Half full AND half emptyPosted on April 10th, 2011 by Paul McArdle – 7 Comments
Recently, I’ve been finishing off the book “Chasing the Rabbit” by Steven J. Spear.
The book has a passage that provided a much clearer description of something I’ve tried to explain to various people at various times over the past 11 years.
It’s a quotation from a person relating their experience in a personal performance review:
“… At the end of the year, it became time for my annual review. At [ … ], reports are pretty simple: For almost every measure it is red, yellow or green. As I started going down the sheet, I started looking at all the red, the preponderance of yellow, and a paltry amount of green. I had know all along where we were, but this was the first time I had confronted the reality of how far we were from the objectives we had set many months before. Right before my meeting, I stopped for a minute and called my wife. ‘I’m going for my review right now’, I explained. ‘I may be out of a job in this afternoon.’ With that, I walked into his office.
I started by apologising. He listened for a while and asked why I was being so contrite. What had I done wrong?
I started to show him my summary sheet, all the red and yellow and the marked lack of green. The year was pretty much a failure, as far as I could tell.
‘No, the year was a success’
‘You made a lot of progress – ‘
‘But’, I interrupted, ‘the goals we set when we started…’
‘Those were what we had to achieve to absolutely delight the market. Those are real targets. We set those so that we wouldn’t fool ourselves into thinking we are better than we actually are. We weren’t good enough then, and we still aren’t good enough. But we are better. … We are going to be better yet. Don’t worry. The year was a success. We’re just not done.”
(p284-285 in my copy – my emphasis added)
What does this have to do with us?
Several things – including these two:
1) Both sides of performance
Sometimes I have not succeeded in communicating a similar paradoxical message to several groups of people – including employees, and shareholders – our glass is half full, and half empty.
(a) Company performance
This has been true with the performance of the company.
i. Half full
In the eleven years we have been in business, we’ve reached some significant achievements.
We’ve grown the business from a standing start (with no products) in 2000 to be in a position where we provide a customer’s first choice of software solution in many of our chosen niches.
Through the provision of software to more than 120 companies (predominantly blue-chip, corporate clients) operating in and around Australia’s National Electricity Market, we have started to deliver on our mission of “marking the electricity market understandable”.
By doing this, we’ve been playing a role in helping the NEM to deliver economic efficiency, for the benefit for all.
We’ve also succeeded in ensuring that we serve not only wholesale market participants, but also a broad range of others.
The services we’ve provided (complete with upgrades) continue to be valued by clients, year after year.
As a result of this, we’ve grown our revenues from repeat software sales from 2002-03 to 2010-11 at an average compound rate of 25% annually.
We’ve also managed to put together ez2viewOntario as a product that tested whether we could export our technology internationally. Since 2002 we’ve served something like 17 different clients with this software. So it’s been a great learning experience.
ii. Half empty
On the flip side, some days it seems like “where do I start?”. On those days, it seems like we’ve made every mistake in the book, and enough for spare volumes.
In terms of products, we’ve had some hits, and some big misses. Even with our hits, it has not been all smooth sailing (like what Shane alluded to here).
In terms of people, we’ve had some hits and some misses, as well. In some cases, we’ve just brought the wrong people onto the bus. We’ve also had much experience of wrong seats on the bus – plus much more…
For our shareholders, who are still waiting for their first dividend after 11 years, there’s also been disappointment.
Averaging 25% compound growth in software sales over the past 8 years is not altogether a bad story – but it’s been much lower than we have wanted. As a result, we’ve missed some opportunities. To get where we want to go, we’ll have to lift this growth rate such that it averages 40% annually.
What has disappointed most has been the many ways in which we have not delighted our customers. For us (with our focus on “Customers First”) this is the most telling shortcoming.
We’ve come a long way in this respect, but we still have a long way to go. As the speaker above said, we’re not done yet.
(b) Individual performance
Likewise - at various stages over the past 11 years we’ve also had occasions when I’ve been unable to clearly communicate that, whilst certain employees have made good progress of improvement, there is still a long way to go.
The reality is, we’ll never be fully “done”. Our clients (and our competitors) won’t let that happen.
2) A clear report card
I like the reference in the book to a very simple reporting system – just red, yellow and green.
This is very much aligned with the way we strive to deliver Clarity (along with Convenience and Cost-effectiveness) in our software.
(a) For the electricity market
NEM-Watch provides a simple, real-time reporting system for Australia’s National Electricity Market (NEM) as a whole.
Whilst it uses a graduated scale of colours instead of just red, yellow and green, the colours do provide context to the data – whether it be that demand is relatively high, or temperature, or price ….
(b) For our company
For years we’ve been progressively refining our process of publishing a clear report card for the company as a whole:
We’ve been progressively enhancing a small number of financial reports that we post within our office, so they can be viewed by people who can actually make a difference to these results.
There’s much more we can do – to ensure our company report card does clearly provide the “half full & half empty” picture that will continue for some time to come.
For instance, our company dashboard needs to include a “Customer Happiness Index”, or Net Promoter Score (discussed here on HBR), or something else (a metric that really reflects the nuances of our business).
(c) For each team, and individual
Similarly, there may be things we can do for each team, and even each individual within the company.
One of the many important features of the Agile philosophy is (in my view) the clear reporting that goes along with it – the burn-down charts for an iteration, and the plot of velocity across iterations. These artefacts we have to make work, in our context.
Similarly, we need to develop similar clear metrics for the Sales & Marketing Department – and for other areas of the company.