Dealing with Legacy

No organization fancies legacy thinking for obvious reasons. It holds the organization back on assumptions that no longer apply and aren't the right basis for making decisions. The consequences can easily be failed plans or results that fall short. It often explains why some companies are spinning in place, while others are building momentum.

Let's take an example.

It was accurate, say in 2000, to say no one will use a phone to buy a burger. 

But to say that in 2013 (when I joined McDonald's) would be incorrect due to the rise of the iPhone and the app store. 

Fortunately, myself and the CEO's I worked with saw that reality and paved a way for the company to get ahead of digitization even though many questioned it.

So what is legacy thinking, to be precise? 

Legacy thinking is thoughts and beliefs that are no longer accurate, even though they may have been in the past. 

If institutional thinking in your organization is past expiration date, it's legacy. 

If the institutional thinking in your organization is past expiration date, it's legacy. If that thinking is updated and fresh, you're not operating under legacy. That's good. But there's an even better position to be in.  

It's even better if your organization's understanding is one or two steps ahead of what's current, aligned to the higher purpose of the business and supported by a roadmap of exploration. This is the domain of intellectual capital.  

It's my belief that creating intellectual capital is the most rewarding feature of employee-employer relationships. 

Without that, all the other aspects of work—brand recognition, scale, personal recognition, stability, even compensation—can get stale. 

In other words, you as the employee will get stale. More on that some other time.

So there you have it. It's a huge range of alternatives. Some companies are generating new intellectual capital each day, while others are spinning in circles. Which one do you think are the most coveted places to work? 

Tools for Change

But legacy thinking is still rampant in organizations, and we need a way to overcome it. The framework below may be a tool to constructively address it.

To start with, it's useful to collect the most common and relevant underlying thoughts of the organization.  

Take the imaginary example of someone trying to convince a big car company to make and sell electric cars. If you're in 2015 and Tesla has has hit 50K units sold, they are celebrating the milestone, while incumbents producing 3mm luxury cars per year are still dismissing it.  

If you're in 2015 and Tesla has has hit 50K units sold, they are celebrating the milestone, while incumbents producing 3mm luxury cars are still dismissing it.  

Some of the reactionary thoughts of the organization might include: 1) mainstream customers don't care about electric, 2) the mileage range of such cars would make them unappealing for many customers, 3) the breaking and driving experience would be too much of an adjustment, or 4) the hassle of charging outside the home would be barrier of purchase.

Now let's take those beliefs and reframe as questions. Instead of sticking with the assumption that the miles you can travel on a single charge would be a deal killer, we begin to ask questions: 1) What's the length of the average daily commute? 2) How many commutes can you get in on a single charge? 3) How available are charging stations on common long distance trips in major metros? 4) How convenient is it to find and plan ahead for charging on such longer trips?

Armed with this, there are always input sources to go learn things. And as we gather inputs, we can determine if the original thoughts still apply or should be updated. We have some objective or logic behind validating our thoughts or updating them.

Of course for Tesla, getting ahead of these questions is a matter of continued survival in 2015. That's why upstarts spend all of their energies there, skipping the legacy.

Reflections for Incumbents

For incumbents, it's easy to kick the can down the road. 

Often the consequences don't show up for many years. That's why a company can be around far longer than it's relevant. 

Within incumbents, the predominance of execution culture can pull focus away from getting the inputs and addressing the questions. 

And that leaves us little objective information and reasoning to make important decisions. Companies can be stuck debating legacy thinking and alternative points of view within the enterprise. This is not a great dynamic for collaboration and culture, so we need a better way to set direction for the company and bring people together.  

A better way is to embrace the idea that learning is essential to keep a company relevant. It's time well spent to pick areas that are relevant to your company's north star (in McDonald's case it was to "own convenience" which is obviously centered on digitization) and address the open questions or even the elephants in the room. 

Short changing this, is short changing the company's future.

Another other business (AOB)

I've been reading Life Profitability which challenges the Entrepreneurial Archetype (how you operate as an entrepreneur or someone starting a company), and leave you with this quote:

The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.

—Henry David Thoreau, Walden