Book Depository: The Grid

The first edition of Matt Watkinson’s book hasn’t been out for long. In this review, I’m deliberately not giving away much away about the model, although you can get more information from his site. The book’s worth a read, though: I’d recommend you find a copy if you’re interested in knowing more.

Spare a thought for managers. After being assailed by the seven habits of highly effective people, they’ve had to learn the five dysfunctions of a team, and how to wear the six thinking hats. They’ve sat exams on the thirty-odd rules for winning friends and influencing people. And that’s before they’ve reached the maze of psychometric systems. Whenever an occupational psychologist or PPE graduate from The Guardian tosses a fresh paperback into the fray, off tramps the executive team to a Home Counties barn to hear all about today’s mnemonic. Management, too, must have its fads.

Those books I flippantly cited share a perspective on how to come together as fallible, sensitive human beings, to engage with emotion but not to be controlled by it, and to cooperate. So much is written about this because ego-driven organisms need constant reminding. What we haven’t yet had, but we desperately need, is a self-consistent guide to untangling the collective insights we contribute into a coherent strategy that is explainable, defensible, and good for our business. The cognitive load of business decisions is enormous. Most people retreat to their own specialisms under such pressure, but this is dangerous: decisions have consequences that affect organisations in ways that we continually fail to anticipate. There are well-trodden books on this pathology in other arenas of endeavour: The Checklist Manifesto, Thinking Fast and Slow, and so on, but the favourite best practices in surgery and aviation are a decade or two ahead of most management skill.

The Grid (uppercase ‘G’ for the title; lowercase ‘g’ for the tool) is an attempt to address this problem. It presents a system for thinking about the business as a whole when making choices. The exposition of the grid is interwoven with real cautionary tales, where complacency or poor groundwork by well-regarded leaders resulted in expensive, high-profile cock-ups. There are also positive lessons: tales of clever but difficult manoeuvring saving companies from disaster. Versions of these stories exist for businesses of every size and kind: the ones in this book tend to be very recent (the bones of Edsel can rest in peace), but it’s clear that failures can be post-rationalised back to the dawn of time. What matters is anticipating them before it’s too late.

Part checklist, part canvas, the grid looks almost too simple. On one axis are the three parties that a decision will affect: customers, the market (in this case, other companies such as rivals, distributors, and suppliers), and the organisation itself. On the other axis are the three categories by which the viability of a business is measured: its desirability, profitability, and longevity. The nine pigeonholes where the categories intersect are the grid, which is all that you need to consider. Each pigeonhole contains a checklist of three items. That’s twenty-seven things in total — a lot to remember, but the idea is that this data is organised. You start in one position in the fully-formed grid, and dance around it until you’ve looked at a decision in terms of every relevant part of the business it could affect. You mark the things that might be problems in red, and work out what to do about them, gradually minimising the amount of red ink until it’s small enough to deal with.

It’s really that simple. Well, almost: the book is nearly 300 pages long, and most of this is commentary about what is meant by the subheadings in each pigeonhole, and how to understand them. These ‘deep dive’ pages concern the clarifications, footnotes, anecdotes, and lessons. They furnish breezy tutorials of the accounting, marketing, and product-related terminology for those who aren’t already generalists. This was clearly a difficult but necessary courtesy: it’s one thing to say ‘look after capital expenditure’ (which Matt does: it sits in the space where ‘organisation’ meets ‘profitability’). It’s of limited use, though, until you’ve satisfactorily explained to an autodidactic marketer what capital expenditure is, and why a company’s books are balanced in the way they are. Matt does this adeptly.

Where some of this material is simplified to the point of absurdity, the author confesses that his cavalier examples are dumb for the purposes of brevity, and then cuts straight to the point. He has enough respect for the subject and the reader to judge this trick about well enough. The examples are well-referenced, and written in the snappy journalistic style familiar to readers of modern management books. While the synonyms for ‘company’ wear occasionally thin, Matt steers just the correct side of Jeffrey Archer when describing a business once again as an ‘icon’, ‘phenomenon’, even ‘behemoth’. However, that I’m judging a management book by its cover-to-cover readability means that he’s already pushing standards that these books rarely set for themselves. Matt’s joy for his subject and his humorous, knowing flourishes impart a refreshing charisma and self-awareness that seldom coexist in much of this literature. His occasional bitchy parentheses are a delight.

The genius of the grid, as with any explanatory system, is its method of abstraction. The effort it took Matt to concoct the grid is explicit in the introduction, and implicit elsewhere. Twenty-seven headings are all you need. That it doesn’t matter that these tabulated things are, in reality, nested, interrelated, recursive, fly out of their pigeonholes, sit behind other things, obscure one another from time to time, and cannot always be fully characterised or understood in a real enterprise, is stated but doesn’t always matter. The central tenet of this book is that all the horrendous complexity of a business decision can be laid upon the grid like a spatchcock chicken, visible at once holistically and reductively. At first, this seems extraordinary and magical. It’s so far withstood my whataboutery, and there is no shortage of better-placed people queueing up to tug at its threads, so we’ll soon learn if anything is misplaced or omitted. I’ve printed out the twenty-seven headings and stuck them on the inside cover of my workbook as an aide memoire, and I’ve never done this with a management manual before. The Grid deserves repeated attempts to attack it. It will get them, and has a good chance of prevailing.

What’s less good about this book? It’s hard to fault its research even in my own area, but specialism is what your company will need. Without trustworthy domain experience, you can’t check the information you put into the grid. You might not otherwise know whether to write on it in red ink, green ink, or no ink at all.

The section on legal compliance, for example, is where an expert can add light and shade. Yes, larger firms have specialist teams that make the demands of meeting a territory’s rules part of their fixed costs; yes, they can even negotiate sweetheart deals with governments if they’re powerful enough both to broker them and to weather the backlash that follows. At the other end of the scale — something Matt doesn’t mention — obscurity is also a strength.

Once upon a time, I was working for a company whose rivals were hit simultaneously by multi-million dollar fines by the FCC for a first offence of mislabelling products. We were too small, and our infractions too minor, for them to care. A company will often evade a regulator’s radar until they are big enough. Compliant and appealing product packaging and labelling are actually very hard for any company to nail. There’s no point in a regulator litigating an upstart into the dust, unless they’re posing a danger to life and limb, the native economy is threatened, or they’re so flush that it’ll make a decent difference to the exchequer. Perhaps it’s in bad taste to publish the advice that laws apply mostly to those in the middle, but it’s been said in print before, and needn’t be seen as a problem. My industry supports hundreds of home-build enthusiasts selling their own little electronic music toys outside product law, because their margins and costs afford no other way of working. The grey market is where innovation often starts, and where tomorrow’s legitimate CEOs come from. If our governments shut down these operations, cultural movements and would-be entrepreneurs would disappear forever. It’s all data that fits the grid, but you still need the right person at the table to hand you the correct colour of felt tip.

Where he’s on his own turf, Matt writes most persuasively and fluently. There are some beautiful set pieces, such as the discussion of power play at the start of the ‘bargaining power’ chapter. His coda on the relationship between running a business and learning to surf assimilates a personal passion without seeming at all indulgent. And now I know that Windows 8’s breaking of the ‘Start’ button is called a strong habit intrusion, I’m going to be using that term every time I see an example of it, until designers scream at me to stop.

My wife, one of the best hole-pickers I’ve ever met, points out a limitation of the grid over untidier table-based systems such as the Business Model Canvas, or the upstart Lean Canvas variant: the grid is a best fit for incremental business decisions, where you understand your position, and can trust your data. Shall we make this product, or that product? Shall we spend on a campaign, or an acquisition? What needs to be in place this year, and who do we need to watch? If your tenure begins, as many do, with a shaky foundation: building a tech company from scratch, merging two disparate organisations, or fixing an old-school enterprise that hasn’t made a profit in a decade, the grid might be too granular, and not the first resort. Otherwise, you’d quickly be overwhelmed with dubious data unless you switched either to intuition, seeing the problem as one requiring a visionary backed up by strong discipline, or by going back to first principles and redrawing the company around the scraps that already function. Only then would the grid make its outing, to confirm the robustness of your next steps.

All this considered, the only thing that’s wrong with The Grid is what’s missing on purpose. As Matt explains at the beginning, the grid determines how you turn information into a decision: not how to read the data, or how to carry out the plans you make. What you don’t find in the book are thorough treatments of technology strategy or culture, although the stories are there. It doesn’t account for the role of visionaries in your business; the art of persuasion, compromise, and execution; how to communicate a plan to subordinates; the extent to which change in an older company is limited to what politics and culture will permit. The danger with this book, then, is that its readership will be those who pick it up because they have a desire to embrace complexity and follow the evidence. They’ll love this book as I have, will grow from its lessons, and may run brilliant businesses of their own but, with the ability to learn and assimilate, they might not have needed the grid. The cautionary tales that The Grid retells are mostly the consequences of hubris, which no amount of analysis will ever avoid. If the information your company needs is purposely ignored or suppressed; if your power structures were set up so that feel beats fact; if the people who would check your excesses are locked out of the boardroom because they bear inconvenient news, then The Grid won’t help you, and neither will anything else. For the rest of us, it’s a refreshing, authoritative manual for business design, and the most comprehensive planning tool of the many I’ve seen.

(In case you missed it, the Amazon link is here.)

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