In an OKR Podcast, 3M Automotive & Aerospace Division president Steve Shafer shared his observations with WorkBoard CEO Deidre Paknad on the potency of momentum to accelerate transformation and outcomes. Here is an excerpt of their conversation about momentum and why it is what winning teams have in common. The full discussion is available here.
We’ve had the pleasure of discussing leadership topics several times, and your insights always elevate my thinking. Let's start with a topic near and dear to both of us: momentum. Tell us how you think about it.
It is hard to define and hard to measure, but people know it when they see it. My fascination with momentum comes from having run several different businesses. I have seen organizations at different momentum stages. Some are stuck in a valley, others are climbing out, and others are flying high, struggling to hang on. I think momentum gives people the confidence to make bolder, more decisive decisions.
You observed that our mindset can limit our potential momentum. How do we sometimes get in our own way?
Unlike what you see on TV where a great coach gives that half-time speech in the locker room which changes the trajectory of the game, that is often not the case in business and real life.
It is the everyday, small things that make a difference in driving momentum. You set the tone with the language you choose, the comments you make, and the questions you ask your teams. I coach my direct reports around that. I can have a town hall and give a rah-rah pep talk about how we are winning, but if people go back to their desks or their home offices and do not feel it in the communications they have with their teams and with their supervisor, it does not work.
One thing you said that struck me the last time we talked centered around how to frame these conversations. There’s a difference between saying to ourselves we're not good at this versus we are not good at this yet. One carries a lot of possibility, and the other has a lot of finality.
Anyone running a business has problems and challenges. The question is how do we talk about them? You can sit and ask how the hell did we get here, how did we screw this up, and why didn’t we see this coming. But those types of conversations quickly draw energy out of an organization.
Another way to frame the discussion focuses on how to learn from the experience and how to do better next time. These conversations acknowledge that what we are doing is hard and we are gaining experience to be successful in the future. It does not erase the tough conversations, but it sets a tone that says learning is part of the process.
3M is a storied innovator of so many dimensions. How do you bring the concepts of learning and limitless thinking into the culture and the work you do in the automotive and aerospace business?
We apply OKR thinking to our most important strategies, the vital few things we must get right to be successful in our business over the longer term.
There has been a lot of urgency, crisis management, and supply chain disruptions in the last couple of years. These things must be addressed, but at the same time, you cannot take your eye off the most important things you must get done. We have longer cycle businesses in our industry, and those important things take years of investment and focus and consistency to build out. And you must do both.
A lot of people think that OKRs cannot work in a quarterly cadence and cannot work in a long cycle business. But you find that they drive clarity precisely because this quarter's results were set a year back.
At 3M, a big public company, quarterly results matter. I lead a business in which I do not have the luxury of choosing whether I want to be a long-term thinker or deliver near term results. The reality is I must do both. We use OKR thinking to primarily focus on what we are trying to do in the long term. It helps us focus on what we are trying to achieve and stretch ourselves to think about what is possible. I think it helps in a world where you must do both.
It is often challenging inside a big company to think about what is possible when it comes to, say, budget setting around quarterly results. Like many companies, we take seriously our P&L results, and that can be a very fixed mindset in thinking did I hit my operating income target or not? And if I did not, I failed.
If you think about the near term that way, it can overwhelm and drag down momentum if things are not going well. Therefore, we really stretch ourselves on our OKRs. If I'm working on strategies that don't have an impact or deliver financial success, they are probably not the right strategies. Much of the energy of my organization - 80% of the team, 80% of their focus - is making sure that a year from now our business is a successful place. That is where we focus our OKR thinking.
What are your observations on how cultures and micro-cultures affect people's perception of momentum, their appetite to lean into it, and how do you lead within the context?
I spent a few years working in China and that's a culture in which momentum can shift quickly. Some of that is cultural, but I think the concept of momentum is very humanistic. When people feel like things are going well, they have confidence, and they feel they can make more decisive decisions. Some cultures are more conservative than others about how to think about what is possible, and OKR thinking connects us together in ways that relate more to our human emotions rather than just a set of management principles.
3M is a company with its own very strong culture. The company culture helps us navigate around the world because there are some things you have in common when you are a 3Mer. This idea of momentum and OKR thinking is universally translatable.
In the automotive industry, there's epic transformation afoot and it is accelerating. What's at stake?
Certainly, the automotive world today is changing more quickly than what the industry has experienced in the past. There are amazing companies doing incredible things. Many of them are newer players - a lot of the companies in China are new, almost by definition from the way the market developed there. Then there are players like Tesla disrupting the space.
The concept of electric vehicles wasn’t new, but the timelines in how people are thinking about them have collapsed dramatically. This has forced the hand for many traditional companies to say, wait a minute, these guys are doing this crazy stuff, but is it that crazy considering their market valuations?
It is a good example of the kind of momentum in which they have the courage to believe they can do this. It is not that these companies don't have missteps, but they don't let those deter them from making bold decisions. 3M is 120 years old, and we have been bold players too. We have innovated ourselves more times over in the last 120 years than most companies.
Newer companies have less to lose than more established ones. There are many Chinese companies that can take risks and if they run into problems, they can start anew. Mature companies must weigh the risk -reward profiles around innovation all the time. We are challenged by these new companies, we are challenged to think differently, whether they are a competitor or a customer. I think it’s good. They learn from us too and what we've learned through experience.
The pace of change is accelerating and for some traditional, established companies it is going to get more and more difficult. But the future will play out whether the companies work through and fight through that next phase or not. With everything accelerating, you must think about risk differently, and the winners and losers are going to shake out much faster.
Nobody has a permanent position on the global 1000 or the Fortune 500, right? In thinking about OKRs, having that quarterly iteration, aiming for great, and building in learning at a higher pace seems super important to companies that have a solid position in a market and want to innovate at an accelerated pace that matches the market.
Setting objectives around where we are trying to go means we have consistency in what we are trying to achieve. You don’t want to constantly be changing course, but you need to iterate as you learn. We learn a lot every day, every week, every quarter. To do that, you need to have an empowered team and that is what people want. They want to feel like they are involved, and they want to have a sense of purpose.
I think for senior leaders, we also must get comfortable with our experience becoming less relevant in terms of knowing all the answers. And that fits well with what the younger generation of people coming into the workforce expect. They expect to have more of a say and influence.
I encourage leaders to invest the time to consider the influence they can have on people's mindset, morale and momentum, and how to use OKRs within their organization to build momentum whether it is setting the tone, empowering people to reach their best possible or energizing them around the purpose the organization is trying to achieve. Momentum is powerful and OKR thinking is a great enabler for it.
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