Product #55

Product #55


The Art of Action · Stephen Bungay · 2010

The author argues that for millennia, the world's military powers have refined how to turn strategy into action - and we'd be foolish to ignore what they've learned. The book translates these military strategy lessons to business strategy, and product managers reading it will need to make one more small leap to Product Strategy... but the principles easily transfer over.

Key Highlights

The path to success is often obscured by the fog of uncertainty, making it difficult for leaders to navigate the complex interplay between plans, actions, and outcomes.

The Pitfalls of Autonomy and Centralisation Both highly autonomous and highly centralised models can lead to failure. When different parts of the organization optimise for different things, the results often clash. Faced with uncertainty, people tend to search for more information, and when confronted with complexity, they engage in more analysis. Meetings proliferate, decisions are delayed, and answering the simple question "What do you want me to do?" becomes a problem.

The Illusion of Linearity In a stable, predictable environment, gathering and analysing information, making plans, taking actions, and achieving outcomes in a linear sequence might work. However, in an unpredictable environment, this approach falls short due to three critical gaps:

  1. Knowledge Gap: The difference between what we want to know and what we actually know.
  2. Alignment Gap: The difference between what we want people to do and what they actually do.
  3. Effect Gap: The difference between what we hope our actions will achieve and what they actually achieve.

Principles of Execution: To overcome these gaps and execute effectively, organizations should follow these principles:

  1. Decide what really matters: Instead of attempting to create perfect plans, focus on the outcomes you want to achieve. Formulate your strategy as an intent rather than a detailed plan.
  2. Get the message across: Communicate what matters most to others and give them responsibility for carrying out their part. Keep it simple and clear, emphasising the desired outcomes and the reasons behind them.
  3. Give people space and support: Encourage adaptability and empower people to make decisions within broad boundaries. Don't try to predict the effects of every action; instead, trust your team to adjust their actions to realise the overall intention.

Understanding Friction Friction is the accumulation of innumerable petty circumstances that can never be fully accounted for on paper. It encompasses the uncertainties, errors, accidents, technical difficulties, and unforeseen events that affect decisions, morale, and actions. Friction is a universal concept in business and war, and it is essential to recognise its existence and understand its nature when developing strategies.

Addressing the Three Gaps Our instinctive reaction to the knowledge, alignment, and effects gaps is to demand more detail. However, this often exacerbates the problem. Instead, organisations should adopt a systemic approach:

  1. Knowledge Gap: Limit direction to defining and expressing the essential intent.
  2. Alignment Gap: Allow each level to define what it will achieve to realise the intent.
  3. Effects Gap: Give individuals the freedom to adjust their actions in line with the intent.

By following this approach, organisations can make strategy and execution a seamless process of learning and adapting.

The Power of Intent A strategy is an intent – a decision to achieve something now in order to realise an outcome. It should be formulated as a statement that distills the overall direction and can be broken down into component parts for briefing each level of the organisation. A well-crafted briefing should cover the higher intent, specific tasks, main effort, freedoms, and constraints.

Aligning Structure with Strategy Every organisational structure makes certain things easy and others difficult. If there is a conflict between structure and strategy, the structure will win. Therefore, it is crucial to ensure that the organisational structure reflects the task structure implied by the strategy. Leaders should ask themselves three key questions:

  1. Can you identify a part of the organisation that can be made accountable for executing the key elements of the strategy?
  2. Are the leaders of these units skilled, experienced, and committed to the strategy?
  3. Is there an appropriate level of hierarchy, and does each level have the necessary decision rights?

Building Trust and Alignment Delegating authority for decision-making means giving away power without relinquishing accountability. Trust is essential for this approach to work, and leaders must create controlled situations to test the level of trust they can place in their people. Trust has two dimensions: motives and morality, and practical competence.

Even when people understand the intent, they may not always behave in the best interests of the organisation. To address this, examine the goals, resources, and constraints of the subsystem, understand the reasons behind the behaviour, and change the subsystem to produce the desired outcomes.

The Management Trinity Effective management comprises three interconnected elements:

  1. Directing (Intellectual): The authority, responsibility, and duty of direction. Ensure that everyone understands what they have to do and why.
  2. Managing (Physical): Organising and controlling resources to achieve objectives. Ensure that everyone has the skills and resources to carry out their tasks.
  3. Leading (Moral and Motivational): Getting people to achieve objectives. Ensure that everyone is committed to doing their part and making it a success.

Conclusion: Navigating the complexities of strategy and execution in uncertain environments requires a shift in mindset and approach. By focusing on intent, empowering people, and fostering trust and alignment, organisations can overcome the challenges posed by the knowledge, alignment, and effects gaps. Embracing the principles of effective execution, understanding the impact of friction, and aligning structure with strategy are also key.

Full Book Summary · Amazon

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Behavioural Modelling for Churn Prediction Khan, Manoj, Singh, Blumenstock · 2015

In this paper, we present a unified analytic framework for detecting the early warning signs of churn, and assigning a “Churn Score” to each customer that indicates the likelihood that the particular individual will churn within a predefined amount of time. This framework employs a brute force approach to feature engineering, then winnows the set of relevant attributes via feature selection, before feeding the final feature-set into a suite of supervised learning algorithms.

Using several terabytes of data from a large mobile phone network, our method identifies several intuitive - and a few surprising - early warning signs of churn, and our best model predicts whether a subscriber will churn with 89.4% accuracy.

This paper introduces an analytical framework for detecting early warning signs of churn. Identifying customers who are likely to stop using your product or service will help you devise effective strategies to improve customer retention and the customer experience.

View the Paper


Book Highlights

Certain changes to the inputs shouldn’t lead to changes in the output. In the preceding case, changes to race information shouldn’t affect the mortgage outcome. Similarly, changes to applicants’ names shouldn’t affect their resume screening results nor should someone’s gender affect how much they should be paid. If these happen, there are biases in your model, which might render it unusable no matter how good its performance is. Chip Huyen · Designing Machine Learning Systems
One of the greatest fears of senior people is of letting go and thereby losing direct control. In delegating authority for decision making one gives away power without giving away accountability. A lot of people who do not suffer from the pathology of authoritarians find that a scary thing to do. It implies trusting your people. Stephen Bungay · The Art of Action
Nothing says “interested” like engaging with a product. So the more PQLs (Product Qualified Lead) generated, the more consultative conversations a sales team can have. Ramil John and Wes Bush · Product-Led Onboarding
Polite Software Is Perceptive The concierge at a hotel I frequent in New York noticed my interest in Broadway shows. Now, whenever I visit, the concierge—without my asking—puts a handy listing of the current Broadway shows in my room. She was perceptive enough to notice my interest, and this allows her to anticipate my desires and provide me with information I want before I even think about it. Alan Cooper · The Inmates Are Running the Asylum

Tweets and Quotes

Make the work with great care and precision, but do not ever let it become too precious. Stephen Tomasko
High Agency is finding a way to get what you want, without waiting for conditions to be perfect or blaming circumstances. Shreyas Doshi