Monday, June 9, 2008

Analogy #183: Bridge Out Ahead

A friend of mine told me the story of a time back when large sections of the interstate highway system were being built. There was a large section of this expressway which appeared to be completed near where my friend lived. Yet, for some reason, the government would not open it up for use.

At first you could assume that perhaps they were waiting for the concrete to dry and cure. Or maybe they were waiting until all the signs were up. However, after a large number of weeks had gone by, you still were not allowed to drive on the new highway. Surely by now the concrete was ready. You could see that all the signs were up.

One man in particular was upset by the delay in opening that expressway. He knew it would make his daily commute both faster and smoother. As each day passed, he became a bit more angry about not being able to use that highway.

Eventually, he could not stand the wait any longer. One night, after dark, he pulled away one of the barricades and drove up the ramp to the new highway. It was wonderful! The road was smooth—no potholes! He could drive as fast as he wanted because there were no other cars on the road.

Just as he was starting to relax, he caught a glimpse of something ahead. The highway was missing a bridge! He immediately slammed on his breaks. Unfortunately, he could not stop in time, and he drove over the edge to his death.

I guess there was a reason for not opening up that highway after all.

Strategic planning is about moving a company from its current location to a superior destination. In that respect, building a strategy is like building a highway—a route one can take to get to that destination.

It may appear that the strategy is in great shape, just like that new highway. Unfortunately, there can be some critical pieces missing, just like that bridge. Unless you make sure that all of your bridges are in place, your strategy can drop off the edge and never return.

The principle here is that not everything moves in a smooth incremental succession. Sometimes, there are gaps that can only be crossed by building an additional strategic bridge.

Bridges tend to take a lot longer to build than the highway on either side of the bridge, because the bridge is a more complicated structure. Therefore, if you don’t start building the bridge until the highway reaches the gap, there will be a very long wait before you can use that highway. A lot of precious time will be lost in the race to the future.

A better approach would be to determine in advance where those large gaps are and start building the bridges right away. Then, by the time your strategic highway gets to that point, you will be ready to connect it to the bridge and not skip a beat.

A good example of this has to do with managing the succession from one CEO to the next. Due to egos and cultures and other such issues, that transition can sometimes be quite difficult. It can be like a bridge, which needs to be worked on far in advance of when it is needed.

At Microsoft, Bill Gates had a great deal of difficulty relinquishing power and control to Steve Balmer. Fortunately, they started the transition well in advance of the time when Bill Gates was to leave the company. And they needed all those years to get the egos and the bugs all worked out (too bad the transition to Vista did not go as smoothly).

The time to start thinking about successors is not the day after the CEO announces his or her retirement. That is as irresponsible as building a highway and forgetting to build the bridges.

Perhaps the next step in succession is not a new CEO but to sell the company to a larger one. The time to start work on the deal is not at the time when you want to sell. This is another one of those bridge concepts which takes extra time. It can sometimes take years to woo a company into cooperation. Because Microsoft ignored this long courtship process in going after Yahoo, the deal had difficulty creating any traction.

If you want to sell out, not only do you need to woo the potential suitor, but you may need to transform your company into something more desirable to them. Perhaps you have overlapping businesses you need to sell in order to gain government approval. Or perhaps you need to migrate your business to a more compatible platform. Or perhaps some key investors need to be persuaded. The more of this you do up front, the less desperate you will be later on to get all the pieces to fit. And let me tell you, if you have to get it all done at the last minute, it will cost you dearly.

Sometimes, bridges have to deal with acquiring scarce resources, be it raw materials, technology or people skills. It can take extra time to get these resources in place, so treat them like a bridge. For example, rather than relying on the open “spot market” to try to gain those resources on a just-in-time basis, you may want to work well in advance to develop the kinds of relationships that will allow you to get long-term contracts that guarantee supply at favorable rates.

If you have to acquire to get the technology you need, start the courtship well in advance.

In a prior blog, we talked about how the time before we hit the gap is usually shorter than we think (see “The room is Smaller than you Think”). It is equally true that the time it takes to build a bridge over that gap is usually longer than we think.

As a result of these two trends, we can hit a stall point, where the bridge is not ready in time. Impatient investors, board members and employees will get as upset as the man in the story and want to plow ahead before the bridge is ready. If you resist, they may replace you. If you do not resist, then you will be the one driving that car off the edge of the highway.

Now there is not enough time or resources to treat everything like a bridge. Fortunately, not every gully needs to be crossed on a deluxe bridge. Sometimes, you can move along quickly by just paving over those little hills and valleys and live with a few little bumps.

The trick is to isolate those key gaps where serious bridge-building is needed and get to work on them with sufficient lead time.

If you want smooth, seamless transitions in your business, then you have to realistically evaluate how long it will take to build those transitions. Then, you need to sequence the timing of your projects so that the projects end in time to be ready when needed. And since those gaps tend to come a little sooner than you think, and the building tends to take a little longer than you think, build in some slack time.

Most movies are not filmed sequentially, from beginning to end. That can be a very inefficient way to make a movie, wasting both time and money. Complicated scenes are started earlier, some scenes are filmed simultaneously on different lots, and scenes using the same resources may be filmed together, even though they do not occur in the movie together.

The same can be said about implementing your strategy. It may be more efficient to tackle the projects “out-of-sequence.” Get to the bridges sooner. Although it may look messy on your side, the customer will only see the smooth, continuous movie.

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