"15% better" or "best in the world"?

"15% better" or "best in the world"?

Incrementalism is a trap. In my opinion at least. It is a byproduct of short term, quarter by quarter thinking. It is a sure-fire way to become the victim of disruption. It is also common in just about every team I’ve ever worked with. 

Whether you work at a public company or a private one, the expectation of consistent, predictable growth is ever-present.  Shareholders expect 10% growth in revenue, 12% growth in earnings. The board expects 15% more customers and a 5% increase in annual contract value. The entire financial underpinning of corporations is based on incremental growth and that trickles down to our teams. We need 10% growth in sales so we need 10% growth in web site visits. We need 10% growth in web site visits so we need 10% growth in ad conversions. We need 10% growth in ad conversions so we must need 10% growth in spending. The dominos tip one by one until all of us are fixated on 10% improvement.

But is that the mindset we really want? Is that how you win in the long run? Whatever happened to being the best in the world?

The question for this week: What can managers do to discourage incremental thinking and inspire a team to pursue bigger and better goals?

Incrementalism, in my opinion, is something to be avoided at all costs. I understand the need for growth targets at the highest levels of a company, but it can’t be a replacement for the pursuit of greatness.

Some dangers in fixating on incremental growth:

  • It’s hard to inspire a team with a goal of 15% improvement
  • The pursuit of incremental improvement artificially limits innovation
  • Incremental goals are based on a false assumption that the current state is close to optimal
  • An incremental growth culture attracts data manipulators and politicians
  • It encourages short term thinking only and deprioritizes big picture ideas
  • Incrementalism fails to push people and teams to their personal best

The endless quarter-by-quarter routine can trick teams into thinking only about incremental improvements. If you’re not careful, you can fool yourself and your team into thinking the attainment of short term growth objectives is the ultimate goal. It isn’t. In my opinion, a fixation on incremental growth will prevent your team from ever being great. While I understand that some short and medium term goals are necessary, I try to rally my teams around the pursuit of being the best in the world.

Here are 5 tactics I use to do that.

1. Build a Culture of Learning

One of the great things about learning is that it never ends. There is no final state where we can conclude that we’re officially learned. It’s an ongoing pursuit. When you build a culture of learning – when everyone on your team gets a little smarter and better every day – you make progress towards becoming the best in the world. While other companies and teams are fixated on growing web site traffic by 15% or increasing twitter followers by 10%, your team is pursuing something much bigger. It’s a source of advantage.

My recommendation to managers is to instill a culture of learning on your team. Focus less on incremental growth and more on the pursuit of mastery. Growth will be a natural byproduct of the collective expertise your team is accumulating every day. You’ll get growth by being the best at what you do, and you won’t artificially limit it to 15%.

2. Benchmark Beyond Your Competitive Set

I frequently see companies and teams only benchmark against industry competitors. In some areas, like revenue growth and market share, this makes sense. But in most areas of the business, comparing only to your industry competitors places an artificial ceiling that doesn’t need to be there. Back to the web site example … You work for a health care company and your team sets a goal to have the best web site in the industry. On the surface that sounds like a reasonable goal. Having a better web site than your competitors will help. But is that enough? What if all your competitors have crappy websites? Is there not a more ambitious goal to pursue? Which companies have the best web sites in the world regardless of industry? Shouldn’t that be the benchmark?

My recommendation to managers is to start benchmarking outside your set of competitors. Set loftier goals. Stop measuring solely on incremental improvement from the current state. Stop measuring yourself only against a limited set of competitors. Get your team focused on being the best in the world.

3. Take on Bigger Projects

If I need to achieve 15% growth on a metric, I will design strategies and projects to do just that. The team will play it safe, take fewer risks. There are many negative outcomes that can result from this. For one, your team will be bored and uninspired. Your whole life becomes incremental if you’re not careful. Your team becomes less engaged and before you know it even incremental growth seems unattainable. You also become more vulnerable to disruption. While you’re off pursuing small projects, some collection of college kids is making big moves in a garage somewhere.

My recommendation to managers is to have one big project going at all times. Of course, you need some small stuff, you need to hit some targets, you need to keep the lights on. But it’s vital to the health of your team and the long-term health of your business, to pursue great things.  Keep one, exciting, long term project on your priority list.

4. Hire People Who Want to be Great

This one will seem self-evident at first glance. Why wouldn’t we hire people who want to be great? Who doesn’t want to be great? Don’t we all? I’m not sure we do honestly. At least not in action. Many of us want to be successful. Many of us want to be wealthy. Many of us want to be respected. But not everyone is driven by the pure motivation of being great – of mastering a craft – of being the best. In my experience, building a team of individuals who are intrinsically motivated by mastery can lead to competitive advantage.

My recommendation to managers is to seek out team members who are driven by the pursuit of greatness. Test for it in the interview process. Talk to candidates about your philosophy of moving past incrementalism and towards the world’s best, and see who’s eyes light up. Listen for clues to see which candidates are motivated to mastery. Are they dedicated to learning and self-improvement? Do they know what companies are the best in the world? Do they know what the best looks like? Do they have a plan to get there?

5. Talk Openly About the Pursuit of “Best in the World”

It’s important to talk to your team about the quest for greatness. The concept can be a check and balance when evaluating strategies and priorities. Is the approach we’re considering going to help us be the best in the world or just a little bit better? This looks like a good program, but what are the best companies in the world doing? What can we learn from them?

My recommendation is to talk openly about this philosophy. Get your team thinking about being the best vs. just getting better. Use it as a measuring stick when evaluating ideas and alternatives.

It’s easy to understand why so many companies and teams get stuck in the incrementalism trap. The financial fabric underlying all businesses encourages this type of thinking. But every so often we are reminded, by companies like AirBnB or Uber or Tesla, that there can be a steep price to pay for incremental thinking. My advice to managers is to reject incrementalism as a defining goal and rally your teams around the pursuit of best in the world.

I’d love to hear your thoughts and experiences with this topic. Please email me or share in the comments.

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