The Theory of Winning – Part III

Last week, I expanded on mental models and explained how you implement decentralised decision-making. This week, I want to concentrate on focus so that your resources have the greatest possible impact. I also want to explain some simple tools that you can implement immediately to help you get more bang for your buck.Surfaces and Gaps

If you look at any environment where you are going to compete, there will be surfaces and gaps.

Surfaces are places where your competitors are strong or areas that are difficult to make progress. For example, I could build an ‘online content streaming’ business but this would be a difficult market to crack because Netflix are the strongest players in this space. The resources required to knock them off their perch would be substantial and there is a risk that I would expend vast amounts of cash and energy with little to show for it.

Surfaces require enormous amounts of resources to be overcome. Gaps don’t.

Gaps are places where your competitors are weak or a space that no-one owns. This is why Fintech is a current trend because the scalability of tech has the potential to disrupt the banking industry by doing things more efficiently or effectively. There are ‘gaps’ there.

In the sporting world, the gaps might be weaknesses in an opponents defence. It’s why more and more teams use video analysis, they are looking for patterns of behaviour where gaps exist so that they can exploit them.

Imagine a goalkeeper preparing for the World Cup Final. It would probably be a good idea for him to watch the last 50 penalties that have been taken by their top five penalty takers. There might be patterns in where their opponents place their penalties. If the star striker shot to the left in 30/50 of his last penalties, it might be a good ‘go left’ when they take their first penalty. 

Military Example

In the military, the surfaces are areas where the enemy are strong – or believe they are strong.

During WW2, the Allies put considerable effort into convincing the Germans that they were going to invade Europe by crossing the Channel to Calais. General George Patton was placed in charge of the US 1st Army Group based in Kent. This was an entirely fictional unit comprising of ‘inflatable tanks’ that could be photographed from the air. Rommel was convinced that the Allies would not ‘waste’ someone as brilliant as Patton on a deception plan so the Germans focussed their resources and prepared to defend Calais. If you are going to try and deceive someone, you have to make it credible. Placing a ‘rockstar’ General with a track record of success only makes the deception plan more credible.

Once the invasion was underway, the Allies continued to mislead and deceive the Germans. They even dropped dummy paratroopers (Op Titanic) to convince them that the invasion of Normandy was a feint and that they weren’t landing the main force there. This allowed them time to get their forces ashore whilst the Germans were still convinced that Calais was the target for the main invasion force.

Business Example

In business, you’re not always in direct competition as you are in war but you can still take the principle of surfaces and gaps and apply it to your organisation.

The way I explain this to the Fintechs I work with is as follows:

Amazon didn’t start off by selling everything. They started off selling books. They drove deep into this niche until they became the only place that people considered buying books. I am sure that their leadership were advised to broaden their proposition but they ignored that advice and continued to drive hard into this ‘gap’.
When you are small, you don’t have the resource to be broad. Don’t try to do too much or you’ll achieve nothing. Look at the terrain, work out the surfaces and the gaps. Chose a gap and throw resource behind it so that you become the known expert in that area. Once you ‘own a space’, you can broaden into other areas.
Don’t try to spread-bet. Work out where you can stack the deck in your favour and win and keep doubling down until you do.

Sometimes, a company will create its own market and its own gap to exploit. Airbnb didn’t have a precedent but the early investors realised that if they could carve out a market and own it, the potential was exponential.  They created their own gap and have been exploiting it ever since.

Surfaces and Gaps are Fluid

The concept of surfaces and gaps is fluid. It is not fixed and in a constant state of flux.

The world is changing making yesterday’s surfaces, tomorrow’s gaps and vice versa. That’s why decentralised organisations win – because only a decentralised organisation can react fast enough to exploit a gap before it becomes a surface.

There is a famous TEDx talk by Bill Gross where he talks about the single biggest reason that startups succeed. The answer is timing.

Timing is everything because a brilliant idea executed at the wrong time hits a surface. A brilliant idea at the right time hits a gap and will be successful. That’s why it is notoriously difficult to accurately predict which start-ups will succeed and which will fail.

Sport Example 

The Golden State Warriors Basketball Team are another example of a team that have changed the way they play their game to win. They employ a decentralised approach for setting up their attacks allowing their players to make decisions based on where they are on the court. This makes them unpredictable and hard to defend against because they are able to exploit gaps as and when they appear.

Previously, most NBA Teams looked and played the same way. Each team was focussed on a ‘Seven Foot Centre’ surrounded by the traditional positions of power forward, small forward, shooting guard and point guard. They’d become predictable.
 
The Warriors decided to play the game differently with players who were interchangeable and could play with a high pace and tempo. They also started to make better use of the 3pt line taking more risk but scoring more points in the process.
 
Their style made them unpredictable and hard to defend against.

How can you set up your defence to play against a team where anyone can attack from any position? This is an example of decentralised decision-making in action. Get the players to think about where best to move to attack. Embrace the unpredictable nature of an attacking run and let them make the decisions themselves.

So What must you do as a Leader?

The first thing you have to do is understand the surfaces and gaps. Don’t just do something because you can – don’t spread bet with your resources.

Work out where the surfaces and gaps are and double down on the gaps.

Place large bets on a small number of logically considered work-streams because it is better to do a few things really well rather than try to do everything and compromise on all of them.

Giving Direction to Subordinates

There are a few tools that you can take directly from the military and implement into your organisation tomorrow.

The first is give people an end-state to work towards. Some might call this a vision or a mission. We define a Vision as a clear picture of the future that is bound by time. If it is not bound by time, it is a wish.

Kennedy’s ‘Man on the Moon’ Vision is the best example.

‘I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth’
JFK – May 1961.

A clear picture of the future that is bound by time.

Give this to your subordinates and then let them work out how to do it. This is important. You need to remain on hand to help and support them but let them do the majority of the work to put together the plan. This will force them to make decisions and use their own creativity and initiative. This develops them which in the long-term benefits them and the organisation as they develop skills in planning and execution.

You can track progress on a performance centre like the one below. This clarifies the vision and shows the ‘golden thread’ ensuring that everyone is working towards the same common end-state.

 
If you can’t see it – you can’t manage it. Make performance visible.

The following are subtle points but are equally important. They allow people to use their own initiative and work out how they achieve the end-state but with some guidance.

Intent – Tell people what you want to happen and why. Explain why it is so important that they do this.

Main Effort – Assign a Main Effort. What is the one thing that must happen in order to achieve the intent and the vision. What priority needs to be resourced heavily to ensure we achieve it? You cannot have more than one main effort. Two main efforts create indecision. Indecision creates delays which slows down the OODA Loop. Any more than a single priority is a ‘to-do’ list. The main effort can be changed to achieve the intent but it forces leaders to make a decision about what needs to happen.

It takes moral courage to focus strength and resources where they can be most effective rather than trying to be strong everywhere.

We use these terms in the military as it provides a common language that we can all refer to. We all know what is meant by a Main Effort and an Intent.

For Example

Imagine you are in the 14th Century. You need to deliver a message from the King of France to the King of England in London. You have to warn him about an invasion that is coming through Europe and on its way to England.

I have given you the task. You have two days to plan and tell me what resources you need.

The Vision would be something like ‘I need this message to be delivered to the King of England within one month’.

The Intent would be ‘Get the message to the King of England’

The Main Effort might be to ‘Cross the Channel safely’ because this might be seen as as the riskiest part of the task.

You haven’t been told how to do it or what route to take. You can therefore look at your resources and consider the most effective way to achieve this plan using your own initiative. If you encounter challenges along the way, you know the you need to overcome them to achieve the vision. How you overcome those challenges is up to you and you don’t need to keep coming back to me to ask for help.

It is a really simple example but you can see how decentralised decision-making allows team members to overcome challenges using their own initiative. This pays dividends in the future as the individual is able to think and act for themselves.

Wargaming 

Once the plan has been created – it should be stress-tested using a process called wargaming. This could take many forms but it might involve some questioning along the lines of ‘what will you do if…?’

This is designed to prepare them for scenarios that they are likely to encounter.

For example, if they have thought about how they will handle an ambush and rehearsed what they will do. Chances are they will be in a better place to react if they are ambushed. They will be prepared to act immediately, executing a quick OODA loop because they’ve thought about it beforehand.

Wargaming is a way of mitigating risks and preventing plans from failing. It is directly applicable to business and I have used the technique with Chris Paton to stress-test major transformation plans for Waitrose and the NHS.

If you can’t afford for your plan to fail – he’s definitely someone you should speak to.

You have to accept that there will be a certain amount of confusion and disorder when executing a plan. Few plans are executed exactly in accordance with the initial plan. They have to change because they are being executed in a world that keeps changing.

Understanding the OODA Loop and the Philosophy of Mission Command

Understanding the OODA Loop and the philosophy of Mission Command is about understanding principles rather than recipes.

Principles are universal and can be applied anywhere. They require a deeper level of understanding.

Recipes are for amateurs. They provide a quick solution that anyone can execute but do not take into account the context so have limited value.

I can’t cook. I can follow a recipe like an amateur but the difference between me and a Chef is that a Chef understands the principles of taste. He can open a fridge, look at what is in there and create something amazing because he knows which foods work together. 

If you can understand the principles behind ‘how the military win’, you can apply them in any circumstance and find a way to win.

Lead by Example 

Firstly, never follow the advice of someone that doesn’t follow it themselves. They either don’t believe it or don’t understand it well enough. Either way – it’s not much good.

So how do I implement this philosophy into my business?

These are just a couple of examples…

Observe – I have become a Techstars Mentor because I want to understand how tech can be applied to solve problems on an exponential scale. I coach the business founders on the Principles of Leadership and high performance and in return I get to observe and understand how they are solving problems and building businesses using technology.

Orientate – Have a learning cycle that you execute as a priority.

Read broadly.

Listen to podcasts.

Write.

Ingest quality information. Reflect on it. Explain it.

These activities help clarify my thinking and spot themes. They force me to challenge my mental models. Writing helps me to articulate my thoughts. If I can’t explain and convince people of the value of these principles, then I haven’t clarified them enough in my own mind.

I have written 70+ articles now.

If you go back to the earlier ones, they’re a bit ‘preachy’ and don’t necessarily connect with what I do but you have to start somewhere and you only get better with practice.

If I focus on the above two – and these are example of how I do it, my Decisions and Actions will improve because I have spent time developing my knowledge and understanding how the world works.

Investment in these areas – in particular the Orientation – will pay dividends. I am completely convinced of it – that’s why I do it.

If you have found this interesting or helpful, please share it, it helps me get my thoughts out there and I really appreciate it. Secondly, I have started to do more and more public speaking so if you know anyone that is looking for speakers, please don’t hesitate to reach out! Thanks.

 

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