what we are working towards; this is where we are going. Think of a ship sailing towards a far away shore. To reach its destination, it has to constantly adapt its course, sometimes even tack, but never will it end up just going where the wind takes it, finding itself without resources in the middle of the ocean.

Many organizations do not have a long-term direction beyond continued growth and value increase. Compare this to Tony Chocolonely: “our overall goal is to achieve the end of slavery in the chocolate industry, and once we have reached this, we throw a big celebration party and can safely close the business”.

Meanwhile, business building, innovation, and entrepreneurship require constant and relentless decision-making that determines momentum and progress. Think about product design choices, technology choices, resource allocation choices, marketing choices, partnership deals, hiring decisions, and reactions to external events. These situations are always complex and uncertain, with incomplete information and perspectives that are riddled with false assumptions – perfectly prepared for our natural tendency to pause before making any decisions. After all, when driving into thick mist, the tendency is to step off the gas or even drive onto side of the road.

The problem however with moving very slowly or not at all, is that you do not get anywhere. You might get stuck, paralyzed in the middle of the thick, while others have already found the way to other side and are moving forward in broad sunlight. So the essence is to keep making decisions that maintain progress, provide fast learning, and unravel wrong assumptions without total wreckage.

To make progress in the midst of uncertainty, one needs either effective hierarchy or a process (or both). Hierarchy (with dictatorship being an extreme form) is an effective way for rapid decision-making, with the onus on the leader to make the right judgment calls. Most start-ups or break-through innovation efforts are organized through this strict hierarchy, often with the founder calling the shots. As the saying goes: “there is no town, there is no city, with a statue for a committee”.

Rather than relying on top-down dictatorship, some organizations have a process for rapid decision making under uncertainty. This is the surest way to deliver great results and build an organization that empowers its members and unlocks creativity. These organizations rely heavily on common language, common values, a common sense of where they are heading, and they have strict decision rules: who can decide on what, who to consult, and how and when to escalate. The clearer the long term vision and the stronger the common values, the better the organization is able to act in decentralized fashion.

Dynamic focus offers enough process and structure, without having people freak out that progress isn’t linear. In recent healthcare work with low-income populations in the US, for instance, a project to get newly enrolled members to visit a primary care physician was turned on its head by interviews with homeless men who were adamant that visiting a doctor when you’re healthy is wasteful, while going to the emergency department makes a lot more sense.  In response, the design team pivoted away from designing a new clinical primary care service to a more decentralized ad hoc service. Why did they do so? They had a clear vision and commitment to try to serve their population to the best of their abilities.

Successful companies and successful leaders use processes most appropriate to the challenge they are tackling. For innovation projects or projects with uncertain outcomes, the process of human centered design make sense: fast, loose, driven by understanding the needs of people, rapid prototyping, pivots, and multiple iterations.

Common in these projects is a shared sense of purpose and a robust set of tools for any challenge. But perhaps the most important ingredient is empowering teams of a project: successful companies give general trajectory, but let go of the compulsion to micro-manage, giving teams and low- to mid-level managers plenty of freedom to plot their own courses towards shore. Compare it to the role of a conductor in a top orchestra. Great conductors give general direction – they articulate to the players the shore they are aiming for – but also know when to give a particular player very specific instructions. Micro-managing each player’s articulation, tone, and volume won’t achieve the conductor’s vision, and it will alienate all of the musicians.

Effective organizations wind up with a dynamic focus on long-term vision, which provides the organization with its goal, and short-term actions that enable quick team-based decision-making – without risking everything – that keeps the organization pointed towards the goal.