An Interview with “Detonate” Author Steven Goldbach, Deloitte’s Chief Strategy Officer

Steven Goldbach is a principal and Chief Strategy Officer (CSO) at Deloitte US, and the coauthor of Detonate: Why and How Corporations Must Blow Up Best Practices and Bring a Beginner's Mind to Survive (co-authored with Geoff Tuff). At Deloitte US, Goldbach helps executives and their teams transform their organizations by making challenging and pragmatic strategy choices in the face of market uncertainty, which is also the focus of his new book. The NCMM caught up with Goldbach to discuss how middle market companies might build better, more sustainable strategies for future growth.

What impact might the size of company, whether it's a startup, a huge enterprise, or a middle market company, have on applying the insights you describe in “Detonate”?

Goldbach: Once a company exits the startup phase, it starts putting larger systems and processes into place. Its more likely that it’ll start experiencing what we describe in the book: it becomes much more difficult to change over time and these companies become ossified in what they do and how they do it. This is also true in middle market companies and larger organizations. Obviously the scale of the processes and systems in place might be different in each organization, but the challenge of changing in the face of technological disruption tends to be a similar one.

What do you see as “wrong” with best practices?

Goldbach: If best practices are used by everyone, then by definition those best practices become average. Our supposition is that no company is going to be a great company by the pervasive use of best practices. What also happens is that best practices tend to get stale over time as the world shifts and changes, rendering those practices obsolete. What we wanted to accomplish with Detonate is to give business leaders a way to spot those parts of their organization that have become stale in the face of all the changes in the world, and give them a way to go back to the first principles of business, to figure out where and how they should adjust what they’re doing.

So how can middle market leaders look around their companies and discover the “stale orthodoxies and investigate whether they should be eliminated or detonated?

Goldbach: It comes down to asking a basic question, “Why do we do thisYou know you've got an orthodoxy if the answer is some variation of, well, that's just the way we've always done it here or that's the way it's done in our industry. When you get an answer like that, you need to start investigating whether the practice is helping make a difference between winning and losing against your competition. Is the practice going to cause our customers to choose us over our competitors? If not, you can detonate it and start thinking anew.

Could you explain the four principles of “Detonate”?

Goldbach: We don’t offer another playbook, what we offer instead are principles that should help companies think differently about how to beat their competition in the marketplace. The four principles are: first, always focus on human behavior and in particular that of your customers. What would be the motivation for a prospective customer to change their behavior in some way that would advantage you? Focus on changing behavior. Second, bring a beginner's mind to your business. The more you become an expert in something, the less likely you’ll be to see different possibilities that exist. The logic for that is simplethe world is rapidly changing around us, whether it's from technology or the way prospective customers are behaving, and you've got to be challenging your assumptions, constantly unlearning things and figuring out how to serve customers better.

Third, you have to be able to trial more things, and do so in a way that gets you lessons at a relatively small cost. Think “lean startup” methodologies and minimally-viable products/ideas. Don't risk the company every time you try something new. The last principle, is that you have to be willing to discard things that once were very good, but are just no longer working. Embrace change and impermanence as a constant reality of today’s business landscape.

What kind of failures are good failures and what kind of failures are bad” ones?

Goldbach: A bad failure is a bet that’s far larger than it needs to be in order to test thevalidity of the concept you have. There's an example from a middle market company that I once worked at. We made a really big bet on something called the CueCata device that could scan a barcode in a magazine that would then take you to the webpage associated with the product. This was done back at a much more nascent stage of the Internet, and itwas a really important concept to test. What we did was send the CueCat to every single one of our one million subscribers. It was a really expensive way to find out whether or not we could cause the behavior of people to change, to test the concept. In the end, subscribers didn’t use the CueCat. But we could have sent it to 30 subscribers, and gotten the same lesson learned at a much, much lower cost. That was a “bad” failure.

What else would you like to add or tell middle market company leaders about this detonate process you describe?

Goldbach: The question we often get asked by business leaders is where do I start? The best place to start for senior executives in middle market organizations is to realize the power of their questions. To drive change quicklyjust start asking different questions. Better question might behow could we test this idea? What's the customer behavior we're betting on hereEmbrace the uncertainty of the process, and ask “how can we learn more at low cost? You still need a vision, yes, but it's about being agile enough to say I'm learning from what I'm doing and I'm not the Titanic just moving forward slowly, unable to turn in the face of danger in the future.

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