By Simon Newman
Our second guest columnist this week is Simon Newman, an Innovator, Strategist and Transformation Executive and CEO of CMG Innovation. He works with Fortune 2000 companies and Family-Owned businesses to improve performance or to prepare them for a change of control transaction.
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In the mid-2000’s, the most watched show on Earth was the medical drama “House”. The show centered around Dr. Gregory House, an acerbic, antisocial, maverick doctor who developed a knack for solving puzzling life-and-death cases. He was like the Sherlock Homes of medicine. His unique approach to cracking cases may provide some insight into how we can transform under-performing businesses.
At some point, every company hits a wall. Growth slows. New technologies emerge. Customers leave. The business under-performs. Management try a lot of things, but nothing seems to pull the company out it is malaise. Hitting the wall is the equivalent of getting an illness for which there is no obvious cause or cure.
When companies falter, the knee jerk reaction of most boards is to hire an industry expert. Struggling retailers hire a different retail CEO. Floundering schools hire a different school administrator. It is hard to fault the prima facia logic of such moves, and no-one will be blamed for hiring someone who seems right on paper.
Finding solutions to complex business problems is like solving a vexing medical case. The patient, in this case a company, is complex. Problems tend to be multi-faceted. To understand complex things, our brain uses a form of shorthand called heuristics which are like rules of thumb or conventional wisdoms. An expert’s knowledge is often made up of numerous heuristic shortcuts learned over years of experience. Most of the time, these short cuts help speed up decision making, but when companies struggle, and conventional solutions don’t work it is this form of thinking that can cloud what is really happening. Industry experts can be culturally myopic.
So what made House so successful? The show was based on real world cases that flummoxed exerts at the time. What did House do differently? Three attributes stand out.
House was a Generalist. On paper he specialized in infectious diseases and nephrology (Kidneys), but these two areas require a deep understanding of the physiology and biochemistry of the entire body. He had to know a lot about a lot of other disciplines. This broad knowledge allowed him to look at problems holistically and see patterns and connections that were often invisible to the more specialist expert doctors.
Extensively used experts. House led the diagnoses, but he also relied heavily on experts and surrounded himself with them: oncologists, neurologists, immunologists, internists, even a plastic surgeon. He demanded their input, but pushed them to think beyond conventional approaches, most of which had been tried already.
Fact based Cures. He disdained heuristic thinking and was entirely fact based. By pursuing facts and testing hypothesis, House often came to conclusions that frequently contradicted conventional thinking. From these conclusions he would develop sometimes radical, out of the box treatments to save his patients.
To effectively transform an under-performing business requires the equivalent of Dr. House. You need a skilled generalist to lead the charge. They need both a deep understanding of strategy (10+ years doing strategy work) and operations (10 + years running something). They need to be supported by specialists with knowledge of the industry or specific technical skills like digital marketing. Finally, your leader needs to be an entrepreneur and not be afraid of radical out of the box thinking. The solutions that work are often ones that industry experts alone would be too cultural myopic to think of themselves.
Got any House-like candidates on your short list?