Know What Matters Part 2 – Ron Shaich

39. Innovation Process For Doing What Matters.

1. Discover what matters : Determine what job you need to complete for whom.

  1. Observe. Tune into the everyday human behaviors that signal people’s frustrations, unfufilled needs, and desires, thererby revealing a promising opportunity to innovate. Use focus groups and studies of competitors, as well as other industries, business models, and broader cultural trends.
  2. Look for patterns and draw generalizations. Gather data from raw observation, look for patterns and generalize from one industry to another.
  3. Brainstorm. Explore meaning of patterns you are noticing. Compare notes, wrestle what you have seen. Generate hypotheses on what will matter to people in the future.
  4. Research. Confirm hypotheses through formal research and by looking to other industries for models. Research is the final part of the observation process, not the starting point. It serves only to confirm what you’ve seen directly. Research can only tell you what people did yesterday. The world doesnt pay you to read yesterday’s research but pays you to figure out what will matter tomorrow and how to be the first one to get there.

2. Bring what matters to life : Capture your vision in one, two and three dimensions.

  1. Identify success factors. A one dimensional sketch, a single page in which you clarify and ultimately commit to deliverables that will be required to take advantage of the opportunity you observed.
  2. Rendering. Develop two dimensional vision of the solution for the future you see. You can see it, describe and discuss it but you havent built it. Continue to play with it, challenge it and stay open. Keeping discussing until you are 80% solid.
  3. Lab test. Rendering is so vivid – you can see, taste, touch, hear and smell it, time for three dimensions and lab test the various parts or subsystems of the solution, internally, before it faces customers.
  4. Prototype. Truly test the full, three dimensional, operational reality of your vision, to learn, experience how it works with guests and operators.

3. Get what matters done : Roll out your innovation

  1. Planning. Determine what to roll out first, second , third and so on ( what the world can absorb when ) for the Minimally Viable Product ( MVP ).
  2. Versioning. Build confidence, confirm impact, and define rollout needs through larger and larger test markets .
  3. Execution. Determine who coordinates and how the full-system rollout will occur.

40. Make Smart Bets. Leaders must have the ability to wisely stake their limited capital, resources and reputation on those things that gives them competitive advantage. Those who win aren’t just the lucky ones, they are the ones who make better choices. To maintain their credibility, they need to make smart bets. A smart bet is not a gamble and its a situation where through your own skill and commitment to observe and deduction, you have more information about what’s going to matter in the future than other players. Skills of observation, generalization and prediction. Successfully making smart bets requires an appreciation that things of value takes time. It takes courage to invest in one, but it’s not a reckless courage. Doubters are right about the challenges but Doubters are wrong about the impact. Making smart bets is a critical skill in business and life ( esp Gambler at heart). I did my research, observe and figure out something you didnt know. I discovered today what was going to matter tomorrow.

41. Define Your Decision – Making Lens. 1. What matters most to the organization and its stakeholders? Competitive advantage – its the end, everything else is the means. Good decisions = those that lead to greater competitive advantage. Guest experience, value, quality. Your competitive advantage should reflect the concept’s points of differentiation and core personality, placed in a distinct order of importance. The order of filters is driven by a clear understanding of who you are, as a brand, as a business. Power of decision making lens. You avoid reverting to the lowest common denominator. The point is to make the right decisions for your company, so we stay aligned with what matters.

42. Seek Out The Tough Stuff and Create Barrier to Entry. What is the cornerstone of our authority? When it comes to making smart bets that create a competitive advantage, what matters is what’s difficult. I want to do the tough stuff – I Seek out what’s difficult. Because if it’s easy, its not worth doing. If there is no barrier to entry, there’s no sustainable business model.

What can your customer seek and your competitors can’t deliver? In a world of abundance, what can you do that is scarce? What can you be that is special and unique? What do certain customers want that has greater authority and ultimately creates a true differentiation fro your enterprise? What tough enough that it’s worth doing right? That’s your competitive advantage. It is a target that you must continue to clearly define and move toward with great intensity, intentionality and focus if you hope to attain it.

Competitive advantage is transient.

Ron’s Rules for Gaining and Maintaining Competitive Advantage

  1. Recognize that you cant please all the people all the time. Understand your who your target customer is and what job they are hiring you to do. Develop a concept that’s the singular best choice for some target customers on some days rather than the second best choice for everyone, everyday.
  2. Define what competitive authority means within your understanding of your concept and know how to build it.
  3. Make sure the niche you focus on is big enough to sustain you. Dont become an R&D lab for larger competitors.
  4. Search for the good ideas that really matter. ( otherwise you could expend a lot of energy with a modest return.)
  5. Build barriers to entry.
  6. Get it done. If you cant actually deliver on your promises, you’ll lose customers to competitors who can.
  7. Accept that maintaining competitive advantage is really difficult.
  8. Be willing to do it all over again.

No shortcuts – cultural values. By avoiding the easy road and valuing things that were diffcult, we believed we’ve continue to set ourselves apart.

43. Know When to Fold’ Em

As Innovator in chief, i never stopped paying attention to food trends. Credibility is everything for a leader. It’s the currency of the realm for leading people, bringing in investors and supporters. Failure erodes trust. And trust is what makes everything possible in business.

Marketing requires the soul of a merchant.

Ron’s Rules For Marketing

  1. Know what marketing can and cannot do. Brand authority and personality ( accounts 60% ) . Brand credibility ( 30%) and Traditional marketing tools : price, promotion and advertising (10% ).
  2. Imprint your brand in minds of customers. Marketing can build long term brand credibility. Marketing campaign should amplify the reality of the concept and brand’s long term point of differentiation.
  3. Focus on marketing on the long term. Build long term authority and credibility for long term payout and higher ROI.
  4. Mix up the way you drive sales.

44. If you don’t have control, credibility is your currency.

45. The Doing of the Doing.

Did you get what matters done? Did you put in place the processes and structures to ensure what matters get done.

What your organization focuses on and how it uses the Three Ts – Time, Talent and Treasury. CEO must design processes to ensure that your spend your time , talent and treasury on what your team agrees is most important for attaining and sustaining long term competitive advantage. A good focused executional system gives you traction.

Getting the right people in the room at the right time. Focus on the right stuff. Measure your progress on the journey. System is set up to ensure you have a closed loop process with clear ownership and clear deliverables.

Execution is the missing link between aspirations and results, Larry Bossidy and Ram Charan ‘s book Execution.

46. Business Would Be Easier without People. People are who they are , so your best bet as a leader os to meet them where they are, figure out what makes them tick and create systems that let people see that it is in their interest to help fulfill the organization’s goals. One of my greatest regrets or failings as a leader is that i should have fired more people faster. You can fire someone and still respect each other.

The good of many is more important than the interests of one person.

Ron’s Rules for People Management

  1. Don’t disagree on what matters. It’s not okay for team members to disagree on vision, mission , or values.
  2. It’s not a leader’s responsibility to ensure that a person succeeds. A leader’s responsibility is to set expectations, provide opportunities for individuals to step up and perform, should they choose to do so.
  3. The good of the many is more important that the good of the individual.
  4. Pay favourites. Take care of the people who help you get done what matters.
  5. Know who can do what. The people who know what is wrong often cant fix a problem . The people who can fix the problem often don’t know what’s wrong. Smart management is about listening to people who know what’s wrong and empowering those who can fix it.
  6. Ensure people stay on their lanes and get their jobs done. A culture of blaming other individuals or functions accomplishes nothing.
  7. Ask yourself : If people are key to your success, are you willing to pay them right?
  8. Be honest, even if it leads to a team member’s departure.
  9. Beware of bureaucracy. Run a large company that operates like a small company.

47. Parish Priest in a Business Suit.

The Last Lecture , by Randy Pausch , professor of computer science, Carneige Mellon University.

How we cannot change the cards we are dealt, only the wat we play them. He chose to play the, through living a positive, fun filled life, rather than losing himself in complaints and victimhood.

I have always considered meaning-making a part of my life. People are always looking for a sense of meaning., in their life, and their work. Meaning is what motivates us – the sense of we’re part of a bigger story, part of something that matters. Meaning occurs when we understand where we came from, where we are, where we want to go and “why” of the journey. And the leader’s job is to share that story again and again, like a priest who show up every Sunday to offer perspective and context. I want every team member , no matter where they sit in the company hierarchy, to know that they will participate in a regular series of meetings designed to connect them to the broader journey of the company, help them to learn the game of the business, help them to deal with whatever pain or uncertainty they may be experiencing along the way. Much like a rabbi helps people avoid succumbing to momentary desires or fears to focus on living good and meaningful life, business leaders must be ready to help their people avoid overreacting to short term pressures or successes and to focus on the organization’s long terms health and impact. As leaders, we cant take for granted everyone is feeling connected to the meaning in what they’re doing.

As company grows. one of the CEO’s role is to create meaning, provide context and perspective for the organization. Using opportunities in Thanksgiving, times of national significance to create sense of pride in who we are, what we did and to foster unity in the face of competition. Remind people of our goals and values we shared. Connect stakeholders to the same narrative of meaning and purpose that the organization represented.

Storyline – Here’s where we’ve come from, Here’s where are are today, and Here’s where we could be tomorrow – if we get a few important things right. If- a moment to let audience feel the consequentiality of their own actions, the weight of their choices. We have this possibility in our hands message and its up to each of us to bring it into being.

48. Be Contrarian: Conserve in a Boom, Build in a Bust.

I try to live in the future where everyone else is fixated on the present moment. I’m not focusing on what is happening today, but trying to discover what will matter tomorrow.

49. Business is Personal.

Over the holiday season, i take time to reflect on the narrative of my life; where i come from, where i am , and where i want to be in the future – relative to relationships, family, health and body, work and finances and spirituality. Then i practice my future back method, map out the Key Initiatives that will take me to the future i want. I walk myself through the choices, the trade-offs and reaffirm my commitment to getting done the things i believe will most matters to creating the tomorrow i desire.

I founded a company that my then 10 year old son desperately want to be a part of. I’ve never set out to build a business for its own sake, i had set out to live a life i could respect. To seize opportunities and develop solutions that meet the needs of real people. To bring value into the world. And to spend my time on things that really matter to me, to people i care about and to the larger society.

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