Frances Frei

And I'm your co-host, Frances Fry.

I'm a Harvard Business School professor, and I'm Anne's wife.

It sounds like it's a path to mediocrity or a path to laziness.

But the truth is we need to make sacrifice in one area in order to make progress in another.

And so we want to be as intentional about that which we're going to be great at as that which we're going to be bad at.

The insight that got me tenure at the Harvard Business School was to ask you to marry me.

Let's be super honest.

If you have five things that you want to make investments in, if you invest in all of them equally, that's one strategy.

Another strategy is pick some that you want to overinvest in, but then you have to underinvest in other things.

It's almost an emotional obstacle that gets in the way.

We have forgetfulness.

So the example that brings it to life most deeply for me is the example of the MacBook Air.

I still remember when about 20 years ago, Steve Jobs strode across the stage carrying a manila envelope.

And every geek... It wasn't just the geek.

We were all paying attention to this moment.

Yeah, we were all paying attention.

And he was carrying a manila envelope and nobody had any idea what he had in that manila envelope.

None of us dared to think.

that he was going to slide out a computer from that manila envelope.

It was just unprecedented at that time.

And he presented to us the MacBook Air as thin as an envelope.

Now, to do that, to be best in class at weight, which is what his ambition was, he had to be worst in class at physical features.

So to be the lightest weight laptop on the market, he couldn't have an internal CD-ROM drive.

Yes.

And I think that you just detailed two of the most important parts of strategy, which is what am I not going to do and what am I not going to do well, right?

It's much more difficult to do something poorly than to not do it at all.

Yeah, so in construction is where it's usually used, which is there is very famously cost, quality, speed, pick two.

Indeed.

And what it essentially means is that you can't beat the competition at all three of these.

And so if you're going to pick two, one of them has to give.

It's bad in the service of good.

It's sacrifice to make progress.

So if you want to speed up the project at the same quality, it's going to cost more.

So in the world of physical products, this in order to be great, you have to be bad is not a very emotional conversation.

Right.

And it's because physics applies.

Like if I make something that I can drop on my foot,

I can't pretend that there aren't trade-offs.

I can't pretend that I can be best in class at weight and best in class at physical features, right?

That they literally physically trade off against each other.

In the world of services...

The same physics applies, but we seduce ourselves into thinking that we can be great at everything.

So this is more difficult to do in service business.

So we often say as shorthand, people think they can defy gravity.

It means they're talking about a service and they're acting as if trade-offs don't apply to them.

And they do.

Right.

Yes.

And which means it's the part that the leaders should model.

But what we find- Must model.

We're going to smell it.

yeah about why the trade-offs need to exist and so if you find your way to call the ceo like the ceo is a guaranteed yes if you can finally get through the gatekeepers to get there and that's really bad posturing the ceo should say the same no as we want the front line to say which isn't a mean no it's a contextual no

It's a strategic no.

would correspond to the entire annual profit of the airline.

I think Southwest had a 30-minute advantage.

They could turn their planes around 30 minutes faster because of many of these choices.

that gave them essentially the entire profit of the airline.

And so anything that got in that way, they can't do, but they didn't do it because they didn't care.

And you got the sense that other airlines, when they say no, it's just the person you were unfortunately assigned didn't care.

And if I was given a more empathetic person, I would have gotten a yes.

This was an empathetic no.

And that is the key on Dare to be Bad.

So you have an idea of what your service is, what your product is, and who you're serving.

So when you have those...

You start with a customer, and what is it that the customer values most?

And so I often think about this.

When the customer is thinking of giving you a dollar,

Who else are they thinking of giving that dollar to?

That's your competitive set.

And so when the customer is thinking of giving me a dollar, why?

What's the most important thing to them?

Write it down.

What's the next most important thing to them?

Write it down.

And so on.

It's really important that we know the ordering of attributes.

Otherwise...

We could make the wrong decision.

If we're going to be great at some things and bad at others, goodness, we better be great at the things they value most.

And the reason that we have people simulate the customer before going and talking to them is twofold.

One, it gets you fluent in the language.

You're like, it's the pre-conversation so that you're ready to go and be able to participate in the conversation.

And you have a hypothesis of what you might hear.

But here's the second reason.

I want people to realize how little they can trust their instincts.

Because when you simulate it... It's super humbling.

Oh my God, it's so humbling because people have so much confidence.

Oh, our customers care about this, this, and this.

I want them to do this as a group exercise because they're going to be in a group with people who are just as confident and think very differently.

Well, first of all, you're both not right.

So imagine, and this is what's going on, but imagine if you had two people in the organization.

pulling the company in different directions.

That's what's going on.

And so by doing this first, by simulating it first, you get to surface, oh my gosh, we're not all going in the same direction.

We need to go in the same direction.

And then let's go get guided by the people who know the answer, which is the customer.

So if you're going to be successful in that market, look at things at the top of the list.

If it's not one, I sure hope it's two.

And if it's not one or two, I sure hope it's three.

Otherwise, don't be in that business.

Look at things at the top of the list.

And what do you have the operational capability to be great at?

Not what are you great at today?

What do you have the potential to be great at if you gave that more attention?

Yep.

And then if I gave that more attention, I have to acknowledge where am I taking attention away?

And please don't take attention away from something that's also at the top of the list.

Right.

Take attention away from something that's at the bottom of the list.

And all of it is guided by the customer's preferences.

So where do my competitors come into this story?

So the competitors come in.

When we say, what are you going to be great at?

Great is a relative term.

What am I going to be better than the competition at?

Well, the only way I know that is if I know who the competition is.

And most of us, if we go and ask people who the competitors are, sometimes companies think their competitors are different than who the customer thinks their competitors are.

And you know who's right?

The customer.

Right, right.

Well, one is being disciplined enough to really get to the nitty gritty of that ordering of attributes, most important to least important.

That's the first thing.

The second thing is we tend to be a generous grader to ourselves, right?

And a really harsh grader to the competition.

So we overestimate what we look like in the eyes of the customers and we underestimate what our competition looks like in the eyes of the customers.

So particularly in highly competitive industries where it's the Coke versus Pepsi, Coke is great, Pepsi is bad, or Pepsi is great, Coke is bad.

Oh my gosh, don't listen to anybody on the inside about how well you think it's going.

You got to go get market research because we think we're great at everything and we think they're bad at everything.

Or does it?

Yeah.

So this, I think, is the most common question that we get when we do this exercise with organizations, which at some point when people find like they struggle to get it, they want to be great.

They don't want to be bad.

And then at some point there's the breakthrough of, oh my gosh, in order to be great, we have to be bad.

And then the light bulb goes off and they're like, wait a minute.

Does this apply to me too?

And it turned out it explained everything because even though we teach companies around the world, we were getting it wrong at home.

So when we started studying working moms, and we could line up the performance of working moms that were killing it to working moms that were just one missed handoff away from a catastrophe.

You can see it in the drop-off line.

You can see it so clearly.

I mean, I used to joke that the tell is, are your roots done?

That's a working mom who's killing it.

There's not the exasperated.

And so what we found is that the working moms that were killing it

were actually internalizing this lesson.

And they were choosing to be best in class at a few aspects at work and a few aspects at home.

And they were no longer even trying to be great at being a sibling, a daughter, a sister, a friend.

The PTA is a laughable acronym to these working moms.

Nobody does.

And everyone on the just one missed handoff away, I loved their values.

They thought, you know what?

I'm going to use my own physical exhaustion as the only binding constraint.

And at least I'm going to try to be as good as I used to be before kids.

daughter, sister, sibling, PTA, and all of that.

And so what we're saying is you can either have the nobility of effort, and that's that exhausted set of moms, that's exhausted mediocrity, the nobility of effort, or you can have the nobility of excellence, and that is being willing to make trade-offs, and you can't have both.

I felt that.

Disappearing for conspicuously long bathroom breaks.

I mean, do you remember in preschool, we used to go—by we, I mean you more than me—you used to spend so many evenings at the preschool on PTA responsibilities and on governance.

You were on the board—

Yeah.

You were staying there at the preschool till midnight.

Well, yeah.

Yeah, in fact, the first time we wrote about it was in that bargain bin book, Uncommon Service.

The second time we wrote about it was in Unleashed.

And the third time we wrote about it was in Move Fast and Fix Things.

And it's, I think, the only thing we have written about in all three books because society has not yet, we have not yet said it in a way that people have been able to fully digest.

And it's so important in this semester.

In this season, we're going to take a swing at trying to make sure that our fixers understand that in order to be great, you have to be bad, and we have to be equally unapologetic about both.

You just dropped the name of the new book, The Secret Memos.

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