“Alice never could quite make out, in thinking it over afterwards, how it was that they began: all she remembers is, that they were running hand in hand, and the Queen went so fast that it was all she could do to keep up with her: and still the Queen kept crying ‘Faster! Faster!’ but Alice felt she could not go faster, though she had not breath left to say so.
The most curious part of the thing was, that the trees and the other things round them never changed their places at all: however fast they went, they never seemed to pass anything. ‘I wonder if all the things move along with us?’ thought poor puzzled Alice. And the Queen seemed to guess her thoughts, for she cried, ‘Faster! Don’t try to talk!’
Finally, the Red Queen stops, props Alice against a tree, and tells her to rest.
“Alice looked round her in great surprise. ‘Why, I do believe we’ve been under this tree the whole time! Everything’s just as it was!’
‘Of course it is,’ said the Queen, ‘what would you have it?’
‘Well, in our country,’ said Alice, still panting a little, ‘you’d generally get to somewhere else — if you ran very fast for a long time, as we’ve been doing.’
‘A slow sort of country!’ said the Queen. ‘Now, here, you see, it takes all the running you can do, to keep in the same place.
‘If you want to get somewhere else, you must run at least twice as fast as that!’”
In Lewis Carroll’s Through the Looking Glass, Alice finds herself running with the Red Queen, yet despite running as fast as she can, they never seem to gain any ground. This practice, known as the Red Queen Effect, often serves as a reminder of our constant need to evolve and ward off complacency. Yet every time I read it, it reminds me of our never-ending pursuit of productivity.
As we focus on getting more and more done every day, how often do we end up like Alice, running faster and faster only to stay in the same place?
While many of our productivity gains have led to dramatic results in output, they don’t often translate into career success. Yes, we are accomplishing more. But if this doesn’t lead to overall success, is producing more for the sake of more really worth it?
How many people do great work, yet continue to fall short of their career aspirations? How many employees are told to “just keep doing what they’re doing,” yet never seem to get that coveted promotion?
Productivity is necessary. If we expect to achieve superior performance, we need to efficiently produce results. There’s no way around that.
But it’s also not sufficient. It doesn’t guarantee success. Because productivity alone is rarely enough to sustain a long-term competitive advantage.
This problem isn’t limited to individual careers – many businesses experience the same struggle. Fortunately, there’s a common solution to both. It comes down to recognizing the difference between operational effectiveness and strategy.
Operational Effectiveness is Not Sufficient
“Competition based on operational effectiveness alone is mutually destructive, leading to wars of attrition that can be arrested only by limiting competition.” – Michael Porter, What is Strategy?
If you ask most managers about what they’re doing to stay ahead of the competition, they’ll likely point to operational improvements. In our relentless pursuit of speed and efficiency, we’ve developed all sorts of tools to help in this endeavor: total quality management, lean processing, Kaizen and six sigma reviews, reengineering, total quality management, etc. And while many companies have gained dramatic improvements from these actions, many of those same companies still struggle to turn those improvements into sustainable profits.
Because operational effectiveness, just like productivity, is not sufficient to maintain a competitive advantage.
Companies, and individuals, are only able to outperform their competitors when they establish a difference that they can preserve. If the only difference available to you is an ability to streamline waste, the rapid diffusion of industry best practices makes it difficult to maintain this advantage for long. It’s become much easier to imitate improvements and productivity techniques. And as more work is outsourced and globalized, it becomes much more difficult to limit the widespread diffusion of best practices.
Productivity hacks, time management practices, and management techniques are easily transferable across individuals – hence their draw and popularity. But as these best practices become more widespread, they cease to provide any competitive advantage. As Seth Godin told Tim Ferriss, “We can’t out-obedience the competition.”
More importantly, a sole focus on operational effectiveness leads to a race to the bottom. As one company increase its productivity, it raises the bar for everyone else – whether through decreased prices, improved cycle times, or other selling points. As companies continue to one-up each other in a bid to grab more market share, it leads everyone down a race that no one can win.
It’s easy to see the parallel from an individual standpoint as people shift more and more of their lives into work. As everyone becomes more efficient, the easy way to further increase your output is by simply logging more hours. But where does this lead? If the person in the next office is willing to work 60 hours each week, do you then need to work 65? And then how does your neighbor respond to you raising the bar?
Productivity improvements are appealing. They’re often established and actionable. And as pressures increase to deliver more with less, they’ve been invaluable tools in driving measurable improvements. Yet a sole focus on these areas quickly becomes mutually destructive. When this is our only path to success, it creates a zero-sum game with a constantly raising bar – one that can only be gained and held temporarily.
The alternative is not to abandon our focus on productivity. But to supplement it with strategy.
Strategy Provides Integration.
“Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.” – Michael Porter, What is Strategy?
If operational effectiveness focuses on performing similar activities better than our competitors, strategy focuses on performing different activities or performing them in different ways.
Southwest Airlines, led by Herb Kelleher, has a clear strategy of providing a low-cost, convenient, customer-focused service. And they tailor all of their activities to support this strategy. Rather than try to fly to every destination, they deliberately chose midsize cities and secondary airports. With fast turnarounds at the gate, they’re able to get more flight time than rivals. Instead of increasing prices for meals, they decided to serve none. And with a standard fleet of 737s, they were able to increase maintenance efficiency.
These decisions weren’t made by default, but by design. Every choice was in support of a deliberate strategy towards being the low-cost airline provider. And as a result, full-service airlines can’t compete on cost or convenience on routes served by Southwest.
It’s worth noting that Southwest does embrace operational effectiveness. They couldn’t succeed without efficiently turning around planes and keeping their fleet operational. But this productivity focus only exists as an extension of their overall strategy.
A strategy, then, aligns all of a company’s activities under one unique and valuable position. As Michael Porter described it, “while operational effectiveness is about achieving excellence in individual activities, or functions, strategy is about combining activities.” Jay Abraham refers to this as a unique selling proposition (USP), defining it in as “that distinct, appealing idea that sets your business apart from every other ‘me too’ competitor.”
Most managers, when asked about their strategy, will offer an operating plan. But an operating plan is simply a to-do list that may or may not further your strategic position. A strategy, in contrast, is a framework for decision-making. It offers a set of guiding principles that can be applied to evolving situations. And most importantly, it aligns all of your activities to reinforce and add depth to your strategic position. As Jay Abraham wrote about his USP in Getting Everything You Can Out of All You’ve Got,
“You don’t just want to say it, you want to completely demonstrate it. You want to live it. That means that whatever your USP stands for, you do at all times.”
The success of a strategy depends on doing many things well that are integrated together under a common proposition. If Southwest had simply skimped on quality across-the-board, they never would have developed the loyal customer following that they enjoy today. It was only through making deliberate trade-offs between cost and convenience that offered their unique customer experience. As Herb described this mentality in his 2006 interview, Managing in Good Times and Bad,
“We’re not going to do a thousand different things that really won’t contribute much to the end result we are trying to achieve.”
Strategy is Trade-offs
“Strategy is making trade-offs in competing. The essence of strategy is choosing what not to do. Without trade-offs, there would be no need for choice and thus no need for strategy. Any good idea could and would be quickly imitated. Again, performance would once again depend wholly on operational effectiveness.” – Michael Porter, What is Strategy?
An unfortunate byproduct of our productivity-obsessed culture is that it’s given us cause to believe we can eliminate trade-offs. If we’re able to get more and more done each day, it makes sense that eventually, we’ll be able to make time for everything.
How many of us keep trying to fit one more thing in, despite already having a full plate? We accept a new opportunity at work, even though we’re already loaded with other responsibilities. A customer makes a new request on top of the existing scope and we readily accept the challenge, regardless of the impact it may have to our outstanding commitments.
I recently met with one employee who laid out his team’s top fifteen priorities. After challenging him to bring the total down to five, he and his team deliberated and told me they simply couldn’t cut it down further – they absolutely needed those fifteen top priorities.
His logic – and the logic of his team – was that they could do it all. Unsurprisingly, they couldn’t. By spreading their resources across fifteen areas, they made superficial progress on all of them, but failed to have a meaningful impact in any one area.
A sole focus on productivity tells us that with enough efficiency improvements, we can avoid trade-offs altogether. Yet this just doesn’t align to reality. We will always have trade-offs just as we will always have too many emails jamming up our inboxes.
But the bigger problem is that this ignores the benefit that trade-offs can drive. By recognizing where we need to best invest our available resources, we’re better positioned to achieve a sustainable advantage in those areas. Without that, the sole focus would be on operational effectiveness and like Alice and the Queen, we’re back to running faster and faster just to stay in place.
Decide Where You Want to Go Big
“The operational agenda involves continual improvement everywhere there are no trade-offs. Failure to do this creates vulnerability even for companies with a good strategy…In contrast, the strategic agenda is the right place for defining a unique position, making clear trade-offs, and tightening fit. It involves the continual search for ways to reinforce and extend the company’s position. The strategic agenda demands discipline and continuity; its enemies are distraction and compromise.” – Michael Porter, What is Strategy?
Both operational excellence and strategy are critical for success. Yet our obsession with speed and productivity has led to an unbalanced focus on increasing task efficiencies, while sacrificing the strategy that’s needed to tie everything together.
A good strategy defines how you can leverage the productivity techniques to deliver something with a long-term competitive advantage. It helps integrate your ongoing work to clarify which areas are worth further investment and which are merely distractions.
What’s your unique position or special talent that will separate you from the masses? How many of your daily activities focus on adding depth to that position? And how many have become distractions and a race to the bottom?
A good strategy clarifies your position for future situations, relieving the pressure that comes with every decision. Every day provides new distractions and compromises – having a defined strategy offers a guide for these decisions to ensure your daily actions remain aligned to the long-term vision. An old legal proverb says, “A country with many laws is a country of incompetent lawyers,” as it’s an ill-advised group that tries to solve every problem as a unique circumstance instead of under general rules of law. Similarly, making many decisions, instead of setting up a strategy to provide a common framework, is a path doomed to failure.
As new opportunities come up, what’s your process for deciding whether they’re in your best interest? Do they align to your strategy? Do they help secure your competitive advantage? Or are they merely distractions that lessen your ability to deliver real value?
And above all, a good strategy helps identify the trade-offs that are necessary to make the best use of the resources you have available. It’s very easy to draw up a long list of top priorities and hedge by trying to do a little bit of everything. Since everyone has a different set of priorities, this tends to make the consensus happy. The only downside, of course, is that nothing ever gets done. Trade-offs, and understanding how to leverage them, are the critical difference between moving forward and just running fast to stay in place. As Greg McKeown wrote in his tremendous book on the disciplined pursuit of less,
“Essentialists see trade-offs as an inherent part of life, not as an inherently negative part of life. Instead of asking, ‘What do I have to give up?’ they ask, ‘What do I want to go big on?'”
What do you want to go big on? I’m guessing it’s not running fast to stay in the same place.