Opinion: Monitoring your silent pulse

What if you were losing relevance and didn’t even know? Michael McQueen pinpoints five key elements that are central to staying important.

If I asked you how you would know if the past 12 months were successful, what would you say? That sales had increased, market share had grown or the balance sheet was healthier? While these metrics are somewhat useful, they are becoming increasingly unreliable in an age of unprecedented change and disruption. These numeric measures of organisational health (what I call a business’ audible pulse) are lagging indicators. They only gauge the effectiveness of past decisions and are therefore dangerously inadequate. Consider how the strong audible pulses of many recently failed businesses masked the fact that their underlying fundamentals were anything but healthy.

Organisations are often way down the track towards decline and obsolescence long before there is any external evidence of this. And by the time your audible pulse indicates there is something wrong, it may be too late to do anything about it.

To successfully navigate disruptive headwinds of change, leaders must remain constantly aware of their silent pulse. Unlike its audible counterpart, it monitors fundamentals such as momentum, vitality and relevance.

Howard Schultz recognised the silent pulse’s importance on his return to the helm of Starbucks in 2008. Even though Starbucks had been hitting home runs year on year in terms of growth, Schultz sensed that something was wrong. As he described it, Starbucks was failing to create the “soulful, romantic experience” for customers for which it had once been renowned. “We’d lost sight of the experience around the coffee and we were too focused on ringing the register,” Schultz said. To put it differently, Schultz knew that while Starbucks’ audible pulse was strong, its silent pulse was anything but.

Similarly, when former Google executive Marissa Mayer took the reins at Yahoo, she took immediate steps to focus the company on its silent pulse. One way she did this was to remove Yahoo’s live-feed share price indicator from its internal website. “I want you thinking about users,” she said, signalling to staff that it was more important for Yahoo to focus on its silent pulse by creating exciting web services than monitoring their audible pulse as expressed in its stock levels. To gauge your organisation’s silent pulse, consider posing these questions to your executive leadership team:

Do our competitors tend to copy us? Are we leading the market or playing catch-up in response to the strategic moves of others?
Are our day-to-day processes flexible and adaptable? How many systems and policies are in place to unconsciously preserve the status quo? Does a culture exist where new approaches or ideas are met with resistance? Look out for the phrase: “But that’s the way it’s always been done.”
Are you more excited about the future than the past? In a social setting, do company leaders tend to talk of the successes and milestones of the past or the opportunities and ambitions for the road ahead?
Do you spend more time on strategy than maintenance? How much time is dedicated each week to putting out fires and dealing with the urgent rather than the important? Similarly, how much of the board’s time is spent in reactive rather than strategic mode?
Has one of your team members actively disagreed with you in the past week? Do team members with different points of view feel comfortable to speak truth to power or is there a pressure to conform? In the same way, how many dissenting views are expressed or encouraged in board meetings?
While these questions may be valuable in gauging your silent pulse, what matters more is how you can maintain momentum, vitality and relevance in the years to come. I would suggest that there are five key elements that are central to winning the battle for relevance:

1. Re-calibrate: While an appetite for change is critical to staying ahead, first discern which fundamentals in the organisation should never change – the non-negotiable values, principles and purpose. Also encourage re-calibration with the organisation’s core DNA first and allow this to be a guidepost for strategy.

2. Re-fresh: Just like gardens, organisations also require regular pruning of traditions and people inhibiting their future growth, even though this can be painful in the short-term.

3. Re-frame: We were raised to believe the lie that “great minds think alike”. But the greatest and most creative minds have always thought very differently from their peers and prevailing wisdom of the era. Being able to view the world differently is key to innovation and invention. So pay attention to the perspectives of those who have fresh eyes, often due to their lack of experience. They think outside the box because they do not know what the “box” even looks like.

4. Re-engineer: “To survive, a company’s internal rate of change has to be greater than the external rate of change,” observed Paul Raines, CEO of American electrical retailer GameStop. This means continually re-engineering internal systems and processes. Repeating the habits that worked in the past can set you on a collision course with inefficiency and irrelevance.

5. Re-position: As times and needs evolve, so must the positioning of businesses and brands. This could mean developing new products and services, tapping into new markets, or completely overhauling a brand’s messaging.

Staying ahead requires paying attention to the vital signs of your organisation. Winning the battle for relevance is about anticipating, preparing for and embracing change - no matter how uncomfortable or confronting it may be.