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Due Diligence is not a Strategy! Paralysis by Analysis Dale Dauten is one of my favorite writers. His weekly syndicated column is titled Corporate Curmudgeon. A few years ago his column – Who put the Rat in Bureaucrat?, is, in my mind, a classic for all times. His writing last week (June 15, 2003) was stimulating and timely. This column – Innovation Comes from Exploration – started with the following lines: “Perhaps the most underrated sentence in our language is this: “I don’t know.” The voice of practicality asks, “What good will that do?” The voice of adventure answers: “I don’t know I just know I’m going to try.” His column closes with the following sentences: “The people who accomplish the most are rarely the most visionary, just the most experimentary, the ones who say: ‘I don’t know. Let’s do it anyway’.” Sandwiched between this beginning and end is a most interesting observation. “However, most creativity is not about seeing the future, it’s about accepting its unseeableness and groping ahead anyway. Innovation derives from the willingness to explore, not from hallucinations. Innovation is the call of adventure, the call of the unknown.” If you fancy yourself a leader, read these four paragraphs again before you venture forward through the rest of this article. If these opening words don’t intrigue you, skip the balance of this story because it will be of no value either. Go back to managing. I watch some local businesses and many clients struggle with the future. The problem is not that times are bad but rather that they are good. This creates a comfort zone. In business the COMFORT ZONE IS THE MOST DANGEROUS PLACE OF ALL. Machiavelli summed this up in his classic quote: “There is no more delicate matter to take in hand, nor more dangerous to conduct, nor more doubtful to success then to step up as a leader in the introduction of change. For he who innovates will have for his enemies all those well off under the existing order of things and only lukewarm supporters in those better off under the new.” We’re all aware of a few GREAT VISIONS. These were
winners and that is why we acknowledge them. Had their pursuit been
unsuccessful we wouldn’t know the vision and may not even remember the
source. A little short of 500 years later – May 25, 1960, John F. Kennedy said, “I believe this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to Earth.” These are big, bold, bodacious dreams – maybe at their outset they were actual delusions. These were “dice rolls” I wouldn’t expect the ordinary leader to make. The day these “visionaries” spoke, their ideal exceeded the science of the day. No “sane” person would have given their OK on these projects. I’m sure these Visions were voiced, decisions were made, and projects started in advance of or in spite of a due diligence study. For us ordinary folks, let’s study tomorrow through the lens of mere mortals not intimidate ourselves by benchmarking against legends and two of the world’s greatest achievements. Few business people would ever attempt to mirror a president or a world class explorer. They would / should, however, be quite comfortable staring into the eyes of a retail storeowner and a pizza restaurant operator. Candidly most business leaders I know read Good to Great. They are publicly confident in their leadership skills and the future of their company. They would at first blush be offended by the suggestion that they seek a lesson in leadership and Vision from the two above “common” role models. In private if you talk to these leaders or if you carefully view their organizations from the inside, you see very little “new” happening. Many may even tell you about the difficulty or risk involved in change. But what if, we use Mr. Dauten’s ideas on Innovation – “Let’ do it anyway.” I’m guessing (and I really “DON’T KNOW”) that Sam Walton in his five and dime in Arkansas and Tom Monaghan in his pizza place in Michigan probably did “just do it anyway.” Their result was Wal Mart / Sam’s and Dominos. I bet they said, what if: (Sam Walton) I buy goods in greater volume, pass the savings onto my customers and treat them in a friendly fashion? I bet I can do better than the other guys / gals in this business. (Thomas Monaghan) I delivered pizzas to peoples’ houses or let them pick them up here on the way home from work? I bet they’d like that. My guess is that these guys had these ideas (Visions), struggled with them for a few days or weeks or months, and then pulled the trigger on the concept. Made it concrete. In Dale’s terms they went into the “experimentary” mode. They walked their talk. A few years ago a gubernatorial candidate said, “You can’t learn to swim in the gymnasium. You’ve got to get in the water.” He was right. Dale is right. Leadership is about action. Not foolish impulse but thought through action. The Manes Theory on managing change (creating the new for tomorrow) is simple: 1. A Vision (something different / new) 2. A Commitment to the Vision (this separates leaders from managers) 3. A Plan 4. Implementing / Monitoring / Adjusting the Plan This will work. If the Vision is sound you’ll know it (does it make your heart beat fast or at least make you smile?). Test the idea in your head and your heart. If it is sound, you’ll feel it; than commit to it. If you commit to it you must bring it through a process and to conclusion. This is as Dale says – “I DON’T KNOW BUT I’LL DO IT ANYWAY.” You’re committed so now you must create a plan of action. This process is about “eating the elephant”. You must first cut your Vision into bite size pieces. After the plan is written, the discussions, dialogue, and debate are completed - jump in the water, pull the trigger, charge, take action, JUST DO IT! Go experimentary! My experience indicates that many leaders have an idea or realize that they must do something new. After all the latest business books or the last seminar leader talked about change and the need for innovation. They are leaders – they are at the front end of studying change. They’ll innovate. BUT just to be on the safe side (you know PRUDENT), they’ll conduct a due diligence, have legal look at this and maybe run this by the compliance officer. STOP! THE DEAL IS DEAD! Go back and read the Machiavell quote. Most probably you, your organization, and its stakeholders are in a comfort zone. Change like the weather is something you’ll talk about but don’t / won’t really do anything about. Working a new idea through your process is a sure way for the status quo to wring the life out of an opportunity. Process should be a tool to leverage the opportunities in your business / future. As a practical matter, more often than not, this is actually a weapon used to kill the threats to the status quo – the collective comfort zone.
Due diligence is the process that allows everyone involved to CYA (a military term that means “cover your assets”). If you’re part of the system, here’s where you hedge your bet. Rather than being a pioneer or adventurer and supporting the venture, those involved become the conservators of the status quo. They provide all the reasons why the new idea won’t work. If they don’t support the change and cite the reasons it might fail, they are safe. If it fails, they told you so. If it succeeds, its proof of their exceptional talent, initiative, and effort making this “near impossible Vision” work. Once all the people in the due diligence process have covered their assets, it’s almost certain the deal is dead. Who’d try this with all these risks attached?
I PERSONALLY BELIEVE THAT THE REASON MANY COMPANIES HIRE THE MOST PRESTIGIOUS CONSULTANTING FIRMS TO WORK ON NEW VENTURES IS NOT TO ASSURE THEIR SUCCESS BUT RATHER AS INSURANCE - TO MAKE THE FAILUR SAFE. “It’s not our fault. We did all we could do. As a matter of fact we even had, _______________ Consultants complete our due diligence.” Peter Drucker says, “the only two functions in business
are Marketing and Innovation.” Dale Dauten encourages you to be “experimentary”.
I agree. If they are neither willing nor able – why in the heck did you hire them and keep them on the job? What kind of leader are you? Be honest! I believe everyone must have innovation built into their job description, have the authority to try the new and be held accountable for doing so or not doing so. The system should measure risks before venturing out but it should evaluate these risks with an eye for success / adventure rather than structured to focus on failure. Build systems that reward innovation and facilitate experimentation, action, and refinement. Make your process one of READY, AIM, FIRE then check your target (results), zero in your weapon and begin the process again. Repeat as needed.
©Square One Consulting (September 2001) |