A Strategic Framework for Lasting Excellence

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In my teens and twenties I was an avid hill-walker (hiker) and occasional mountaineer (ice axe, rope and crampons).  Nowadays time, dodgy knees and lack of fitness limit my adventures, but my fascination with mountains and mountaineering history is undiminished.  18 months ago I was lucky enough to make my first trip to Nepal to see the awesome 8,000 metre Himalayan giants and I’m looking forward to returning, both to trek and in my capacity as a Trustee of a charity that supports schools in remote mountain areas there.

For me mountaineering analogies aptly describe the challenges of business.  If you were on the organising committee or a team member setting out to climb Everest or, even more difficult and dangerous, the world’s No 2 peak, K2, would you:

• Select an expedition leader you didn’t trust, or one who was an egotistical bully who insisted on making all the decisions themselves without consultation?
• Select team members who couldn’t get on with each other?  This is a frequent cause of mountaineering failures and sometimes tragedies.
• Fail to pick the strongest available team for the expedition due to petty politics and prejudices?  This happened for example in the British expeditions to Everest in 1922 and 1924, with ultimately disastrous consequences.
• Fail to train and get fit?
• Take along team members who were manifestly unfit, for whatever reasons?
• Fail to consider and plan for reasonably predictable eventualities that could jeopardise the expedition or, more importantly, lives?
• Go at a time of year when the weather was guaranteed to be bad, or stay too long into the monsoon season to try to complete the climb?
• Fail to acclimatise once you were there?  Altitude sickness, often caused by moving too fast and staying at high altitude too long, is a major issue.
• Take people with you who lacked serious experience of mountaineering? Summiting Mount Everest has become a tourist industry in the last 15 years and sadly has caused far too many fatalities of guides and sherpas as well as some of their clients.
• Not bother to work out a safe route up the mountain before you set off or understand the topography of the mountain intimately, including safe evacuation routes in the event of bad weather, avalanche or other unexpected dangers?
• Not work out how you were going to get everyone safely off the mountain after you’d got to the summit?  Most accidents occur on the way down.
• Not bother with a map and compass?
• Not take enough emergency provisions?
• Use experimental, unproven equipment?
• Change the expedition leader 2 or 3 times during the expedition?  This can happen on mountaineering expeditions, normally out of necessity due to injury or illness rather than because the team or organising committee back home decide the leader isn’t up to the job, though that is not without precedent!
• Change the route up the mountain every time the expedition leader changed?
• Ignore existing knowledge and experience, and try to climb the mountain by the most direct and dangerous, unclimbed route?
• Once on the mountain persist with a route of ascent that was clearly unsafe and impossible?
• Press on when weather was bad, there were insufficient supplies, and not enough hours of daylight to complete the climb to the summit, driven on by your ego?  This is how the world’s then greatest climber George Mallory (a husband and father of three young children) and his inexperienced 22 year old climbing partner Andrew (‘Sandy’) Irvine died attempting the first ascent of Everest in 1924.

You get the picture.  All these points reflect real situations.

The history of mountaineering is littered with cautionary tales, most of them involving human weaknesses – classically misjudgment, lack of planning, poor leadership, internal rivalries and politics, ego, under-preparation or foolhardiness.

Many companies are guilty of the business equivalents of such ‘own goals.’  Is it any wonder that only the Top 1% (almost literally) get it right?

• A 2007 McKinsey study found that only 0.8% of companies analysed consistently outperformed their competitors on both revenue and profit growth for at least 10 years.
• Jim Collins’ ground breaking study ‘Good to Great’ (2001) looked at the reasons why only 11 companies out of 1,435 (curiously also just under 0.8%) listed on the NASDAQ between 1965 and 1995 achieved cumulative stock returns for at least 15 years of at least 3 times the market after previously achieving cumulative stock returns for at least 15 years at or below the market.

So here’s a robust, experiential strategic framework for lasting organisational excellence:

• Firstly recognise and accept that no matter what technology is prevalent at any point in time business is about people, and the principles of sound business are timeless.  So learn from others, including our predecessors.  Avoid getting caught up in the ridiculous cycles of hype that sweep business every so often, like the dotcom bubble 15 years ago, in which the current generation scorns past generations and insists we’re now in a brave new world in which we can defy gravity and do what we want.  This is a counsel of stupidity repeated millions of times in human history with generally dire consequences!
• Discover, or rediscover and plug back into your company’s values.  You can only discover them, not dream them up and impose them on others.  They are not your personal values, or the C-team’s values; they are the company’s values, owned by its employees as a whole.
• Select good leaders – selfless, humble, yet fiercely determined, often grossly underestimated people who enable and inspire teams of people to perform way beyond what they previously considered themselves capable of, and who build mechanisms that allow the company to prosper after they have gone.
• Cultivate good leaders at all levels in the company and, unless there are compelling reasons not to, promote from within.  The appointment of leaders from outside the business is generally negatively correlated with improved long-term organisational results.  Alignment with the company’s culture and values, and consistency in applying long-term strategy independent of individual leaders, is crucial.
• Pursue business strategies that your company has the skills, knowhow and passion to be outstanding at, based on hard evidence, not hubris.
• Understand, adopt and stick religiously to Toyota’s Five Principles of Lean Thinking.  Lean is badly misunderstood and is invariably misapplied in the West.  It is NOT a tool for reducing cost and increasing efficiency, which is a dangerous, internally-focused mentality.  It IS a tool for inspiring employees to create customer-focused businesses (an outside-in perspective) and to progressively reduce or eliminate ‘waste’ (the Japanese word is ‘muda’), defined as anything that does not add value from the customer’s perspective, in the form of unnecessary transport, inventory, motion, waiting, over-processing, over-production or defects.
• Implement business and operational metrics that are customer-focused and customer-driven.  They must start with the end-to-end (E2E) customer value chains (CVCs) and provide clear, timely data on key performance indicators in the eyes of key customers.  If you do this well it will not only become obvious what operational performance improvements are required, but it will also force you to interact with customers far more and thus insure your relationships with them and dramatically improve your understanding of their needs.
• Avoid top-down managerialism and bureaucracy at all costs.  Cultivate assiduously and sustain a culture of self-discipline and entrepreneurism so that your best people never become disillusioned and feel the need to leave, and your business has a buzz that magnetically attracts great people.
• Use your company’s entrepreneurial culture to test assumptions and new ideas by exposing them rapidly to customers in dialogue and in prototype products and services.  This is the so-called ‘fail fast’ or Lean Startup approach and it will save you huge amounts of time, cost and angst, as well as building significant competitive advantage.  Its power arises partly because it runs counter to human nature, which tends to believe it has the full answer when it only has a partially complete jigsaw and is afraid to expose anything to possible ridicule or rejection.  So have the courage to go against the flow and you will reap the rewards!

Mountaineering is one of humanity’s most epic endeavours.  The best mountaineers are the ones who achieve repeated successes and stay alive, not the heroic or ignominious failures or the tragic, often unnecessary fatalities.  Getting it right is not rocket science, but neither is it easy. Well-informed, intelligent, quiet, undemonstrative tenacity is the key, as it is with business.

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