The business world is full of platitudinous one-liners. Indeed an entire publishing industry has been built up around the slightly annoying tendency to take a one line quote and inflate it into an entire 200 page book – with attendant website, speaking gigs and subscription services to boot. Sometimes these lines are of little value but on other occasions they are, indeed, informative.
One such line comes from the much-heralded management thinker Peter Drucker – he’s the one who suggested that “culture eats strategy for breakfast.” That particular quote has never really hit the mark for this correspondent, given his penchant for doing without petit dejeuner. Another Drucker quote that does resonate however is the one that suggests “you can’t manage what you don’t measure.”
Basically Drucker’s point is that in the absence of clear data, the best one can hope for is a coincidence between decisions made and good outcomes.
I’ve been thinking of Drucker’s famous quote recently after reading a couple of things. The first was an opinion piece written by business advisor Kevin Jenkins for the Institute of Directors. The second was Adam Lashinsky’s decade-old book about the inner workings of Apple, Inside Apple.
Jenkins piece was designed to provide some guidance to board members, and the executives who report to them. The basic hypothesis was that boards are drowning in data, but what they actually yearn for are reporting dashboards that aid monitoring and decision-making. All this while still being easy for management to build and maintain – there’s nothing worse than the niggling feeling in the back of a board members’ minds that the dashboard they so casually glance at for a few seconds has taken stressed out employees many hours to produce. Even worse when that dashboard has no purpose beyond its presentation to the board.
So the ultimate conclusion we can get to when cogitating about Drucker’s view is that we should spend lots of time defining the data that matters and exposing it to decision makers in ways that they can understand. In the case of product and service development, this could reasonably be taken to mean user groups, environmental scanning and the like.
All of which is reasonable, but somewhat contrary to what has turned Apple into one of the most valuable companies on the planet. Apple, under the leadership of Steve Jobs, disrupted a number of different industries – computing, obviously, but also music and media more generally. Its products created entirely new paradigms – the idea of an application store, for example. Or the notion of carrying ones’ entire music collection in ones’ pocket.
And here’s where the contrasting view to the “measure everything” narrative comes in. Jobs didn’t get the inspiration for the iPad, iPhone, AppStore or iTunes from his customers. He got it from bringing amazing minds together, focusing those minds on delivering nothing but excellence, and striving for creative destruction. There is a reason that more traditional hierarchical and programmatic organisations such as Nokia and Microsoft (not to mention the movie studios, record companies and publishers) have been left in Apple’s wake.
Jobs was, perhaps, the perfect exemplar for Henry Ford’s well-worn adage that, if he’d asked his customers what they wanted, they’d have requested a faster horse. Old Henry knew better and like Jobs would do 100 years or so later, he had the vision to do what he was convinced the world actually wanted.
There is a lesson in all of this for those of us who are tasked with governing organisations of all types. Too many governors base decisions on empirical proof points. Directors are, after all, responsible to the shareholders for their decisions. It is a brave governor who makes decisions in the absence of empirical data. Many more traditional governors, fearful of the risk that comes from making bold decisions, defer instead to a more pedestrian approach towards their organisations. They steer clear of bold, brave and untested disrections.
But that is what this brave new world needs. When industries of all flavours are being disrupted by emergent players, when the pace of change is faster than ever before, waiting for data points that will justify decisions simply won’t work. Leaders and, most importantly those who determine the strategic direction of organisations, need to be brave and take chances. After all, the risks of not acting are generally worse than the risks of a well-intentioned misstep.
Ben Kepes is a Canterbury-based entrepreneur and professional board member. He’s never shied away from a risky move and has scars to prove it.