Simple Rules Are Not So Simple - Aditya Yadav

1. “Running an Agile Fortune 500 Company”
Aditya Yadav, aditya.yadav@gmail.com
in.linkedin.com/in/adityayadav76
*

2. *
*A Typical Global Company
*Fortune 500/1000
*200 Divisions
*40 Countries
*25000 Employees

3. @ Acme Inc.
*

4. *
*Original Question “Should we use Simple Rules
to run our business?”
*The Correct Question - “Simple Rules is a Great
Concept but very tricky to implement right.
Lets understand what’s involved and how and
why to do what. Shall we?”

5. And The Philosophy Behind The Answer
*

6. *
*To allow quick moves in dynamic markets
*Focus on pursue of opportunities by increasing
flexibility in decision taking
*Just enough guidance and structure by a limited set
(<10) of simple and unique rules regarding key
processes
*Rules mainly experience-based, important to
neither set rules too broad nor too vague
*Challenge to balance long-term perspective and to
adapt rules to changing conditions

7. *
*How-to rules, guiding execution of key processes
(How!)
*Boundary rules, limiting range of opportunities
(company scope) (What!)
*Priority rules, setting priorities for resource allocation
(What!)
*Timing rules, adapting internal schedules to the pace
of markets (What! & When!)
*Exit rules, defining criteria to exit opportunities in the
light of unpredictable developments (What! & When!)
*** Ref: Chiligum strategies, Slideshare

8. *
*They Serve 3 Purposes
*Co-ordination
*Agility (Avoiding Paralysis)
*Complexity & Dimensional Reduction
*But they are Suboptimal!!!
*The Golden Rule is – First Use Data & Facts (to get
an Optimal Solution). In Absence of which use The
Simple Rules
*Need a procedure for Quick Disambiguation!!!
*Bottom Up Procedure!!! Keep the Bureaucracy
away!

9. *
*Simple Rules are normally Top Down
*But if transparent they can be Bottom Up
*Simple Rules can be based on
*Heuristics/Experience, or
*Data & Facts (Better!)
*They are Primarily a DECISION MAKING Framework
for Execution!
*In a Strategy by Design or Emergent Strategy (Both!)
Paradigm
*They are the Ground Rules!!! Within the Company

10. *
* Turnaround
* Fix – Why!
* Fix – What!
* Fix – When!
* Open – How!
* Uncertainty & Complexity/Emergent Strategy
* Fix - Why!
* Open – What!
* Open - How!
* Operational Excellence/Stability/Optimization
* Fix – What!
* Fix – How!

11. *
* The 3M Board has very simple rules to decide on product investments
* Can we make it?
* Will they buy it?
* Can we make reasonable profit from it?
* 3M gets it right almost always because this is not the only thing they do to take decisions. But if you copied these 3
simple rules from 3M and did just that for all your product investment decisions.
* They will work most of the times… giving an illusion of it working
* But when applied blindly across the horizon will be strategically grossly sub-optimal
* The 3 Rules
* Will not work in GreenField Projects, Blue Ocean Strategies, Radical and Disruptive Offerings
* They will limit future 3M offerings around their core areas/segments where predictions and projections are easily possible
* 3M will not launch new products iteratively or experiment with product launches or markets because profitability and
buying estimate is a pre condition.
* 3M will limit its future products to what it can make reasonably within the current state of their technology
* The rules will necessitate the existence of SuperHeroes who persist besides rejections till the time projections and
estimates worked out with reasonable assurance and technology risks minimized in a mostly tech risk averse company (Not
in reality but within the context of the rules and our discussion)
* Ofcourse 3M does a lot of things to overcome those shortcomings. But your firm using those Simple Rules copied
from 3M will not be able to overcome those shortcomings and strategic sub-optimalities.
* Exercise: Now its upto you to see how these simple rules need to be modified in 3 Application Scenarios mentioned
in the previous slide.

12. *
Aditya!!!