Capability
Love that Potential!
A long time ago I studied engineering, mechanical engineering. I loved the subject and the lenses it brought. It was and is about transformation, solving problems, creation, leverage, and making new things that work and making old things work better. Engineering teaches how to open the hood on what we observe and appreciate the many systems at play when something happens or doesn’t happen. Later on, when I studied business, the engineering lenses were very helpful again, but now I could apply the business lenses to the engineering world and, wow, I could really see great stuff happening.
I recall several lectures on the subject of energy, particularly the contrasts between potential energy and kinetic energy. Basically, potential energy is work that we’ve done (force stored in a bottle) that is in a state that can be used to work we want to do (make something go or move), kinetic energy. Some may bristle at this folksy definition, but it will do for now. The battery in our car has potential energy stored that can be unleashed to turn a motor to start our car. When the car is running, it turns a generator that sparks the plugs (so that we can use the potential energy in the fuel) and returns some energy back to the battery for storage. Our bodies do the same thing with what we eat. By the way, if we let the battery stand around long enough it drains and loses the potential energy inside (sort of leaks out slowly). All the potential is gone and has to be recharged or replaced. Use it or lose it.
The business lens is the same isn’t it? We hire, develop, train, build capability and skills, staff up, put money away, and buy all kinds of equipment and supplies, right? All of that has lots of potential. Why? We do so use it to start and run our processes, projects, and respond when necessary. We make it kinetic! In doing so, we trade the deliverable for another type of potential energy, money. The cycle goes on and on between potential to kinetic and then again, but not always. We tend to waste lots of kinetic energy in activity that doesn’t produce something. We also leave lots of potential underutilized, and if it goes too long before we use it, we may find it as useless as a dead battery.
So,
- Do we know how well we build our “potential energy” within the enterprise?
- Where is that potential stored? Is it available and convenient?
- How much potential is leaking out and becoming unusable?
- Do we buy or build too much potential? Do we know?
Living in Florida, we need to prepare for hurricanes. We store potential in batteries, fuel, food, even a generator. If you ask me where they are stored, I would have to show you, because they keep moving from potential to kinetic and replaced with fresh potential capacity. Otherwise, they will be of diminished value when we really need them.
Do we have storms in our enterprises?
Fast Times with Heisenberg, Gretzky, and Carroll
Ever hear of Werner Heisenberg? Unless you are one of those people (confessed addict here) that is curious about lots of stuff, in this case quantum mechanics, you may not really care. Quantum mechanics has to do with the behaviors of the really small, what some physicists look at. What is really interesting about Heisenberg is a principle about measurement he developed, the Heisenberg Uncertainty Principle. He says that the more you want to know about a particular attribute like position (where it is), the less precision you will have about another attribute like velocity (how fast it’s going in a particular direction). I’ve believed for a long time that it is true about bigger things than the subatomic. It is true about what we measure and evaluate in our business performance. Stay with me, this may help.
One example is akin to the example above. The overwhelming majority of business data that I’ve been exposed to focuses on where performance has been, say position. That is important since we need to know what our demonstrated capability to perform is. The more we know about position, the less we can say about how fast it is moving in a particular direction, velocity. Our performance has a velocity, and depending on what aspect of velocity, a very specific direction. The velocity going forward is not usually the trend; it can sometimes require a little more calculus than algebra.
In fact, performance has multiple directions; the most obvious are cost, time, and quality. We can say with complete certainty that they move at different velocities (it’s a safe bet). The really important point is that we seldom, if ever, look at the velocities for decision making. Agile people and entities do. They also keep that part a secret (it’s called competitive advantage). If you follow sports, you may have heard the quote by the hockey great, Wayne Gretzky, “I skate to where the puck is going to be, not where it is.” Since Wayne has to manage his own velocity he needs to manage it to where he needs to be, at the puck. Applies to our businesses, doesn’t it? Performance decisions only affect the future, where stuff is going, not the past (unless you’re a good book cook).
I’ve spent the better part of the last two years on this topic and it has fundamentally changed my lenses to evaluate performance, capability, metrics, dashboards, product development, voice of the customer, innovation, competition, negotiation, human resources, … ad infinitum. Looking at the world through that different lens and feeding it through a different dashboard also changes our insight into where the ugly risks are and where to invest resources and time on improvement strategies. Additionally, the velocity lens redefines the applicability of gaming theory and network analysis in business decision making. These are really cool beans.
No reminder needed that the world of leading and managing enterprises is fraught with ever faster changes.
- Do we know how fast?
- When we execute the changes we’re deciding to make today, will we end up where the puck is going?
- Do our project controls and toll gates enable or constrain our ability to respond to an ever moving puck? Do scope creep, change orders, restarts, and rework sound more like the rule than the exception?
“The faster I go, the behinder I get”. “You have to run as fast as you can just to stay where you are. If you want to get anywhere, you’ll have to run much faster.” “Now, here, you see, it takes all the running you can do, to keep in the same place.” Lewis Carroll
So, where are we going?
