The Rip Van Winkle Question

Several years ago, I become responsible for a reasonably large business.  As you’d expect, the team regularly reviewed progress using a series of reports full of numbers.  Page after page of them, with thousands of numbers, analyzing performance by region, by pricing level, by licensing model, by customer type – you name it.

To an expert, these reports were filled with wonderful nuggets of insight.  Wow, what happened to sales in Germany last quarter – why did they tank even though the competitor’s results were strong?  Clearly, the Japanese sub is the only one leveraging the price increase – their average revenue per unit is spiking while everyone else is just plodding along.  And so on.

To somebody who was not expert (i.e. me), it was just a wall of numbers that didn’t convey much of anything.  To get a sense, check out a report like this one.  If you are an experienced investor, or used to reading accounting statements, you can glance over it and almost instantly you know a lot of interesting things about Google as a business.  If you aren’t, your eyes probably glazed over and you are hoping there won’t be a pop quiz at the bottom of this blog post.

In my case, I didn’t even know what half of the numbers on the business reports were about.  What the heck was the “PSP attainment vs. seasonality adjusted target”?  Did it matter that we seemed to be below what we had originally expected?  But I had to get smart quickly – these reports were the lifeblood of the business.  It’s like a medical chart to a doctor; they can spot patterns that reveal what is happening to their patients.  I had just become the doctor for this business, and I needed to know if the patient was suffering from any serious illnesses, so I could do something about them pronto.

So How to Start?

The best technique I’ve found is what I call the “Rip Van Winkle” question.  If you aren’t familiar with the short story, Rip was a man who fell asleep for twenty years, and found that the world had changed dramatically when he woke up.

What I did was to take every important angle on the business and find somebody who was really smart about it.  Then I sat down with them and asked the key question: “if you fell asleep for a year or two, when you woke up, what are the first things you would look at on this report to understand how the business is doing?”  Over and over again, I got amazing insights by asking this.  “Well, the first thing I’d do is look at new sales in the enterprise segment to make sure we are getting growth instead of just milking the installed base.  Then I’d divide that by the number of units for a quick check that our price was holding up and we’re not jacking up sales with deep discounting.  Then ….”

I did this walk-through with around 30 people, for a total of some sixty hours of discussions.  Finance people told me how they analyze the finance numbers.  Customer service showed me how they track and assess problems and customer satisfaction.  Sales managers talked about the pipeline and performance and hiring.  Often, different people would take me through the same report, and come at it from radically different directions.  I took copious notes, but I always asked for the top 2-4 things they would look at first.  I would highlight and number the places that held the answer.

Vital Signs

It turns out that for just about any report, even if it has hundreds or thousands of numbers on it, there are a handful that really tell the crucial story.  The rest of them might be useful to support the story or diagnose a problem, but you mustn’t get distracted.  In medicine they call them your vital signs – tell me your pulse and whether your eyes dilate and a couple of other things that can be measured by an EMT in seconds, and I will know if you are basically ok or deeply traumatized.  I may not know if you had a stroke or a concussion, but I’ll have a good basic sense of how you are doing.

This technique hinges, of course, on finding insightful people with an intuitive mastery of the numbers.  I could never predict who it would be from the org chart – they might be high up or buried deep.  But the people who worked in that area almost always knew whom I should talk to.  Ask around!  Once I found the right people, they were usually happy to share some wisdom with an interested and enthusiastic listener.  Buying them lunch never hurt, either.

By the end of those sixty hours, I was pretty darn good at diagnosing the business from the numbers, because I had learned from such a wide range of experts.  The process also turned out to be a useful diagnostic tool in its own right.  If I couldn’t find anyone in an area with great insights to share, chances were pretty good this was a side of the business that wasn’t being managed very well.

What I’ve learned by doing this exercise many times is that project reporting is almost always far too detailed – it’s like the old story about writing a shorter letter if you had more time.  It’s very hard to distill a lot of complexity into a tight report that shows only the key things – that means you have to figure out what those key things are (and have confidence that you didn’t miss anything vital!) – so most people cop out and throw in the kitchen sink.  As you are ramping up, think about how to cut way down on the amount of information being reported.  More is definitely not better, when it comes to metrics.  Einstein’s famous dictum applies perfectly here – “make things as simple as possible, but not simpler”.

The next time you have to get smart about a report full of numbers, give the Rip Van Winkle technique a try, and see if it works as well for you as it has for me.

Manage Your Firedrill Capacity

Ah, the firedrill – that urgent project that your team has to scramble to get done by the deadline.  Everywhere I have been, they are an inescapable fact of life.  “We just got a key customer meeting and we’ve got to have that demo ready!”  “There is a VP review of the project next week and we have to nail it!”  “I need this analysis done tonight for the board meeting – they said we have to cover this compete angle!”  “Our customer’s site is down and we have to get them back up ASAP – drop everything!”

Some of this is inevitable – things come up, so you have to rise to the occasion and get it done.  But some teams seem to exist in perpetual firedrill – life is just an endless succession of crises and it feels like a treadmill; you never get the chance to move forward on the really important projects that could be game changers, because you are running as fast as you can to handle the constant stream of do-it-now projects that bombard you.

How much you can control this problem depends on the role.  If your job is to fight fires (literal or metaphorical), then maybe the firedrill is what you do.  But if your work is more project-oriented, my guess is that a lot of them could have been anticipated and avoided.  That’s been my experience.  Test it for yourself – keep track of the firedrills you are pulled into for a couple of weeks, and look over the list.  How many of them really came out of the blue and could not have been avoided?

The Magic Wand: Designing Good Systems

Systems and processes can make life miserable and are one of the things that people complain most about.  They can get rigid, bureaucratic, and generally suck the spirit and energy out of life.  BUT … they are the critical tool that can eliminate firedrills, if they are done right.  What I’ve found is that you must design them thoughtfully, hone them until they cause the minimum of friction, and throw them out when they are no longer adding value. You probably will benefit from a system when something is predictable, repeated, and complex.

  • Predictable: hey, it’s a new year and we have to get our plan landed – wow, who could have seen that coming?  Excuse me, but it’s been on the Gregorian calendar for around 430 years, so this really shouldn’t catch you by surprise.
  • Repeated: if you do something once, then designing a system may or may not pay off.  If you do it over and over again, you don’t want to lose the hard-won lessons of the past.  Figure out how to do it well and bake it into a system so that you don’t have to think about it.  We’d never be able to function as human beings if our bodies didn’t do this constantly – we couldn’t walk, talk, eat, read, or write.  We spend much of our early childhood evolving our neural systems to master the key activities needed for life – think about how helpless an infant is.  Reinventing the wheel every time you do something keeps your team in perpetual infancy.
  • Complex: if it’s trivial, you may (may!) not need to remember how to do it.  But as things get complex, you are wasting enormous amounts of time and operating very inefficiently if you don’t capture that knowledge into a system.

Firedrills are a great indicator that you need to do something – jotting down a line or two about each one will take you less than a minute a day and looking the list over will help you diagnose places where you have a missing system or a failing one.

Don’t Waste Your Firedrill Capacity

Every team has some capacity to absorb firedrills.  That capacity increases as people are more committed to the mission.  It increases with confidence in the team leadership – people figure that if the leaders say something is important, it probably is.  But if you burn through that capacity too often, or you waste it on things that are obviously just screw-ups in planning that could have been prevented, you’ll pay the price.  People will get grumpy, cynical, burned out .. and eventually will leave the team.

So manage that capacity.  Fill the tank by fostering trust and commitment.  Avoid burning it up on dumb things that you could have avoided with some thoughtful planning.  Come clean when you screwed up and the team has to pay for your mistake.  And then when you really do need them to commit heart and soul to pulling off something heroic, the team will be right there with you, ready to dig deep and gut it out.

Use the “Pet Rock Principle” for your next project review

Ah, the project review.  Like death and taxes, if you work in a larger company, these are probably an inevitable fact of life – at some point, and maybe quite frequently, you have to get in front of somebody senior and give a review of the state of your project.  At Microsoft, the ritual of the “BillG Review” was woven into the culture when Bill ran the company.  Your review might be anything from a routine monthly status update to a high stakes undertaking with people who have the ability to cancel the project (and/or fire you).

Designing a great review is complex and involved; you want to tell a compelling story that resonates with your audience, to distill the work into its essence, and to convince that the team is executing well and should continue to get support.  These reviews can take on a life of their own and soak up tremendous amounts of time that could be (much) better employed in getting the darn work done, rather than talking about it.  This is one of the reasons that small organizations can be more efficient – they don’t need to prepare reviews of the work they are doing, because everyone is too busy getting it done.

Enter the Pet Rock

To avoid getting bogged down in an expensive manage-up exercise, when I’m preparing for a review I try to stay focused on what I call the “pet rock” principle.  If you didn’t grow up in America in the 1970’s, you might not have heard about the pet rock – it was a hilarious (and self-mocking) fad where people bought a rock, instead of a real pet, because they are much less trouble to take care of.  Pet rocks were very good at some tricks – as the instruction manual explained, they excel at “sit” and “stay”, but struggle with “shake hands”.  Since the pet rock is an iconically useless object, it seems like the perfect stand-in for some members of senior management, as seen from the trenches.

The principle that’s guided me through many reviews (on both sides of the table) is that most of the value from a really good review would be achieved if you replaced the audience with a pet rock.  In other words, the review should be mostly designed to benefit the team, not the reviewers.

As easy as it is to get cynical about reviews, they can be a valuable exercise.  They force you to:

  • Articulate the goals, strategy, and execution plan for the project.  As I have repeatedly advocated throughout this blog, there is magic to writing things down.  It forces you to think much more carefully and systematically than you usually do.  A review is a great opportunity to tell your story to your own team.  Usually the leaders of a team assume that everybody “gets it” .. and often that isn’t true.  It’s incredibly valuable for the team to walk through the vision, the strategy, and the plan.  From research in advertising, we know that people do not absorb a message until the third exposure (and some studies have yielded much larger numbers).
  • Distill the essence of the work.  Senior people generally get bored easily, so they won’t let you maunder on at endless length about what you are doing.  They want it summarized into a succinct and effective form.  Figuring out how to capture the work you are doing in a tight and lean format is a powerful exercise.  And it’s hard.  Often you won’t bother to do that work until you have a forcing function, and the review can be that forcing function.
  • Enumerate top issues/risks and what is being done about them. It’s easy for teams to get desensitized to their biggest problems.  “Well, yes, there is a blazing fire over there that threatens our success, but it’s been on fire for a while and we just don’t have time right now to worry about it.”  Reviews can force you to think those problems through and make sure you have a plan to resolve or mitigate them.

An excellent review can be a morale booster that reminds everyone of the exciting mission that they are on.  It can identify issues that are falling through the cracks, and can help you to hone your execution.  Mostly, that isn’t how it works, though – they provide modest benefits (at best) for the team, and they represent a bunch of overhead that saps precious reserves of energy and enthusiasm.

So if you are pulling a review together, see if this principle helps you stay focused.  Constantly ask yourself whether you are working on something you would truly continue to do if there were a pet rock presiding over the review.  When the answer is no, you are just managing up.  You may have to do some of that, but the more you do, the less you are advancing the organization’s true interests, and the more you are creating the overhead that everyone complains about.

Omit needless work .. and remember the rock!