How CMOs Can Prepare Their Organisations For AI-Driven Decision Making
I help business and marketing leaders identify and get past the hurdles stopping them from reaching their growth objectives
By default this requires keeping an open mind and looking for the details that can point me in the right direction.
As Ray Dalio famously wrote in his book Principles:
- You need to know what you want?
- You need to understand what’s real?
- You need to decide what you’re going to do about it?
Problem solving is an exploration, which means when I’m not talking to people, I’m absorbed in research or digging through data.
I’d say I’m reasonably skilled at Excel and can make my way through data analysis in Python, but I often wish I had and knew how to use smart algorithms that can understand and complete complicated tasks on their own.
Fortunately, at the rate machine learning and AI is developing the day isn’t far (in fact it’s already here for some) when advanced analytics will be available to everyone across the organisation.
Are we ready to move decision making away from the C-Suite and to the people in the frontlines?
We’re not prepared.
As excited as I am, I also know that we’re not prepared for this change.
Now more than ever we need to enable, encourage and teach people to solve problems by making qualitative judgments using quantitative data without overlooking their personal knowledge of the context and the facts.
In other words, becoming data smart, not data blind.
It’s easier said than done.
Most organisations today are bogged down by archaic and unbelievably slow bureaucratic processes that no amount of AI driven smarts can get around, let alone create any real advantage for the organisation.
These process have indeed been in-place for one reason or another. But faster and more accurate data analysis is useless if people can’t act on the insights quickly and when it’s relevant.
That much is obvious.
What sometimes isn’t so clear is how can we create a culture of performance and accountability that can thrive when supported with advanced analytics and AI.
Answering this question is close to my heart because I’m passionate about building organisations that reach their growth objectives and uplift the people behind them.
In the last 2 years, I have been experimenting with various management models both within my own organisation and sparring with my clients.
I’m going to share the management model that has been the most successful for me.
It’s actually a combination of tried and tested techniques from 4 Disciples of Execution and Objectives and Key Responsibilities.
- The discipline of setting and following your Wildly Important Goals.
- Providing clear objectives and key responsibilities or OKRs.
- Creating a culture of accountability using a scoreboard.
Your Wildly Important Goals.
To be honest, it took me some time to get my head around finding my wildly important goals.
Following a WIG means fully and unequivocally committing to achieving only those goals goals that ensure the sustained survival and growth of your organisation AND ditching everything else.
That level of commitment requires focus so it’s important to have no more than 3 WIGs at a time. Resale arch has shown that your success rates exponentially decreases as the number of goals you pursue simultaneously increases.
Finding your WIG isn’t easy – something I learnt from experience.
When I decided to find my WIGs (I’m working on 2 at the moment) the first challenge I ran into was narrowing down to 2 WIGs. The second challenge was to ensure that I could back this objective without any BS metrics. (A prerequisite for getting others to commit to my WIG).
Now you might be thinking, “Well, of course I know what I need to do to succeed”. I’m sure you do, but are you certain that you AND your organisation are putting the required effort towards it?
Lessons from Levi’s.
Let me give you an example I recently read in HBR.
It comes from an interview with Chip Bergh, who is the current CEO of Levi’s. Before Levi’s he managed first the $57 billion acquisition of Gillette at Procter & Gamble and later ran that division.
The whole interview is worth reading although here I’m only going to share a short story from it.
At the time he started at Levi’s, the multinational brand’s revenue had fallen from $7 billion in 1997 to $4.1 billion in 2001. Furthermore, between 2001 and 2010 it didn’t manage to lift it past $4.5 billion.
One of the first things he asked at an employee town hall meeting was how many people thought that the company was performing well? To his surprise three-quarters of the employees raised their hand.
His second shock came when he asked his top 60 executives to tell him what they were working on and how it linked to the company’s strategy — instead of getting clear answers he got many blank stares.
What’s the lesson?
When your employees don’t have a realistic view of your company’s performance and your senior managers can’t connect their daily activities with your company’s strategy, the evidence is clear that they’ve lost track of their WIG and gotten lost in managing their daily whirlwind.
They are busy, sure, but definitely not going anywhere.
It’s possible that you’ve also experienced the same frustration. When left unchecked that frustration can lead to questioning your team’s skills or worse; their commitment.
If you’ve felt that way take the time to ensure that your team is aware of and believes in your organisation’s WIG.
Setting and communicating your WIG.
The worst mistake you can ever make when setting an objective — any objective — is to make it vague.
The way most managers define goals leaves a lot of room for interpretation e.g. “increase customer satisfaction and improve quality of service” is a vague goal.
A WIG has to be clear, precisely measurable and it has to have a deadline.
The vague goal from the previous example, when turned into a WIG, would look like this:
“Improve NPS from 30 to 70, while keeping the number of complaints to under 5 per quarter by the end of 2018.”
It’s the exact same goal, but now it’s clear what needs to be done, how much improvement is required for calling it a success and how much time we have.
Making sure that people across your organisation can make smart and informed decisions without being bogged down starts with having clearly defined, easily measurable goals with a set deadline.
Objectives & Key Responsibilities.
I’m not ashamed to admit that I’ve made this mistake myself when I’ve sent a detailed, well worded account of organisational goals, and the rationale behind them, to my team.
I’ve also sat through countless town halls meetings, getting inspired by well thought out and meaningful organisational goals being presented, only to feel lost and confused afterwards.
If you recall the lessons from Levi’s, one of their major problems was that their employees were disconnected from how their business was performing and their managers couldn’t connect their activities to the company’s strategy.
This shows that creating and communicating organisational WIGs isn’t enough without making sure that your managers and their teams understand their role and key responsibilities.
OKRs were introduced by Andy Grove, one of the co-founders of Intel, in the 1970’s. Today this powerful management method is used by organisations all around the world including Google, Microsoft and Apple.
Why do they work? According to Grove:
“OKRs aren't about what you know, but what you do with what you know.”
I discovered OKRs by reading John Doerr’s Measure What Matters which is now a part of my library of books on management. It’s an invaluable read for managers or team leaders.
Make it relatable or they’ll forget.
Before expecting any real results you have to make your organisational goals relatable for your managers and their teams.
Why?
Because they simply don’t have the time to decipher it.
We’re hardwired to avoid challenges. So when faced with a task that requires extra brain power, especially in the middle of an already demanding day at work, people tend to stick to what they already know.
Which, in most cases, means sticking to the status quo.
As a leader you can’t expect different results with the same effort.
After you’ve set your WIGs, take the time to meet your managers and talk about how it translates into an objective for them and their teams. In other words, take the time to clarify their impact on the company’s strategy.
At the same time give them a chance to describe what 3 Key Responsibilities they and individuals in their teams will have.
I often use 5 Key Responsibilities in total, but I only define three myself and let people come up with the remaining 2 themselves. Mostly because I believe I’ve hired the smartest and the most talented people for the job and I trust them to know what they’re doing. But also because we’re more committed to things we choose to do ourselves than when we’re being micromanaged.
Objectives and Key Responsibilities make your WIGs relatable and drives you one step closer towards ensuring that your employees can confidently make the decisions that push them and your organisation forward.
Building a culture of accountability.
I hate micro management. I think it has no place in a high performance work environment. It should raise all sorts of red flags if you end up resorting to it to get any kind of performance from your team.
Although if I’m being honest, managers don’t resort to micromanagement only when dealing with under-performers.
Sometimes your star performers have to resort to demanding micromanagement when they don’t have a clear idea of what’s expected of them or how their performance is measured.
By nature they avoid wasting time on things that produce no value and without aid they won’t be wasting time in your team for too long.
That’s where the scoreboard comes in. I’ve only recently started using it but I’m amazed by its impact.
Why do scoreboards work?
Scoreboards work because people play differently when someone is keeping score.
Behavioural psychology tells us that scoreboards make individual commitments public, and when anyone can see the score, it boosts motivation to follow through.
What should you include in your scoreboard?
Often offices are furnished with elaborate performance charts displayed on huge monitors for everyone to see.
Some of the most effective scoreboards I’ve seen have been displayed in areas where customer service people are answering phone calls or IT professionals are helping people sort out their arguments with the office printer.
What makes them great is that they track the number of effective actions or activities completed successfully e.g. number of calls answered or number of tickets processed.
The scoreboard that you’re going to keep has to be simple and impactful. The preferable way to do it is to track your team’s performance against their Key Responsibilities instead of revenue or leads.
The premise is that the Key Responsibilities have a direct relationship with increasing revenue or leads. So it only makes sense to encourage and enable people to do more of these activities.
Finally make sure that your scoreboard is visible to everyone who’s score is being kept, because that’s the only way you can encourage people to make informed qualitative decisions supported by quantitative data successfully.
Key takeaway.
Advanced analytics and AI are enabling companies to disrupt and ignite their competition not only because they have access to the right tools but because they’ve figured out how to benefit from this data across every level of their organisation.
You can do the same by incorporating these three things into the way you lead your organisation:
- Define your wildly important goals clearly, with measurable metrics and deadlines. Commit to not more than 3 such goals.
- Translate organisational goals into relevant objectives for teams and help individuals discover their Key Responsibilities.
- Keep score of how well your organisation is performing against their Key Responsibilities instead of a lag metric such as revenue.
