Q & A on Zone to Win

One of the fun things about blogging and writing is that you get pinged from time to time with real-world challenges to your perfectly elegant PowerPoint! Here is a recent exchange which helped me clarify my thinking on applying Zone to Win principles to a couple of commonly seen issues.

Hi Geoff!

I recently read "Zone to win" and felt that the Zones model explains a lot of the dynamics I see in the industry and also at some points in my own company. I want to share the model with my managers and explore it further but before I do I have two questions which I hoped you could help me with:

1. For the performance zone you emphasize joint accountability of both sales & product in the matrix ("cell level"). Did you ever hear an objection based on the fact that product effects are delayed and therefore cannot be used for accountability for "this quarter"?

Bookings clearly precede revenues, often by quite a time lag. Although both get reported quarterly, they are, as you note, measuring different performances. For the performance matrix, you should focus first and foremost on bookings, the sales metric, but you still want to make both product owners and sales owners jointly accountable for this outcome. If you make only sales accountable, they will make the number based on the set of products that is easiest to sell, and your up-and-coming product lines will not get the attention they need. If you let product owners off the hook, they will blame sales for not selling properly when often lack of sales is a signal of something missing or problematic in the product. By making both teams accountable for both metrics you stop the finger-pointing and get directly to the problem-solving.

2. For the incubation zone, we need the incubation units to be isolated from the "weight" of the large enterprise. Do you have any tips on how this can be done effectively?

The whole purpose of the Incubation Zone organizational model is to achieve this end. First, you do not fund the units during the annual planning process—you just fund the zone. That prevents the nickel-diming that under-funds next-generation innovation. Once the zone is funded, the board that manages the zone governs all incubation efforts within it, funding them to milestones, releasing additional funding only when milestones have been achieved. All this works like a venture capital model, with no input or oversight from either the Performance Zone or the Productivity Zone. If either of these two zones gets to have a say, the incubated efforts will not hold up under that pressure.

3. I was wondering if you have any "real life" tips about dealing with the "compliance" aspects in the incubation zone (potential issues I am thinking about are overheads of formal financial reporting, legal approvals, access to shared resources like the company's web site, etc. - you probably know about other common ones...). 

Part of the Incubation Zone organizational model is a set of liaison roles that mediate between the various start-up efforts and the Productivity Zone functions of Legal, HR, and Finance. The goal of these roles is to protect the start-ups from burdensome process demands while at the same time ensuring the enterprise does not violate its core values. Examples include unusual contract terms and conditions that would normally be rejected by Legal, compensation packages for exceptional recruits that are way out of band for HR, and J-curve financial metrics that are out of band for Finance. In all three cases, the Incubation Board has governance responsibility for whatever actions are taken, and the liaison roles do their best to ease the tensions that inevitably arise.

If you have an interest in Zone to Win and some practical issues you think need clarifying, please ping me here on LinkedIn. Nothing an author likes better than to hold forth on his favorite subject!

That’s what I think. What do you think?

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