What are we going to do?

We were in the home stretch as they say. A close associate and myself were working with another party--on site at their company's headquarters. After several months of intense interaction and alignment between multiple parties on a project we were at a phase where we felt it was just "crossing t’s and dotting i’s."

And then "the call" came; two of the four firms involved with this project were no longer interested in the partnership. We had come so far and so much had been aligned, the vision of the collaboration was one that was very positive, folks were upbeat…”Hopes dashed like ships smashed on a rocky shoreline.” (Well maybe that is a little dramatic.) My associate looked at me and said: “What are we going to do?”

What jumped in my mind was a training patrol from over a decade ago in Army Ranger School. We were set to take down a mock missile site in the dessert at 2300 hours. I was the patrol leader and we had a solid plan as I had just returned from the Leader’s Recon and had sketched out the enemy positions. But upon returning from the Recon to the ORP, I discovered the entire Platoon was asleep!

Moving as quickly as possible, assembling the team and moving them towards the objective (which was over 1 Km away) and I realized we would not be able to set up over watch positions and arrange the assault in parts as we planned. I turned to the Ranger Instructor, both of us at a dead run in the scrub brush of the desert, and asked for an extension.

He looked at me as the objective came in sight and said “Ranger, why do you need and extension?

You still have five minutes…Take it down!”

So we did.

You can still knock down some pretty large trees with a stone axe

Last year I read a very interesting book titled 1491.

It is an in depth view of indigenous civilizations in the Americas, "pre-contact." One of the interesting pieces I remember is the treating of the introduction of iron axes by the Spanish to some of the populations in the Amazon basin who had been using stone axes to fell trees. The iron axe dramatically increased their capabilities and subsequently their livelihood. The book indicated an effectiveness of the iron axe such that one chop of it was equal to about 100 swings of the stone axe.

There have been plenty of times over the years when I've felt like one of those pre-contact Amazonian folks--"swinging with a stone axe" and all. Then again, I have to consider that regardless of how much more efficient those iron axes must have been, they were still able to knock down some pretty large trees with those stone axes.

Troop Leading Procedures

Several weeks ago I met with a fellow West Point Grad to discuss possibly working together on an entrepreneurial venture. As this potential venture entailed providing executive management to multiple middle market sized companies we had a very lengthy and involved conversation around leadership and management philosophy and approaches.

A theme that quickly surfaced in our talk was the usefulness and applicability of several leadership concepts and approaches we learned in the US Army and how well they had served us both in corporate America. We both found enormous benefit from those lessons learned in our personal experiences as executives. I would imagine this is a very consistent theme among experienced executives with military service backgrounds.

One such approach that I have found very useful over the years is the Troop Leading Procedures or TLPs. TLPs were initially taught to us at West Point and reinforced for leadership in the US Army education system and publications for NCOs and Officers at all levels. I have personally used TLPs on countless occassions as a key element in my own personal problem solving methodology.

I have listed the Troop Leading Procedures below:
Step 1. Receive the Mission

Step 2. Issue a Warning Order

Step 3. Make a Tentative Plan

Step 4. Start Necessary Movement

Step 5. Conduct Reconnaissance
Step 6. Complete the Plan

Step 7. Issue the Complete Order

Step 8. Supervise

This quick set of steps is both simple and powerful at the same time. Whether they are applied to something as straightforward as solving a technical escalation with one of your products at a customer site or whether applied to a complex and comprehensive task such as creating an industry differentiated product. If you take a step back and consider this as an approach in your problem solving tool kit you can truly see the usefulness.

Some steps may not seem directly applicable to a business problem, but in fact are very good tie-ins. In the Army “Step 5. Conduct Reconnaissance” obviously involves using a map, aerial platforms such as a helicopter, scout teams and such…all oriented at seeing the terrain. In business, you use a variety of marketing intelligence tools to achieve the same result to view the market landscape you need to navigate through to complete the mission. Examples of this could be interaction with customers, review of macro marketing materials, discussions with key partners in the industry, etc.

As I mentioned earlier, this type of approach is one that becomes a part of how you think and act as a leader. It becomes not only a mental process but part of one’s leadership instinct and manifests itself in all aspects of your approach to decision making and problem solving.

Here is an example:

The COO at a former employer, who I reported to, called me one day and said “We have a potentially serious issue with a very large customer, there is a meeting scheduled this afternoon and I need you to attend, take over the engagement and solve the problem.” (Step 1. Receive the Mission)

I attended the meeting and after an initial introduction of the topic at hand informed the other executives at the session that I would be taking accountability for this customer problem and seeing it to resolution. I then informed each of them what I thought their role should be and the help we would all need as a team to solve the problem. (Step 2. Issue a Warning Order)

As this specific issue at hand involved intellectual property and potential litigation as well as the need to turn around a very negative customer situation we then worked together as a staff to identify different paths to resolution and vetted these options with each other. The meeting concluded with an agreed upon series of actions needed and assignees to be worked on over the next several days. (Step 3. Make a Tentative Plan) 


Since there were multiple functions as constituent stakeholders involved I then reached out to several of them and began to ask them to answer some key questions at hand, to include calling the account executive for this customer and asking for him to summarize his view of this specific engagement thus far and to set up a meeting with the customer for the following week. (Step 4. Start Necessary Movement)

Over the next several days we met a couple more times as a team and reviewed the information that each member of the team had gathered regarding the issue from a variety of different functions. Additionally, I personally called a senior level executive contact I knew at the customer to source their perspective and additional information they might have. (Step 5. Conduct Reconnaissance)

Our planned on site meeting with the customer was on a Tuesday. The staff met a final time on the preceding Friday, reviewed the problem statement, courses of action that were proposed and using the information gathered over the last several days we decided on the action we would take and subsequent proposal and associated presentation we would deliver to the customer. (Step 6. Complete the Plan)

At the onsite meeting with the customer we reviewed the issue at hand and summarized our view of both parties positions before launching into a formal presentation on our proposal to solve this problem and begin to work in a much more collaborative manner with this customer. Our proposal was accepted and implementation dates were aligned. (Step 7. Issue the Complete Order)

We implemented according to the planned timeline and had structured executive level meetings between key members of our team and the customer’s representatives over the next several months. (Step 8. Supervise)

The net of this was that by following a leadership approach learned approximately two decades ago and first used as a Second Lieutenant I was able to quickly organize a fragmented set of internal constituents, engage with the customer, gather the necessary information to make an appropriate decision and deliver a solution to the customer that was a win-win answer to a very difficult and contentious problem.

The Equation

Just yesterday I was in a conversation with some folks at a very innovative automation company in the material handling industry. This company has been growing at a rapid clip since their founding in 2006 and they believe they are on the cusp of a breakout period of expansion. The product and system seem to be truly revolutionary to me and as we discussed their impending need to scale and continue to serve customers in the nature they have in the past but also grow their aftermarket business in a profitable manner I continued to reflect on “The Equation."

I have created and led multiple business units serving high tech manufacturing industries over the last decade. Those businesses have had constant growth, typically averaging around 15% revenue growth annually with profitability always growing at a higher percentage. I attribute the success of those businesses, at least in part, to the adherence and application of what I refer to as “The Equation."

Simply stated:

This is not a direct mathematical equation, but more of a business philosophy describing a proven approach to differentiating an enterprise in the marketplace.

What “The Equation” says is that delivery of both Material and Labor required to secure a customer's business, but it is not sufficient to defend that business against the competition.

Sustainable competitive advantage is attained by the application of both Speed and Knowledge by the enterprise such that the result saves the customer Time and/or increases his Yield.

The good news about the discussions yesterday is that I did not need to emphasize the first point with the folks I was with. They got it! But surprisingly enough I have worked with a great number of executives in the past who just don’t “get it.”

Comments like “spares sell themselves” or “I get good enough margins on my labor business” highlight their lack of understanding of establishing sustainable competitive advantage.

Spares (or delivery of Material) can sell itself…but is very susceptible to competitive threats and commoditized pricing pressure. Just using Spares as an example, imagine the difference in your business model and resultant customer satisfaction level when you are able to deliver the Material support with more Speed and save the customer Time.

Every hour of Time for a customer has both an opportunity cost as well as a production loss cost associated with it. Take this a step further: your Material delivery is truly differentiated when your company holds the Knowledge to apply the Material or the Material itself is high in Intellectual Property. With the application of your Knowledge, you have either created a barrier to entry for other entities or you have created a situation of trust and reliance with your customer by increasing his Yield (which of course can be even more fruitful).

How about that Labor business? Imagine a supplier that can provide Labor to support a customer and another that supplies Knowledgeable Labor. The Knowledgeable Labor differentiates itself by having more technical capability as well the ability to solve more complex problems which allows for both Time savings and Yield increases for the customer.

Not only does the second supplier typically win the business and hold on to it longer, but this kind of supplier is also are able to achieve a much more favorable pricing scenario for their service.

This is the kind of scenario that has been the foundation behind the business growth programs I have led via relationship based business models in the past.

Average companies and businesses typically orient their thinking around the concept of delivering products and services to a market and a customer base. Most of them understand that an application of intellectual property is a differentiator, but very few comprehend the totality of integrating Speed with this Knowledge and its effect on their customers.

The higher level of abstraction thought here is that a business should be oriented on solving a customer’s problems as opposed to providing a product or service. When a business focuses on saving a customer Time and increasing his Yield, they start to realize that simply supplying Material and/or Labor is not enough. The differentiators are always Speed and Knowledge applied to the delivery of the Material and Labor.

It was very refreshing to have in-depth conversations with a management team that truly grasps these concepts and has been building a fast growing enterprise around with the same approaches that I have described in “The Equation.”