[Podcast] Failing is an Option in Business Execution

It’s ok to fail, but your customers should never see your failures.

Duration 29:00

 

Your company must be impeccable in their business execution to meet the ever-rising demands of the market and your customer. As a leader, to build an elite team that succeeds, you must empower your team to make mistakes but to learn and improve from them.

During this episode, Thor talks about three simple steps every team can take to make sure their business execution is impeccable.

1. Define what impeccable means to your team
2. Identify early wins and loses
3. Build in the capacity to iterate team behaviors to create agility

[Below is a transcript of the episode.]

Joel Neeb: Today, we’re gonna be talking about how we as a team can meet the ever-rising demands of the market. How do we appear impeccable to customers? In other words, how do we allow our teams to make small failures behind the scenes but ensure that those failures never make their way to the customer? And then last, how do we create that elite team that can adapt to an ever-changing marketplace and an ever-changing customer?

“You will not fly a perfect mission.”

JN: We’ve talked in the past about how I had a role as a fighter pilot and a trainer pilot in the United States Air Force for 17 years. And towards the end of my stay in that role, so around the 15th year in the Air Force, I was a lieutenant colonel and by that time when I was paired up with students and I get ready to go fly in a formation and doing a lot of instructing at that stage, I was often paired up with the weaker students in the formation. And if you think about it, it makes sense because I’m one of the higher ranking people in the formation. Typically, towards the end, I was the highest ranking person in, usually, the formations that I’d fly with. And it sounds great but what that really amounts to is that I was the one with the most experience and I was the one that they needed to rely on to help those students that maybe weren’t meeting the threshold in the previous lessons and the previous missions. I would need to fly with them to lean into their development and their training a little more aggressively and make sure that they made it through the program.

JN: Sometimes these students that I was paired up with were doing so poorly in this flying program that if they had one more bad sortie, that would be the end of their flying. In other words, if they do poorly today, their flying dream could come to an end and they’d fly a desk for the rest of their Air Force career. And you could imagine these individuals, this is an incredibly anxious moment because they’ve been dreaming about having this opportunity since they were kids. Since they were four years old, they’ve been watching all of the top gun movies, they’d know all the clothes from the flying movies, they have pictures of F-15s and F-16s on their walls since they were little kids. They went to the Air Force Academy. They did everything that they were supposed to do and here they were in the flying program that they had dreamed of joining. And if they don’t perform today, their dream could come to an end.

JN: Well, as that person is sitting across the table from me and we’re getting ready to brief and go fly the mission, I always start the briefing the same way. I say the following, “You will not have a perfect mission today. I will not have a perfect mission. As a matter of fact, in more than 2,500 missions, I have never flown the perfect sortie. I’m not expecting you to be perfect. I’m not assessing you on your ability to fly perfectly. I’m assessing you on your ability to adapt and react when the inevitable mistake occurs. You see, I do not expect perfection but I do expect you to be impeccable, there’s a difference.” Impeccable means we never allow our mistakes to affect the safety of flights. Or in your world, the mistakes that you make can never make their way to the customer.

Empower Your Team to Fail

JN: It’s important that we empower our teams with the ability to fail, with the ability to make mistakes but that comes with a caveat. We never make the same mistake twice so we have to have the system in the background that allows us to pivot and iterate and improve from yesterday’s performance and we never allow that performance, that mistake, that failure to affect our ability to appear impeccable. Whether that impeccable state is by flying safely and making sure that we come back from the mission or that impeccable state is by making sure that you always appear at your highest levels with your customers and never allow those failures to meet your customers, we’re both held at that high standard.

JN: Things are changing in the business world. More and more these days, the customers that we work with, they talk about how they are having a shift from a product model to a service model. And it doesn’t matter what industry you’re in, everyone is talking about the new customer expectations that exist and how it’s just shifting the entire marketplace. When we were working with Oracle recently, they said, “We’ve moved from data centers and something from a hardware perspective that we fully understood and we had a clear value proposition to this new service model and it’s like we used to sell cars.” They said, “We were comfortable selling a car. I could go through that complex sale of getting you onboard for buying that big purchase, making that big purchase and what that would entail and we would make the sale and we’d high-five each other and we’d sell a couple of cars in a time period but you didn’t have to sell a ton of them. You just got good at making that big sale.”

JN: Well, that’s totally changed now. And instead, it’s moved from us selling cars to feeling like we’re providing Uber services. And instead of selling the car, I’ve just gotta give you a ride and not only do I have to give you that ride but I gotta do it with a smile on my face and I gotta keep you happy the entire time and have a mint sitting in the back in a cup all there and a glass of water waiting for you as well so that you come back to our service, which is an entirely different business model than what we started with. And it requires an operational reboot for that to take place.”

JN: And Oracle is not alone in that conversation. Across every industry, companies are saying the same thing, “We’re moving from selling products to selling services.” Blockbuster wasn’t able to make that transition. Blockbuster video continued to sell products in their videos. Netflix stepped up and they said, “We are going to conform to the customer ecosystem. The customer wants us to come to them. We’re gonna first deliver the DVDs through the mail, we’re not gonna make you go show up at one of these outlets and pick it up from a brick and mortar store. We see everything moving to an online service based selling components.” And then when that wasn’t good enough, they said, “We’re gonna go to streaming content and we’re gonna provide that to you right to your mobile device and so we’re gonna even take one more step. You don’t even have to walk to your mailbox anymore, you just get it directly to your device.”

JN: In that example, Blockbuster wasn’t able to conform to this new system. Netflix was, and we see how successful Netflix has become. In the 1990s, there’s a popular theorem that came out and it’s called Moore’s Law, it’s from one of the founders of Intel, popular microprocessor company. And they said that Moore said that every two years, the microprocessors were doubling in capacity and capability. And that was pretty impressive at the time ’cause you… If you can imagine that if cars were, for example, doubling in their speed every two years, so every… You start off with your first car and it goes 60 miles an hour. Two years later, it goes 120, two years later it goes 240, two years later it goes 480. Those would be monumental advances in the leaps in technology that would require complimentary leaps in the supporting resources like the tires and the engine to support that.

Thor’s Law

JN: That was what was taking place with products in the 1990s. And it made it very difficult for the rest of the consumer ecosystem to keep up with those products. As those microprocessors were doubling every two years, it meant that we’re always having to innovate and create in anticipation of this massive leap forward in capability with the microprocessor. Moore’s Law doesn’t get talked about that much anymore. There’s another observation that I’ve had though, over the past five years of working with different companies and in every industry, and we’ll call that Thor’s Law. And that is, that instead of the capabilities of the hardware doubling every two years, the expectations of the marketplace are doubling every two years. The expectations that you and I have, are rising at an exponential rate compared to the products, the services, the capabilities of the companies that are out there.

JN: Let’s talk about a couple of examples. Amazon Web Services, they had an outage back in March. And if you remember this it was on front page news. It was in the Wall Street Journal, it was on every news media outlet was talking about it, social media talked about it. Amazon Web Services was out for four hours, and if you go do the research on it, they hadn’t had an outage of that type for about two years leading up to that point. And when the media got hold of this in the marketplace, the consumers got hold of this, they didn’t say, “Hey, golf club Amazon, you were able to keep the system running for almost two years, that’s phenomenal. What a great run rate, your uptime is phenomenal. You’re at 99.9% uptime. We’ll give you a mulligan for the four hours that you were out in March.”

JN: And of course, that’s not what they said, they said, “Amazon’s out for four hours, it lowers the stock price. Everybody is upset about this. They wanna know why an outage occurred.” Period. Instead of looking at the great historical rate that they’d had. And it’s because our expectation for that company to appear impeccable is so high. British Airways was another great example from the summer. If you remember back in June, British Airways had an IT outage behind the scenes as well, and that IT outage stranded customers and it’s gonna cost them about 100 million pounds because they had an IT system that failed for a couple of hours during June. And once again, the marketplace goes nuts because they didn’t appear impeccable to the market. They weren’t able to conform to the consumer demands.

Customer Expectations

JN: Recently, I was test driving a car and I had this exhibited for me as well because we’re not immune to this. You and I, both have this, the same high expectations of the marketplace. It’s not just the other guy who’s expecting all of this to take place. I’m in this car, we’re test driving a car and I had to buy a new one this month. And I’m sitting in the car with the dealer and he’s bragging to me about the navigation system inside this car, and it really was nice. He’s showing me this huge screen inside the car that took up a lot of real estate on the dashboard, and he showed me how you could zoom in on it, and it looked almost like a Google Map and just the incredible capability to show real-time updates for traffic, and for construction, and everything you could want from a navigational system, and that’s phenomenal. Really, really was good and a huge step up from what I currently had in my existing car.

JN: And the next question out of my mouth, what do you think that was? As he’s showing me how well this in-car system works for navigation. My question was, how’s that gonna integrate with my cellphone? What’s gonna happen when I get a text from somebody with the location on my cell phone, is that gonna automatically put that into the destination? Or can I just push that over to the car’s navigation system? He said, “Well, no. You can put… You can manually type in the address and put it into the car’s navigation system, but no, it doesn’t really talk to your car that way.” And I told him, “I’ll never use it.” And I wouldn’t because I’d rather drive around and hold my phone up and look at that destination using Google Maps or Waze, some application to get me there instead of using this gorgeous huge screen that’s sitting inside my car, because if they’re not gonna talk to each other, that’s not matching how and integrating to how I operate.

JN: And that’s the expectation that we all have these days. We all expect the system to conform around us. And what it requires is it requires the market to have a better understanding of the customer than ever before, and it also requires the market to acknowledge that yesterday’s innovations are gonna become today’s entitlements. The things that I would’ve been impressed with yesterday, five years ago, when I got my last car as I was sitting inside of that Lexus, if you would’ve shown me this beautiful navigation system that I saw a few weeks ago and all the capabilities, I would’ve been blown away, and I would’ve said, “Yeah, that’s exactly what I’m looking for, that’s fantastic.” Now, it’s an entitlement. I expect that to be in there and with… And it’s not enough for it to be a good product, it needs to integrate into my lifestyle.

JN: Louis CK, one of my favorite comedians, has a great joke about this and he talks about how he was on one of the first flights when Wi-Fi first became available. And if you’ve traveled in the past couple of years, you know Wi-Fi is both a lifesaver and a curse on long flights, because now you can do business and look at your emails and get everything accomplished that you need to during that flight. It’s a curse because now you can do business and look at emails and do everything you need to accomplish on that flight. It’s a two-sided coin. But Louis CK talks about being on the plane when they announced that Wi-Fi was available. Flight attendant gets on the intercom and says, “For the first time, we’re pleased to announce we’re gonna have Wi-Fi capabilities. That’s right. You can actually, while we’re flying through the sky, you can look at your emails, you can look at Internet websites, you can surf the net from the sky at 35,000 feet up.” And he said, literally, the crowd started cheering. They said, “That’s fantastic.”

JN: Fast forward, two hours into the flight and wouldn’t you know it, the internet goes down, the Wi-Fi dies. And he’s sitting next to this guy and the guy says, “What? No Internet?” And Louis CK said, “How quickly you became entitled to something that you didn’t even know about two hours ago. How quickly yesterday’s innovation became something that you felt entitled to.” And I think that reflects at how both… And a lot of us react in the marketplace. In other words, we’ve been the person in that chair that loses Wi-Fi and says, “That stinks. I’m entitled to that, that’s what we need.” But then we’re also the provider in our companies and where we work, where the market expectations are rising so quickly that we’re saying, “We can’t keep up with the demand. How do we meet that demand? How do we navigate what’s become a minefield for us?”

JN: British Airways will tell you, their IT system is a minefield right now. They’re just crossing their fingers and hoping they don’t bump into the next outage that’s gonna cost them a 100 million pounds and basically cripple the company. They literally just can’t survive one more of those things. But just like the Chinese character for crisis is both danger and opportunity, to the right companies, this challenge is an enormous opportunity. To the right companies, they’re gonna be able to transition and see that the market demands are rising so quickly and not be intimidated by that, but create the system behind the scenes that are going to able to anticipate the customer’s moves. Be able to anticipate how the customer ecosystem is gonna change. How you’re gonna have to integrate into mobile capabilities. How you’re gonna have to integrate to the new rising demands of the marketplace. Those companies that are gonna be able to make that transition and trust me, it’s a huge transition to make, are gonna be able to move from seeing the market and these opportunities move from a minefield to a gold mine. Move from a cost center, so in the IT example, they’re not just the group that keeps the email running and the lights on to a competitive advantage.

JN: And we talked to Delta Airlines recently, who we’ve been working with closely and if you look at what the CEO says, for one of their top critical leverage points their strategic factor that they’re gonna leverage for the next three years, the CEO Ed Bastian, he doesn’t talk about having the world’s best airplanes. He doesn’t talk about having more comfortable seats in first class, and how the meals are gonna improve. He talks about the technology behind the scenes that’s gonna integrate into each of our lives, which is just fascinating when you think about it because that’s not their business. Their business is in flying you and me across the country, across the globe, but instead of talking about how they’re gonna do that aspect better, they’re talking about how they’re gonna build applications and technology that’s gonna meet our consumer demand. So that when you go to book that airline ticket online, your customer service representation is completely fulfilled with an application. So that when the flight is delayed you get a text, so that when your luggage goes onboard the aircraft you get a text sent, to give you the warm fuzzy that your luggage made it and then the same thing happens when you get off the plane and it tells which baggage carousel it’s gonna go to as well.

JN: Here’s a Fortune 100 company whose business is flying people around the globe and is saying that one of their top three critical leverage points for success over the next few years is technology and they’re gonna use that to meet the rising demands of the marketplace and integrate into our ecosystem and to the way you and I operate in our mobile capabilities. They’re the group moving from looking at IT as a minefield to a gold mine. They’re the group that’s creating an elite team that can innovate because there are teams out there that do appear impeccable right now.

JN: When was the last time you logged on to Google.com and saw a site under construction? Or got a message that the site wasn’t up right now. Probably never, right? We work with Google a lot and I’ll tell you that behind the scenes they have been down a total of nine minutes in 13 years. Google.com, there’s been a total of nine minutes when you could have typed in that website address, gone to that website, and not gotten the typical Google logo and type in your search information below it. For nine minutes, outside of nine minutes for the past 13 years, they have appeared impeccable. But I’ll tell you, they are not immune from failures. We work with them and we see the failures, the challenges, the things behind the scenes that take place, but they know and they enable their teams and empower them to make mistakes but to never repeat those mistakes. They empower them to take chances and to be bold and to push and innovate in the next direction but they never allow those failures, those inevitable failures, to A, be repeated or B, make their way to the customer. They have a system that ensures that.

JN: In the last five minutes, let’s talk about how you create that system, much like we had to, we’re teaching students how to fly an airplane, we’re teaching students how to fly faster than the speed of sound. As you’re going in and out of the clouds and you’ve got four wingmen that you’re trying not to run into, and make sure that everybody is choreographed, in the execution of their flight and everybody sees each other and doesn’t go blind on one another, and all those challenges of manned flight in a three dimensional airspace going hundreds of miles an hour. And how we appear impeccable in that environment, to your environment, where you’re dealing with complex scenarios behind the scenes, where you’re leading projects and teams in a marketplace that’s changing around you, with customers who have rising expectations around you. Here are three ways that I want you to focus on to create that elite team that can innovate and appear impeccable.

Define Impeccable

JN: Step number one is to define what impeccable means to your team. When we work with some of the IT groups lately they’ll say, “It’s not fair. We’re being held to a higher standard than we were last year.” Oh by the way, that’s a higher standard than it was the year before, and when we look back at things, we’ve had IT systems that work 97% of the time. And they’ll say, “Last I checked, 97% was an A+, and yet the market’s telling us that’s an F. That’s not fair.” Well, we need to tell our teams to get over that. The market is going to tell us that that’s an F. They’re gonna tell us that yesterday’s innovations are today’s entitlements. We need to accept that right now. We need to realize that everyone is becoming that person that just received Wi-Fi on the flight and expects it for the rest of his or her life. We have to realize that those standards are going up and redefine impeccable for our teams. The first step is to tell the team what good looks like, tell the team what the new expectation is.

JN: And this is gonna be a challenge because you’re gonna have resistance here. You’re gonna have team members that are gonna say to you, “That’s too high of a standard, we’re never gonna be able to meet it, there’s not the technology or the system behind the scenes to support us meeting that high of a standard, that’s a stretch goal that we can’t meet.” But you’re gonna have to stick to your guns here because you wanted to find what good looks like and you wanna get them excited about what the opportunity is. As a reminder, you’re not just helping them to navigate a minefield that keeps adding mines to it, you’re helping them to turn this into something that’s a competitive advantage. You’re helping them to turn this from an afterthought within the company to one of the CEO’s top leverage points to enable customer success. That’s the good side of defining impeccable. You teach the team why they should be excited about building this new model and building this new standard for customers.

JN: The other side of that is having a conversation about what happens if we do nothing. When you define impeccable, the next question you need to ask is, “What happens if we don’t change?” Because you need to reinforce with the team that this is not just about your company that’s in transition, this is about an entire marketplace that’s in transition and if you don’t change, the market’s moving with or without you. And it’s a only a matter of time before you’re left behind, before you’re relegated, before you stop being seen as innovative. And at that point, no good things happen within that organization. People get laid off, the teams aren’t the fun, innovative, exciting teams to be a part of. We become a cost center, the minefield gets even bigger and the challenges get even larger as well. When we define impeccable, we’re both talking about why the team should be excited about what they’re building, as well as, what happens if we do nothing. You have to create the pain of not changing.

Identify Early Wins and Losses

JN: After we’ve defined impeccable, the second thing to do, is to ID, identify those early wins and those early losses. This is Change 101. You’re going to have pockets of success. Inevitably, you’re gonna have some challenges as well. You look at the popular change management model that Kotter built. This is one of the first few steps that we celebrate the early victories and you wanna be able to do this to show the team that we’re already having elements of impeccable appear within our system. We’re already having pockets of success and if we can create it in certain areas, then we can scale that to the rest of the organization. We recently debriefed $100 Million plus deal that went through with one of our companies, and we’re supporting this company in their pursuit of $100 Million plus deals and they had never had one this large before with a single client. I wanna say it’s about 50 Million was the highest that they’d had in the past in a single year with the client not… And they’d closed $100 Million plus deal and we were able to take that as an early win.

JN: And you can bet and you’d better believe that when they redefined what impeccable was for this team and said, “We can deliver value to the tune of $100 Million plus in the marketplace.” The team resisted it, and they said, “We’re not qualified to do that, we don’t have the system behind the scenes to support it.” And they got their inevitable early victory, that pocket of success, and were able to mine that pocket of success for the root causes for that big sale. We were able to mine it for the behaviors that that sales team was taking on that allowed them to show $100 Million plus of value to the customer, and allowed them to realize that opportunity within the marketplace. And we took that checklist and we gave it out to the rest of the team, and we said, “If you apply some of these same behaviours to your selling motions, you may not get that $100 Million deal right off the bat, but you’re at least gonna increase your average order value. You’re definitely gonna add more value to the customers and enhance the brand within the marketplace. And within, it’s inevitable that in some period of time, you will find the $100 Million opportunity as well.

JN: Because luck is not a part of the equation. What’s that great Jack Nicklaus quote where he said that, “The more I golf, the luckier I get.” The more we practice things, the more we mine our previous experiences for those pockets of success for those lessons learned, and apply them to the next iteration, the better, the luckier we’re going to appear, the more impeccable we’re going to be within the marketplace. We need to build in the opportunity to look backwards and identify those early wins to scale those, to mine those for the root causes, to share the behaviors with the rest of the team that worked. Build some credibility, build some momentum, build some excitement around the journey. If you’re looking at steps one and two, you’re saying, “We’re both defining what impeccable is. We’re defining our destination where we’re going as a team.” And from the first conversation, it’s gonna look like we’re going to the moon. But we’re gonna show over time that progressively, we’re getting closer and closer to that with the early wins that are taking place.

Iterate to Create Agility

JN: The third thing that I want you to do, is I want you to build the capacity to iterate, to create agility. It’s not just about having that one win. It’s not just about having a single $100 Million plus deal. It’s about teaching the team and scaling those successes so that becomes the new normal. If yesterday’s innovations become today’s consumer demands and entitlement, then we need to create the system behind the scenes that support that as well so that yesterday’s best practices are today’s new normal. The things that we did internally where we had pockets of success yesterday become our standardized behaviors for how we operate today. You iterate to create agility with your team. You equip them with the skills to start marching towards that impeccable destination. It’s simple. It really is simple, but it’s not easy. And it’s gonna require a lot of upfront work as leaders on these teams to help push them in this direction. But if you can do it, you’re opening up the opportunity and making that transition from the minefield to the gold mine to move from being looked at as from the cost center to a competitive advantage, and creating an elite team that can continue to innovate.

JN: And pretty soon, once you’ve gone through these steps, you’re gonna be able to take your hands off the steering wheel and you’ve created the new culture that moves in this direction by itself. And that’s when things get really exciting. Because now you’ve shifted from a group that operates to a group that innovates, and you’ve created a system behind the scenes to allow that. Once again, those three steps to start marching down the path to appearing impeccable. Those three steps to begin to meet those ever-rising consumer demands. Number one, define what impeccable is. Number two, ID the early wins, those pockets of success and mine those for root causes to scale to the rest of the team. And then three, iterate to create agility. Take those pockets of success, scale those as new best practices, standardize those so that yesterday’s best practices are today’s standardized behavior.

JN: Ladies and gentlemen, if you follow those three steps, you’ll begin to create teams that appear impeccable within the marketplace. Whether you’re flying airplanes faster than the speed of sound, or you’re dealing with ever-rising demands of the customer, we’re able to create a system that supports that impeccable destination.