Time-horizon conflicts, efficient governments & tests for bad ideas
“Everyone is not your customer" - Seth Godin
Test for bad ideas
Some people think that the key to a great business is a great idea. Marc Randolph begs to differ. Not because he’s seen good ideas fail (he has, as co-founder and former CEO of Netflix) but because he believes “How do we generate good ideas?” is the wrong question to ask. In a conversation with Tim Ferris, he says, “The key to success is not good ideas. It’s how good you are at finding quick cheap and easy ways to test your ideas”.
He goes on to talk about how Netflix’s success only became assured once he’d worked out how to rapidly speed to product-market fit by testing large numbers of (sometimes crazy) hypotheses with their target audiences.
Question: How many ideas can you generate — and test — in the shortest possible time?
Conflicting time-horizons
We’re all getting through COVID, which is something that 12 months ago, none of us expected. But some didn’t: ask employees of Virgin Airlines. Or Hertz. Or the half dozen small local businesses within two blocks of my home and office in Fitzroy.
There are those who say that long-term strategic thinking is dead, because it’s futile and disruptible on the one hand and, on the other, actually not how performance in most companies is judged. Think about that for a moment: are you judged on quarterly or annual results? Or on your contribution to 3 - 10 year objectives?
But what about some of the organisations I work with, who by their nature must be long-term thinkers: an agricultural research institute whose investments are large and diverse, the bets numerous, and the payoff timeframes are long; the industry partnership that’s aiming to make all product packaging fully recyclable within 10 years — requiring buy-in from huge players, many thousands of them, doing dozens of things differently; the local government that’s reinventing itself from being seen as a ’toxic dump and home to the disadvantaged', to a ’second city hub’ for Melbourne in the next decade or two — attracting government & private sector investment in a rejuventated city centre, a university, metro rail lines, a hospital, sports stadium etc.
How do we reconcile these time horizons: the need for long-term vision (supported by investment and years of development work) and the short-term that can throw curve balls at us without notice?
To stick within the 5MSM format, I’ll be necessarily brief here, but in summary, it is literally by adopting three simultaneous mental models:
Set overall direction for 10 years+: this is your vision, or destination, based on an assessment of your context and your capabilities.
Determine a set of ‘investment of effort’ priorities for the medium term of 3 - 5 years, based on critical issues that need answering / solving linked to testable assumptions about your environment.
Finally, determine your headline activities for a single-year, in a way that balances accountability (single owner) with agility (frequent results monitoring).
Every few years, you should work top-down (strategy formulation), but annually you should assess all of these bottom-up (strategy review).
Question: Which time horizon are you operating with? Which is weakest for you now?
Is government truly inefficient?
Case study #1: Early this morning while drinking coffee on my rooftop garden, the police called me. They were downstairs, ready to investigate a burglary the night before at our house (my son’s bike was stolen from our garage!). I was pleased with their responsiveness (they were concerned as the theft occurred while we were in the house), their speed (phone last night, and in-person first thing today) and helpfulness (no, I’m not expecting them to recover the bike, but they had ready all of the paperwork I need to make an insurance claim).
Case study #2: During 2020’s lockdown, we downscaled from two 5-year old cars to one new one, which involved visits to VicRoads (our state motor registration authority). Again, I was deeply impressed with their humanity, even good humour with the waiting public, and the efficiency with which my moderately complex case was handled. In and out in 15 minutes made me very happy.
These minor bureaucratic transactions relate to a fascinating book I’m reading now, which challenges the cliche that “private sector innovates; government stagnates”. Mariana Mazzucato is one of my ‘public value’ heroes and in “Mission Economy: A Moonshot Guide to Changing Capitalism” she argues for a purpose and mission-led convergence of public and private sector interests, in the spirit of the 1960s Apollo missions. Today, we’re less concerned with space exploration, but can apply cross-sectoral innovations to our mental health epidemic, or ageing independently, or revitalising cities, or flattening out economic inequality.
But, at the heart of any such endeavour is government adopting a view of itself as innovative, vigorous, flexible and fast. And, even more importantly, of willing partners of government holding the same view.
Question: If you’re in government, what private sector partnerships are you cultivating, to solve complex issues? If you’re NOT in government, how are you partnering with them?
Drop me a line in the comments below to give me your thoughts on the questions above. And, I’d love it if you told others about please do tell others about 5MSM by sharing below!
I’ll see you next week,
Andrew
Business models and businesses, whether government not-for-profit or for-profit, must be designed to be profitable or breakeven. Typically they are not designed at all and financial weaknesses show up all the time
Becky, you're right, often there's not a 'failure of design', but an 'absence of design'! Even where design does occur, it's not done in an integrative fashion that considers needs of customers vs beneficiaries vs populations, nor balances needs of internal (staff) and external (partner) stakeholders. Plenty of room to improve here.