Strength can come from smartly exploiting weakness

The most common and natural way to deal with weakness seems to trying to strengthen the weakness. But did you ever consider smartly exploiting the weakness as a direction to deal with the weakness?

Switchboard Profit Model

For the second time this month I discussed with someone a very interesting business model: the Switchboard Profit model. The Switchboard Profit model is an exciting model for evaluating and developing business models.

Adrian-Slywotzky's Art of Profitability is a business noval set in a very simple plot: a teacher (David Zhao) with many years of practical experience and a willing student (Steve Gardner) who is committed to move his organization forward.

The book covers 23 profit models in a way that hits the little gray cells. By no means what is written is sufficient in itself, but I found by rereading some chapters I filled in more details than actually are there.

Another interesting and sometimes bothering thing is, is that a lot of the homework assignments for Steve are to read other books.

Back to the Switchboard Profit model.

Switchboard Profit identifies the components that led to the business success of the Hollywood agent Michael Ovitz who took the bundling-of-talent concept that he so successfully perfected in television, and applied it to film-making, but with a difference, because it was much more difficult to create a concentration of power in an industry fragmented by many movie studios. Ovitz' first step was to assemble talent; the second, to find a source of stories through a great literary agent; and third, the creation of critical mass. In the author's words, "The more critical mass you build, the higher your probability of putting together a package that works. That, in turn, means that a star, a writer, or a director will be better off being represented by you rather than any other agent, because the odds of being part of a winning combination are so much higher. …So now the studios have to deal with you, and the stars want to deal with you." Thus the analogy of the old-fashioned switchboard Ovitz became that all his various contacts needed to plug into. The lesson, of course, isn't that simple. Predictably, much work is needed to arrive at the numbers constituting the critical mass that is required to generate revenues seven to ten times greater than in the traditional model for that industry.

With this in mind I discussed a business model for a professional-association and a university. The interesting part is that with a model like the Switchboard Profit model one can quickly translate it to the specific situation and drive down into the particular crucial nifty gritty details. And the Switchboard Profit model is just one of the models that can be used to evaluate and develop profound sounding business models.

Of course the real interesting and challenging part is what is coined in the book as the drudgery part of innovation. Where people need the most pressure and encouragement: turning a new idea into people working processes, procedures, etc to deliver the real products; from marketing to sales, from purchasing to manufacturing and delivery. However interesting, it is outside the scope of the Art of Profitability.

Finding the cause for the majority of the issues

Wouldn't it be wonderful by following some simple steps it is possible to find the root of what is causing the majority of the issues?

One has to remember, often, if not the root, the solution lies outside the periphery we tend to look for solutions. Therefore out-of-the-box thinking is required to address the root of the majority of the issues.

The Cloud is a tool that finds its origin in ToC (Theory of Constraints). It is excellent for finding root causes of the majority of the issues.

Basically it is a very compact description of a dilemma. When examining several dilemmas it is usually possible to extract a few, or even one, generic dilemma: a description of a reoccuring dilemma. There are many uses for this: explanation of what happens in the past and now, prediction for the future ...and a good guide to effectively deal with the reoccuring dilemma.

There are several techiques and instructions around to construct a cloud and a generic cloud. Here I present the technique I developed over the years. The technique is very reliable and others are quite successful in using it as well. Best of all, same input usually generates very similar conclusion ...this can't be said of some other techniques.

The following is a real case where I'm the coach of a programme manager who feels he needs to improve himself. You might recognise yourself or a generic issue. Fine, but the scope of this blog is the specific case for this programme manager. For home work I asked him to following:

• List all the interventions you took or wanted to take in the past 3-6 months
• For each intervention:
• List why it was / would be good to take that intervention
• List why it was / would be good NOT to take that intervention
• What goal did you aim for that required both above

Intervention = interfering in some course of events

We practised together two:

Intervention	Why good to	Why good not to	Goal/Aim
Call resource manager	- personal contact - keep a project member	- maintain relation - steering committe takes their role	maintain relationship
Escalate to senior supplier	- project member will return - senior supplier takes his role	- maintain relation - respect the decision	to force a solution

Two interventions are not enough, but after little more than one week I got a list with 15 interventions. This is more like it, following some rules it structured the data in such a way that all what was required to see if there was a commonality between one or more dilemmas.

In this case there was, to be precisely everything seem to fit into one generic dilemma:

Two question had to be answered:

• 
  
  Do you ever let something go wrong?
  Answer: seldom
• 
  
  Does the formulated objective (green box) match what you feel is what you are trying to achieve and seems so hard to achieve?
  Answer: yes

Then we discussed the validity of the generic description of his core dilemma. It matched.

So how to read the cloud:

• 
  
  You demand people (steering committe members, resource managers, etc) to live up to their roles and responsibilities in order to improve the probability for succes in your project.
• 
  
  However, you feel you should not demand people to live up to their roles and responsibilities because you must respect their positions and this makes you look powerful.
• 
  
  If you demand people to live up to their roles / responsibilities, you do not respect them (you know better and act like a boss rather than a subordinate or equal) and you look weak because you can't manage.
• 
  
  On the other hand, if you do not demand people to live up to their roles and responsibilities it is very hard or impossible to improve the success of your project
• 
  
  And, you need both to improve the probability for success of your project and to respect people's positition and to look strong in order to fulfill your objective: make steps forward in the project and that people associate you with delivering good results.

We explored his generic dilemma using his home work and other situations. It was a very good respresentation for his situation.

The theory of the cloud says: as long as you are captured in the dilemma, you will not achieve your objectives. You might do a bit of both, make some trade-offs, you will never achieve what you want because you need BOTH necessary conditions. Any solution MUST positively contribute to both necessary conditions (the blue boxes) at the same time.

With this we have the focus, we have very clear criteria for any solution or idea to improve his situation.

He is going to talk to some senior programme managers he knew who are quite successful and try to learn how they deal with the dilemma. What do they do to ensure that stakeholders take-up their responsibility and that respect is paid to the position of the stakeholders? He knows how to value any suggestion or proposed idea.

So, with a couple of simple questions and following some rules to construct the generic cloud, the dilemma that caused so many issues latetly for this programme manager became very explicit. And, at the same time we have focused his attention on the characteristics the solution must have in order to work for him. This is very helpful to think-out-of-the-box.