Improving things is easier than choosing a direction, which is why we reach for it so readily

Operational excellence is by definition unattainable, and that is not a play on words but the starting premise of the whole conversation. If we will never reach it, the point is not getting there but balancing operational order against growth. In fast-growing companies a bit of creative chaos is actually needed. The practical consequence is simple: we improve what really gets in the way, and if there is no problem, there is nothing to touch. It sounds trite until we ask why companies do the opposite. Because improving is easier. Problems are always at hand, so you can always deal with them instead of thinking about direction, and the time spent tidying up processes is time we don't spend on strategy. What is more, the escape looks like solid work, and that is why it is so hard to name.

The second false trail is setting up strategy and the day-to-day as alternatives you have to choose between. The question is not which to choose. It is whether what we do every day delivers the strategy. If it doesn't, then either the strategy is off target or it hasn't been understood, and the two answers lead to completely different places. Linked to this is a mechanism that comes back several times in the episode: as a company grows, the board's direct communicative influence on the whole organisation drops sharply, so middle management becomes the carrier of the strategy. The board's job stops being talking and becomes making sure that managers understand the strategy and can take that message to their people. The precondition is culture, because a strategy can't be communicated well in a company that, as a rule, communicates little. The second condition is credibility: if the board doesn't take the strategy seriously, there are no grounds to expect that from managers, because people watch what we do, not what we say. A good opening exercise is a responsibility sheet for functions and processes with names on it, after which someone sees their name in ten boxes, and very often it turns out that the CEO is responsible for 80 per cent of the processes and functions.

There is one more claim in this episode that overturns a popular diagnosis. Companies don't measure too little, they measure too much, and that is exactly why they can't turn data into information on which decisions are made. They measure because everyone says you have to measure. The remedy is not another indicator but a review: which metrics are unnecessary, which are missing and how we will know at all that a given thing has worked. From that you then build a tree in which the main metric breaks down into partial ones, each with an owner, instead of throwing everything onto one board dashboard. There is also a habit we know from our own work: we look at the metrics when things are bad, and when things are good we prefer not to understand why, although it is exactly the same lack of understanding of the mechanism, just without the pain. Finally, the most down-to-earth point of the whole conversation. You don't find time for strategic work, you carve it out firmly in the calendar and don't let go of it for several weeks in a row, for example on Fridays from ten in the morning to two in the afternoon. In the episode there is an admission that before that block was fixed in place, the date slipped twice, and that is probably the most honest sentence in the whole recording.