Create Optionality Now: Interview with Author Alan Amling
I recently went one on one with Alan Amling. Alan helped drive innovation over a 27-year career with UPS and is currently a Distinguished Fellow at The University of Tennessee and CEO of advisory firm Thrive and Advance LLC. Alan is also the author of the new book is Organizational Velocity.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks or challenges have been most instrumental to your growth?
Alan: I spent 27 years at UPS in various marketing, strategy, and venture capital leadership roles. I was “pushing the envelope” in all of these positions, looking for better ways and new frontiers. However, change was not always welcome at a company that prizes consistency. Innovators at most large, established organizations can relate to this.
The challenge is not in process improvement, doing what you do today better, quicker, cheaper, but in creating new revenue streams. Put another way; it’s not about sharpening the knife, it’s about creating new knives.
I certainly had my share of setbacks and Dilbert experiences trying to create new knives at UPS. Yet, I don’t consider them failures. Setbacks are only failures if you don’t learn from them and use those learnings to propel your next steps.
My setbacks motivated the journey I’m on now. I found it both interesting and frustrating that the Fortune 500 continued to turn over at a faster and faster pace. Why? After all the books, seminars, and high-profile examples of disruption, why haven’t large corporations cracked the code on longevity? This question drove me back to school at the age of 52 to find answers.
I had the great honor of having the Father of Disruptive Innovation, Clayton Christensen, on my dissertation committee as I explored these questions. Clay said in one of our early conversations, “Alan, you need to realize that God didn’t create data. It would be of great service if you could teach other executives that the greatest source of their future success is the data that has not been created yet.” I was initially taken aback by this challenge. Data that has not been created yet?
I began to think deeply about the multi-year plans I had produced over the years, and I realized my folly. As soon as the first initiative in the first year was launched, it would trigger a series of responses from the external environment that I had no control over. At that point, data that had not been created before our action was taken would determine which steps to take next.
While long-term planning is essential, executives need to realize that “the greatest source of their future success is the data that has not been created yet.” Interviewing dozens of corporate, startup, and military leaders to understand how they make decisions (or not) under conditions of uncertainty led me to an epiphany, “Moving at the speed of change is a choice, not a circumstance.” My new book, Organizational Velocity, is a summation of all I’ve learned about the hidden friction holding back organizations and what they can do to thrive in disruption.
Adam: What do you hope readers take away from your new book?
Alan: Disruption is not a death sentence, it’s just change. Large organizations can move with speed and agility; they just need to manage the hidden friction that builds up as organizations grow and try to control their “bigness.” My hope is that readers use Organizational Velocity as a guidebook, dog-earing pages that help them deal with their current challenges, whether that’s uncovering and eliminating organizational friction, driving transformational change as a senior leader, or working with the Board as a strategic resource vs. a tactical checkbox.
I read business books to solve problems, not be entertained. I had that in mind when writing Organizational Velocity. Leaders can review the insights, which I call Truth Bombs and Gold Nuggets, and then go to the section of the book where that insight came from. And at the end of every chapter is a summary of the what, so what, and what now.
Adam: In your experience, what are the key steps to growing and scaling your business?
Alan: Most corporations are set up to plan and act, not sense and respond. They play defense, talking about sustainable competitive advantage and “creating moats” around their offerings through cost leadership or differentiation. Today, however, competing firms can cross those moats with increasing ease. There is no sustainable advantage, only persistent advantage, which is cyclical, ongoing, and demands that leaders act amidst uncertainty.
Organizations need to go on offense. Let me tell you a quick story. At the end of World War II, the U.S. captured several German generals, and some of the U.S. military’s current strategies can be traced to interviews with those German generals. One of them was Hermann Balck, who led the 11th Panzer Division. Balck was known for nearly wiping out the Soviet Fifth Tank Army in a few weeks, even though he was outnumbered in infantry 11 to 1 and tanks by 7 to 1. When asked how he succeeded, he said, “Go on offense. We never relented. We attack, attack, attack, attack, attack.”
Balck explained that people have the misperception that it’s safer to play defense than go on offense. They mistakenly think there will be more casualties going on the attack than trying to defend. There’s nothing more immobilizing for established firms than the frightening uncertainty of going on offense.
There are no moats that can’t be crossed. Sustainable competitive advantage is a concept that needs to be sent back to the 1980s with mullets and parachute pants. Today, companies need to create persistent advantage, continually creating new capabilities and value propositions.
Adam: What do you believe are the defining qualities of an effective leader?
Alan: This one may surprise you, but the defining quality of an effective leader is humility. The decision to do the same thing repeatedly originates from intelligent people who have made so many good decisions that they have lost their ability to be humble. They don’t think to ask, “Has this good decision gone bad?” Executives tend to stick with what has worked, and their worldview is rarely challenged. Although, ironically, they are often not reflective or courageous enough to ask the hard questions, take risks, and court failure, they come across as confident and visionary. One senior leader put this in perspective, telling me executives can be too smart and therefore sleepwalk themselves into becoming irrelevant over time.
The Disruptor Trifecta is another leadership concept that jumped off the pages as I looked over hundreds of interview transcripts. Every business is a technology business in this world where my refrigerator sends me a monthly text with performance information. Most leaders of large organizations are intelligent and possess exceptional industry knowledge. However, many are missing the third requirement for success in today’s digital world: technology fluency. Too often, though, “tech fluency” is missing and designated to a “tech team.” Without tech fluency, leaders are blinded to digitally-enabled alternatives, leading to a death march of sub-optimal decisions. The concept of tech fluency is not about senior executives knowing how to code machine learning algorithms. However, emerging technology must be understood at more than a superficial level.
I saw the Disruptor Trifecta play out when I led UPS Ventures and evaluated startups. They were typically smart with strong tech fluency but didn’t understand the logistics industry well. They failed too.
Too often, the real issue is pride. Leadership doesn’t want to look foolish, ask questions, or look less than “all-knowing.” Getting back to the first point, leaders must be humble and become an example of continuous learning for their people.
Adam: How can leaders and aspiring leaders take their leadership skills to the next level?
Next-level leadership requires people that are comfortable being uncomfortable. You have to be driven by a larger purpose than profits to sustain you when times get tough…which they always do at some point. If challenging the status quo makes you uncomfortable, then strive to be the best manager you can be. If you want to be a next-level leader, you’ll need to shake up the snow globe.
Adam: What are your three best tips applicable to entrepreneurs, executives and civic leaders?
Alan: Here are three solid tips that apply to leaders of any size organization.
1) Uncover and eliminate double-talk.
This double-talk is typically unintentional. For example, it’s popular for leaders to espouse that they are a data-driven organization. However, that may not be the experience of a frontline manager who needs specific information to do their job and finds that it’s siloed and permission-based. You must submit your query to a data analysis group.
Another popular theme among executives is “fail fast.” Corporate leaders love to talk about “failing fast”, but you see what the leader is made of when somebody actually fails. In some companies, a rising leader may not be able to recover from a failure…and don’t kid yourself; corporate memories are long. Great organizations maximize their return on failure.
I love the example Elon Musk set on December 9, 2020 when SpaceX’s prototype Starship rocket exploded on impact as it attempted to land. The $200 million uncrewed rocket was gone in a flash. Instead of lamenting the explosion or making excuses, SpaceX CEO Elon Musk gushed with enthusiasm over the test results. In a Tweet, he spoke of the “Successful ascent, switchover to header tanks and precise flap control to landing point!” After bulleting what they had learned from the catastrophic landing, Musk Tweeted, “Congrats, SpaceX team, hell yeah!”
That is the mindset of an OV leader! For Musk, the Starship crash was not a failure. What they learned would instruct their next attempt. More importantly, he made sure the team put their heart and souls into this prototype and came away with a sense of accomplishment that would motivate them to keep trying until they got it right. It was a small thing, but it made all the difference to the team. Laying into the team on Twitter would have thrown sand in the gears of OV. Instead, Musk bathed the gears in oil. 9 months later SpaceX launched Inspiration4, the first crewed orbital mission with no professional astronauts on Board circled the earth for three days before splashing down off the Florida coast.
2) Create optionality now.
Organizational velocity is built off options. Based on the firm’s observations of the external environment, you decide what’s potentially material to your business and create options that allow the organization to pivot quickly.
Running pilot programs or tapping into employee expertise through exercises like Design Thinking can create critical knowledge capital. Essential learnings translated into options in the form of employee capability-building, collaborative relationships, advanced technology solutions, and supplier/customer diversification, to name a few.
3) Whatever you do, have conviction in it.
Ben Baldanza joined Spirit Airlines the year after the fledgling carrier lost $80 million. Spirit needed a dramatic overhaul, and Baldanza brought it when he was promoted to CEO in 2006. Five years later, Spirit earned 40% more per airplane than any other U.S. Airline. The public saw a tradeoff between super low fares and packed flights (with one less lavatory to allow for more seats), high baggage fees, and extra charges for everything from boarding passes to peanuts. Business passengers fled, but leisure travelers flocked to the airline. Spirit now had an identity. It knew what it was and, just as importantly, what it wasn’t.
Baldanza used to joke that he would someday walk into a Chick-fil-A and scream, “What do you mean you don’t sell hamburgers here!” Ben would say that Spirit had very clear mirrors in their building, meaning they knew who we were and who we weren’t. Spirit’s conviction to economic efficiency permeated every corner of the organization.
Baldanza had executives cover the cost of their business cards through sponsorships by local businesses featured on the flip side of each person’s business card. For example, Ben had Joe’s Pizza and Pasta sponsor his business cards.
He even developed corporate partnerships to cover the costs of special building projects. Spirit boasted an Airbus room, a Pratt and Whitney room, and a Lufthansa boardroom. This conviction had a stunning impact. As vendors tried to squeeze him in negotiations, he would refer to his business card: “If I won’t pay for my business cards, what makes you think I’ll pay for your increase?” Ben’s conviction about who they were and what they were about changed the whole company.
Adam: What is your best advice on building, leading and managing teams? Adam: What is the single best piece of advice you have ever received?
Alan: The troops take their queue on how to behave by observing what their leaders do, not just what they say. Your reaction to a bold suggestion by a subordinate in a meeting or to an innovative project that did not go as planned will speak volumes. Give your employees the permission and guidance to find new ways to deliver value.
Adam: Is there anything else you would like to share?
Alan: Separate decisions into reversible and irreversible. For reversible decisions, don’t analyze them to death. Instead, act, learn and iterate. For irreversible decisions that will be difficult or impossible to unwind, such as selling a business unit or having a child, follow the golden rule “if you don’t know, you know.”
Adam Mendler is the CEO of The Veloz Group, where he co-founded and oversees ventures across a wide variety of industries. Adam is also the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal winning athletes, political and military leaders - for intimate half-hour conversations each week. Adam has written extensively on leadership, management, entrepreneurship, marketing and sales, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities and non-profit organizations.
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