/ Mediocre Management

The Analyst

To lean on an over-used (and scientifically-debunked) metaphor: each business has a left and right brain. It is half science and half art, half quantitative and half qualitative, half corporate entity and half tribe of people.

One half can be boiled down to a set of metrics: cost per acquisition, customer lifetime value, revenue, gross margin, net income, and so on. Those metrics can be represented in spreadsheets, and it's easy to get lost in those spreadsheets. It's easy to fall into the misconception that a business is no more than the spreadsheets that record and project its metrics. It's easy to bury yourself so deep in the numbers that you lose sight of the other half of building a business: vision and culture.

Some might argue that you don't need vision or culture. That as long as you optimize for shareholder value, you'll build a great company. But teams are not motivated by shareholder value. Tribes do not rally around shareholder value. The metrics will indicate, in unequivocal terms, whether your business is thriving or flailing, but they won't inspire your team to solve the seemingly intractable, or to keep fighting when the odds are slimming. Peter Drucker said "Culture eats strategy for breakfast", but no spreadsheet can reflect your cultural values. Most importantly, spreadsheets aren't creative. They can't illuminate new paths or challenge your assumptions.

The Analyst forgets that a business is more than the sum of its metrics, and so they fall short of motivating, orienting, and retaining world-class talent.


The Good Tendencies

The Analyst tends to be risk-averse. They favor insight over impulse. Their team is not subject to the daily whims or whiplash of a chaotic agenda. Even if the ship is floating towards a waterfall, the Analyst will strive to calculate just how fast the river is flowing, and just how far the water will fall. Because to tack away from the waterfall or, god forbid, turn the ship around and head back upstream is a last resort the Analyst is loathe to propose.

The result is a culture of calm. Some workplaces are plagued by arbitrary prioritization: "the boss wants us to tackle this new project by Friday, so we'll have to work late tonight. Not sure why its so important all of the sudden, but let's get it done!" The Analyst rarely subjects her team to a last minute hustle. Every initiative has a clear strategic purpose and preordained timeline. The cadence of her team's work is steady - they do not "hurry up and wait". This engenders trust and calcifies strategy. The team understands how each project ties to the organization's goals, and respect for their Analyst leader is not eroded by a daily tide of cavalier objectives.

The other obvious benefit of charting a course thoughtfully is that the Analyst is likely to pick the right North Star, while a more impulsive leader might orient the team towards some other shiny object in the sky. There is nothing more powerful than a team, oriented towards a clear and dazzling North Star, marching through the night with no distractions on the horizon. Of course, the fundamental assumption here is that the Analyst has sufficient data (and data-processing capacity) to find the Star and set the strategy. That is not always a safe assumption.

Let's set aside the case in which a team's data-processing capacity is insufficient, as that is a tactical problem (hire a data scientist!). There's a meta strategic question that is often overlooked, especially by the Analyst: is there a decision point here, and can we make it with data?

The Analyst tends to assume that all critical decisions show up on their doorstep, complete with the necessary data. When you have a hammer, everything looks like a nail, and the Analyst's hammer is a spreadsheet. But sometimes the most critical decisions are not even on anyone's explicit agenda, and there is at least one category of decision that necessitates blind impulse, where analysis paralysis can be fatal. This is where the Analyst stumbles.


The Mediocre Tendencies

Imagine the landscape of solutions as a 3-dimensional space (in reality it's probably more dimensions than that, but I can't wrap my head around dimensions greater than 3, so let's stick with 3). There are lots of different sized hills, and maybe some mountains. The tallest of these is the best solution.

For example, if your company wants to fight physical pain, one of the tallest mountains will be Ibuprofen, another will be Acetaminophen, another will be Acupuncture, and there will be a little, tiny hill way off to the side that is Snake Oil.

If your team is climbing Snake Oil hill, the "local maximum" is the peak of Snake Oil hill: the very best Snake Oil solution on the market. The Analyst is great at leading their team to the peak of the hill that they are currently climbing, and finding the local maximum:

  • They analyze the data: "All of our customers are saying this Snake Oil tastes like snakes!"
  • They derive objectives: "Let's add some more sugar to make it taste less like snakes."
  • They measure results: "Now the customers say it tastes like sugary snakes! Back to the drawing board."

Eventually, with diligent iteration, they'll find one of the local maxima.

The problem, of course, is you're still selling Snake Oil. Sometimes the best thing for your business is to hike down from the hill you're on, traverse the landscape of solutions, find a taller mountain, and start climbing that. That's finding the "global maximum", and it is where the Analyst falls short.

The Analyst has risk-aversion blinders that obscure this type of decision from their view, in part because it will rarely be presented to them by their team. "Should we throw away everything we know and start over?" is not a question asked often. The Analyst sometimes lacks the vision to see nearby mountains, and even if they conclude that the team might be hiking the wrong hill, they simply don't have enough data to make a data-driven decision. "How do we get down from here? We've only ever hiked upward! What do we do once we get to the bottom? Where is the tallest mountain?" Often there is no relevant data to answer these questions. When the leader does not have a map, sometimes the only thing to do is start hiking in a new direction. That is anathema to the Analyst.

It's rare to iterate your way to an inflection point. This is especially pertinent for businesses that have not yet found product-market fit. You have a solution on the market, but you don't yet have customers knocking down your door asking to give you money. Is it because you're still near the base of your hill, and as long as your team keeps hiking the customers will come? Or is it because you're hiking the wrong hill entirely, and missing the nearby mountain with the best view? The answer is rarely obvious or objective.

There are two phases to any problem-solving initiative. Frustratingly, they require the exact opposite perspective and skill-set. The first is throwing spaghetti at a wall: come up with as many potential solutions as you can ("No ideas are bad!") and throw them all at the wall. This phase requires creativity and an open mind to chaos. But as soon as one of the ideas sticks, the phase is finished. The second phase is doubling down on that solution and seeing it through. The second phase requires focus, discipline, and analysis. The most important analysis, of course, is determining when to toggle between the two phases. The Analyst thrives in the second phase, but sometimes misses a critical opportunity to revert back to phase one, and falters when faced with flying spaghetti.

Often the biggest risk is not taking enough risks, not turning back when a waterfall is on the horizon, or never hiking down from Snake Oil hill. The Analyst is uniquely susceptible to this paradoxical risk-aversion-risk, not only because they are risk-averse, but because the decision to turn around is often hard to justify with numbers alone. This is where art supersedes science. The leader must have conviction in their vision, and the cultural aptitude to inspire a team, even when no quantitative analysis can prove the new path is right.

Are you an Analyst?

The best Analysts have mastered self-analysis. So if you're an Analyst, you probably already know. You're risk-averse. You love crunching numbers. You're curious. You like talking things through and thinking critically.

The more important diagnostic is: "Are you on Snake Oil hill?"

The answer is deceptively simple: your team already knows. When you're hiking towards the global maximum, your team will highlight tactical, operational scaling challenges: "What do we do about all these support tickets? How are we going to build 60 widgets next month?"

But when you're hiking Snake Oil hill, the team will surface far more strategic questions: "How do we motivate customers to use our product? How do we stop Sales from selling something we can't deliver?" If you're an Analyst, your instinct might be to dive into these strategic questions and come up with strategic solutions. You might be inclined to architect ever more elaborate product packages and sales compensation plans, intended to corral customers and align internal resources. Fight that temptation. Instead ask yourself "Why is the team asking these questions?" If they are asking questions because you're scaling too fast then keep marching, you're onto something! But if they are asking questions because of fundamental misalignments, it's possible you're on Snake Oil hill, and the right answer is to a question that no one is asking: "Should we throw it all away and start over?"

What to Do if You're an Analyst

As with all the other Mediocre Management archetypes, it is critical to balance your mediocre tendencies by hiring a team that will challenge you. Don't build a team of Analysts, hire at least one crazy, impulsive person who will prod you to action. The Visionary is probably a good counterpart!

But you can also leverage your own strengths. You are organized and process-oriented. Build a lightweight process for impulsive thinking. Set aside a few hours every month to come up with questions you wouldn't dare ask out loud, and give them a little daylight. Ponder questions like: "What would our business look like if we threw away one product line? Are we systematically over-invested in one function of our business? If I had to let one member of the executive team go, what would the impact be?" These are tough questions that occur more naturally to an impulsive leader. You may come up with 5 of them each month, spend an hour on each, and decide to ignore all of them. That's okay. The mere exercise in stretching your impulsive thinking muscle is worth the effort, and may someday save your business when you find yourself halfway up the wrong hill.

Still reading? The Technocrat likes digging through the weeds just as much as the Analyst does.

Cover Photo by Nick Hillier on Unsplash