Tuesday, July 1, 2008

Analogy #189: Driving for Success

Back when I was in high school, it was a really big deal to learn how to drive an automobile. However, before you could get a driver’s license, you had to take a course in driving (called Driver’s Ed). I really wasn’t sure what to expect from the course, because the father of one of my best friends taught Driver’s Ed, and I knew from personal experience that he was a terrible driver.

In class, they showed us lots of movies of gruesome automobile accidents, to frighten us into driving safely. Then, before we could get out on real roads, they let us practice driving on the school parking lot. We drove around in a large circle. On every lap, we would pass a spot where students stood to wait for their turn to drive. There were some pretty girls waiting there for their turn after me. On each lap, I would roll down the window and offer to give them a ride. I thought it was hilarious; they thought I was a moron.

The school provided us with a list of rules—everything we were supposed to do, from when we first got into a car to drive all the way to what we were to do when we finished driving. They told us that we should repeat this list whenever we drove for the rest of our lives.

Most of the items on that list made a lot of sense to continue doing. There was one item on the list, however, which I never did after leaving Driver’s Ed. They said that after completing your driving, put the car key into the outside lock on the driver’s side door (so that the next student could find the key) and walk away.

The primary purpose of driving is to get from one place to another. This is also a primary goal of strategy. In essence, the role of strategy is to help determine the proper destination for your business, as well as the best means for getting there.

Since driving and strategy have similar goals, perhaps there is something we can learn from Driver’s Ed that can apply to strategy. This blog will look at these applications.

The principle here is that many of the rules which lead to effective driving can also lead to effective strategic planning. The basic rules I learned in Driver’s Ed were based on the “Smith System” of driving. These rules had been developed by Harold Smith and Ford Motor Co. Since I went to Edsel Ford High School, which was across the street from the huge Ford R&D Research Center in Dearborn, Michigan (headquarters city of Ford Motor Co.), it is no surprise that we used something sponsored by Ford. By the way, Ford also donated the cars for the program.

There were five rules to the Smith System of Driving. We will look at each rule and then apply it to strategic planning.

1) Aim High in Steering
The idea here is that the further out in the distance you focus to anchor your steering, the better. Studies have shown that if the driver is barely looking out beyond the front bumper of the car, they are more likely to swerve back and forth through over-steering. Looking further out tends to stabilize the ride.

The same principle is true in strategy. If you never look out more than a month or a quarter into the future, you will feel pulled in all sorts of directions by every little whim in the marketplace. It is only by keeping firmly focused out on the more distant prize that you can get the proper perspective on where to steer.

Not every little blip in the road requires rerouting the company. Most can be ignored. By aiming high in your timeline horizon, you can tell which blips one should truly adjust to. However, if you manage one blip at a time, everything will look like a crisis and you’ll swerve all over the road trying to avoid them, never reaching your ultimate destination. (We talked about this principle in detail in “Every intersection is not a crossroad”)

2) Keep Your Eyes Moving
Drivers should never fixate on only one thing. Although most of the time should be spent looking forward, drivers need to occasionally move their eyes to look in the mirrors and look at the dials and gauges on the dashboard.

The same is true in strategy. Although most of the time should be spent looking forward towards the strategic goal, one needs to glance at other things as well. For example, one needs to look around in the mirrors to see what the competition and the consumer are up to. If you fixate in one direction only, you can miss out on some of these key changes in the external environment—information which requires a response.

In addition, one needs to look at a dashboard of key statistics to make sure that your internal performance is on track. The beauty of dashboards is that they allow you to assess your condition with a quick glance. They do not require you to pull over and stop the car to do extensive investigation under the hood.

It is amazing to me how many companies drive cars without dashboards. They may have reams of data printouts, huge reports, and great data warehouses on their intranet, but nothing they can quickly glance at while driving to the future. Just as you wouldn’t want a driver with their head down reading a complicated data report while speeding down the highway, you don’t want your people drowning in data to the point that they cannot move ahead.

Not all data is equally important. Distill out the most relevant indicators, put them on your dashboard, and glance at them from time to time.

3) Get the Big Picture
Drivers drive better when they adjust their driving to the total environment. Weather conditions can impact the drive. The condition of the pavement can impact the drive. Time of day can impact the drive. Once you know what type of traffic is around you, you can start anticipating how their movements affect your driving experience.

It is easier to drive when you can anticipate in advance what might happen. By putting all of the data into a single big-picture perspective, you can more safely adjust, because you are more prepared.

The same is true in business strategy. The better you understand the big picture, the more likely you will choose the right strategic goal and the right path to reach it. You do not drive in a vacuum. Understanding the context surrounding the strategy creates a better strategic process.

4) Make Sure Others See You
Drivers who are unseen get ignored when decisions are made by others. Being in another car’s blind spot is dangerous, because they could unknowingly swerve right into you. By contrast, the more other drivers on the road are aware of you, the more they will take into account your location in their own driving decisions.

This makes things safer for everyone. Now, not only are you looking out for yourself, but you have others doing so as well. Therefore, it is a good idea to make sure you are as visible as possible.

The same can be true for your organization. What good does it do to have a brilliant strategy if nobody in the company knows what it is? Employees cannot execute to achieve a goal that they are unaware of. Make sure the employees see the strategic goals and tactics on a regular basis. Otherwise, they will make decisions that could run over and crush the strategy.

Similarly, what good does it do to develop a great positioning in the marketplace if the consumers in the marketplace are unaware of it? An unknown position is like having no position at all.

Never assume that everyone knows where you are, strategically. Keep reminding employees and consumers, so that they can react properly to it. (We talked about this in more detail in “Psst. It’s a Secret.")

5) Leave Yourself An Out
It is dangerous for drivers to get into a situation where there is no escape if things go bad. Getting boxed in by a group a trucks is undesirable. The same thing is true in strategy. Even the best-laid plans can run into problems. However, the more you can anticipate in advance a way out of these binds, the more you can avoid the pain which comes with problems.

In strategy, we call this contingency planning. Think in advance of what could go wrong so that you can develop a way to avoid it. Typically, a rational contingency plan created during an earlier calm will be more effective than a plan quickly put-together in the heat of the crisis, when emotions are high.

Race cars carry fire extinguishers during the entire race, so that they are prepared for whenever a crisis could occur. They do not wait until after the crash to try to run an extinguisher out to the car. Your contingency planning should work the same way—ready in advance.

Strategic Planning for a business is like driving a car. Therefore, the five driving rules of the Smith System equally apply to strategic planning. First, Aim High in Steering (keep a long-term perspective). Second, Keep Your Eyes Moving (periodically check out the external environment and internal performance indicators). Third, Get the Big Picture (put everything into context). Fourth, Make Sure Others See You (don’t keep your strategy a secret). Finally, Leave Yourself an Out (through contingency planning).

Before you can legally drive, you have to get a driver’s license. I could not get a driver’s license until I passed both a written and driving test with the local police department. Alas, not all “drivers” in business could pass a strategy test, yet they are still allowed to be out there. Beware!

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