We are no strangers to the continuous demands of customers and executives. It is important to ensure that your org and engineering teams are producing “things” that people need them to do. We look behind ‘the weasel words’ and ‘wordsmithing’ using tools like the North Star framework to get to your orgs clarity of purpose.
What is your org transforming into?
We often have conversations about transformation and purpose. We discuss this in detail in The Value Flywheel Effect. A lot of companies are transforming. Do you know what you are transforming into? It’s an area that we’ve had a lot of conversations on and experiences of transformation and changing companies using the North Star framework.
A lot of organizations see the successes of others. Or they see their competitors, and from the outside, they look like they’ve succeeded. And they think we want a bit of that. We should adopt whatever they’re doing. But they don’t understand why they’re trying to transform. They don’t understand the reasons behind transformation or trying to improve. And they are seeking status, acting on jealousy, or self-preservation. They are not basing their decision to transform on a core understanding of the purpose for why you are doing the things you’re doing. Going down that rabbit hole can be very philosophical and intense.
Does your whole org understand the mission?
Successful organizations have a good idea of what they want to transform into. But perhaps the broader organization doesn’t. You’ll hear businesses talk about wanting to corner the market or drive up the business rate. But the broader organization feels outside of it or understands the mission. A lot of the time, it needs to be more understanding of that mission and how it relates to what they’re doing on the ground. Teams or development squads need to understand how they will contribute to that mission and how their actions impact the overall mission. And that mission will be described as transformation.Successful transformations involve everybody in the company. We’ve run North Star framework exercises and the North Star framework playbook. ‘Amplitude’ produces the workshop with John Cutler. That’s a phenomenal practice or tool for understanding where you are in the overall transformation.
The North Star Framework
The North Star framework is brilliant because you find the one metric that matters, and then you work at how you can work backward from it. And for many companies, the one metric that matters is not ‘making money.’ Every company will have a goal for profitability. There’s a great book by Mariana Mazzucato called ‘Mission Economy – A moonshot guide to changing capitalism.’ It’s a capitalist thing to say we will make money every quarter, but a company should have a mission above that.
And I think one of the things that Amazon are good at, and granted they’re a trillion dollar company, is a thing called ‘single threaded leadership’: one person who’s in charge of the customer need. That’s what they do.If you figure out what that customer need is (the mission), then you can use the North Star framework to work backward from that and figure out all the metrics to get you to that and join the dots. We’ve had great success with North Star in the past. But if you don’t know why you’re here, you’ve got nothing to work backward from.
Weasel words and lag metrics
Most of the time, people see the lag metrics or try to chase them: ‘Oh, make more money, increase revenue, or sell more units. They don’t think upstream. They must consider the North Star or the input metrics that make a difference. There’s a detachment from the people on the ground doing the work, trying to work as hard as they can with the best intentions because they don’t have that purpose or that alignment to the actual real purpose or the real North Star. And their efforts are in vain. They’re not influencing input metrics that could affect the actual North Star.
Amazon talks about ‘weasel words’ as well. And the ‘elevator pitch’ is a great way to test that purpose. In Silicon Valley, every company pitches that we will do this because we will change the world. So they use all these ‘weasel words’: ‘We are going to be the best, we’re going to change the world.’ But that isn’t saying anything. That’s just an empty statement. A good elevator pitch corners a customer’s need, and it’s a great way to test your ‘clarity of purpose.’
Remember your lead measures.
We mention chasing lag measures and the processes or practices North Star gave us to link to ‘the money in the bank.’ And we mention working backward to lead your transformation through metrics. And metrics are essential to the organization from a financial perspective. But what are the lead measures to properly influence those lag measures? What sorts of things could we be doing more effectively, how do you instrument your transformation, and how do you know that those lead measures impact the overall ‘money in the bank’ or core outcome? We can move the needle on this North Star metric, which should result in successful outcomes.
But the exciting pieces on the left of the North Star are the lead measures. If you don’t have those metrics, and that team needs to understand how it’s playing into the overall big picture, the management side can become more manageable. Whereas if you’ve got those lead measures, and the teams know what they’re trying to do about the influence of the overall North Star, it becomes straightforward to pivot or understand a squad impacts customer value. Oddly, many organizations operate differently, even though it gives you a lot of opportunities to crack.
The importance of a psychologically safe environment
Organizations need to be brave with discussing the Purpose of their North Star. They have to set up to invite some level of challenge to that. Once you make this visible, make metrics observable, start talking about the North Star and essential metrics, and align your teams. The teams then become engaged with making a difference and seeing the benefits of the work. Then the teams will start challenging the rest of the organization by saying: ‘That doesn’t quite make sense, I don’t think that input metric is quite right, can we change that to something better?’.
We discuss this in The Value Flywheel Effect, but you need a psychologically safe environment that invites a level of challenge. So that your purpose can exist throughout the org through the teams, and they buy into it, it’s transparent, and they can see that what they’re doing makes a difference to the overall income for the company.That purpose needs to be consistent. That lag metric needs to be consistent over a long time. I enjoy people talking about ‘safe to fail’ and ‘fail fast experimentation.’ Don’t experiment with your lag metrics! Experiment with your lead metrics. If you experiment with your lag metrics, the company gets fed up and will think you need a goal. So you’ve got to lock in the lag metrics and experiment with the lead metrics because that’s how to find out what will move the needle.
You can’t wordsmith your way out.
Another thing we discuss in the book is that you can Wardley map your market to determine which capabilities should be your differentiator. What’s your IP? And what do you not need? What is your competition? Decide what you’ll get rid of because it’s not a differentiator. And what you’ll hang on to because it’s core to your clarity of purpose.When shaping purpose, you need situational awareness of the market you’re operating in to shape a meaningful purpose or North Star. There’s no point in saying, ‘We’re gonna be the Amazon of Amazon.’ Amazon has taken it already. You’ve got to know your landscape and who you’re competing against to shape what you will attack.
Concerning wordsmithing, if your purpose is good, it’s good, and it doesn’t matter what words you use to describe it. If it means something and is intriguing, then it will work. You can’t wordsmith your way out of a wrong purpose. So that’s the craic. It’s been an exciting conversation on the North Star Framework and Purpose. We explore this more in the book. And we’ve more blog posts on this at TheServerlessEdge.com and posts on Twitter @ServerlessEdge.