A new vitality for our time?

More than anything, I want you and yours, and our enterprises and communities, to enjoy the gift of ongoing vitality. Despite the escalating challenges of modern life, genuine resilience is within our reach (even if sometimes counter-intuitive.)

Our brains really do determine what’s possible both personally and in business. Neuroscientists say that aging is a process of rigidifying. Facing almost intolerable uncertainty, it’s tempting to fall into habits that reduce resilience. But recent insights from brain science offer the choice of boosting vitality instead of losing it.

I am writing today with two gifts: this delightful article shows the interactive drivers working in a real example. And this new eBook shows how to apply them in your personal life as well as your enterprise.

It takes a bit of determination, but you can put the drivers to work for you. Open your holiday gift. And pass it on to anyone you care about. It truly is the gift that keeps on giving.

From my heart and mind to you and your loved ones,

Leading Indicators – an advantage of the few?

I've been reflecting on how rare it is that enterprises enjoy the benefit of good leading indicators. Seems obvious that everyone would benefit from identifying and tracking performance drivers.

It's not a new idea. Game theory – first published by mathematicians in the 1940's – calls for measuring how you know you're winning early in the game - long before the final score. The Balanced Scorecard was developed in the mid-90s at Harvard Business School. It calls for the mix of leading and lagging metrics in the diagram above, emphasizing the drivers of performance in Organizational Capacity (culture, leadership, the right competencies – that pesky soft stuff) and Operations.

The right leading metrics are both performance drivers and early warning signs: illuminating the actions and systems that generate value. Tracking them enables leaders to make timely adjustments to enhance performance.

Yet most boards and executives continue to focus on outcomes - lagging indicators - visible after the fact, like the final score of a game. Finance and Customer Satisfaction are among those outcomes. Much easier to identify and measure than leading indicators, certainly, but they don't drive stellar performance.

By contrast, Warby Parker is a highly-respected fast-growing company whose founders go out of their way to share what works for them. They launched their company powering customer service with “intelligent native speakers who are empowered to act” rather than spending on marketing. They thought that would be a good leading indicator. Bulls eye: they hit their first year's sales goals in the first three weeks of operation.

Why wouldn't execs invest in identifying what will drive performance in their enterprise? What's in the way of reaping the advantage of leading indicators? The best ones are enterprise-specific and proprietary, so we don't hear about them much. Plus, organizational capacity is a key performance driver, and it involves ‘soft' variables such as culture and leadership practices. Perhaps more importantly, identifying enterprise performance indicators requires a clear, compelling strategic core. What I call Core Promise: what do stakeholders in your ecosystem rely on you for (and what do you want them to rely on you for?)

Here's how I do it. And here are a couple of examples of performance drivers/leading indicators:

One of my favorites was designed by a team of scientists; it changed the culture of the research division of a Fortune 100 company and drove the performance the CEO was looking for. They moved from a cultural norm of “Get your project funded as long as possible” (a legacy from grad school) to measuring how quickly they could eliminate projects.

Another is research-based: tracking the term of donor and volunteer commitment drives a high-performance non-profit culture. Rather than dollars raised, measuring the number of five and ten year commitments transforms staff and Board behavior, messaging, events, and generates the kind of donor experience that makes a difference.

I'm collecting examples. Feel like sharing?

Gorgeous example

I love what Warby Parker is doing.

They disrupted an industry by introducing fashionable eyeglasses online – met their first year's sales goals in the first 3 weeks of operation.

For every pair you buy, they give a pair to someone living in poverty who needs glasses (there are 1 billion such people) – and guess what? They care about fashion too. In fact, the company was founded on the insight that even people living on $4/day or less will choose to ‘stay blind rather than wear something unfashionable on their face'. Watch these short INC videos – they're well worth your time.

Sure, they have a social mission, but they understand that their core promise is fashion – delivered sustainably for all their Stakeholders. They understand their ecosystem.

And it gets better. They understand the drivers of value: they know their leading indicators are culture and people. They hire based on personality and fit; one of their 6 questions in job interviews was, ”What was the last costume you wore?” They populate Customer Service with smart native speakers, and empower them to take care of customers as they see fit. They believed the cost of that would offset by greatly reduced marketing costs – and they were right.

Marketing? They believe in making people feel connected: they published a new kind of ‘annual report' showing what they did the prior year in terms of customer responses and engagement. Immediately they had their highest sales ever – in January, right after Christmas – higher than the days following their appearances on CBS news or the NY Times.

Think you're Stakeholder Centric? These folks set a new standard.

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Are You Fit to Thrive in Any Economy?