Barry Cross’ Laws of Innovation, Operation and Execution

With decades of management experience, Professor Barry Cross has distilled his expertise into what he calls “Cross’ Laws.” These 10 fundamental principles of innovation, execution and operations strategy aim to improve business performance across sectors.

Throughout his career, Cross has identified key challenges organizations face in optimizing their productivity, processes and risk management. From dysfunctional processes as organizational kryptonite to the impact of fear and groupthink on decision-making, his insights are both practical and impactful.

In this video, Cross, the Distinguished Faculty Fellow of Operations Strategy at Smith School of Business, delves into the critical dynamics of business model life cycles and the strategies that distinguish agile leadership from conventional approaches. He emphasizes the importance of anticipating and shaping future cycles of value creation, rather than merely reacting to external factors.

Drawing on anecdotes and practical examples gleaned from his years of experience in the automotive and manufacturing sectors, Cross explains how small, seemingly insignificant operational details can profoundly impact customer satisfaction and a firm’s success. He advocates for efficient process designs that mitigate risks and enhance collaboration across organizational silos.

Whether you’re leading a team or navigating complex business challenges, this video promises valuable insights to elevate your approach to productivity and strategy execution.

[MUSIC PLAYING]

Barry Cross:

00:08: Cross’ Law – The business model life cycle outlines the behaviour of every business cycle.

You’re likely familiar with the product life cycle or a service life cycle. In a broader sense across our organizations, we’ve also got to contend with a business model life cycle. And that’s where we as an organization, if we are diligent and perhaps lucky enough, we may be able to grow a business or a concept up to some form of value creation. But it comes to an end.

Some organizational leadership will look at that portion where it starts to flatline a little bit and blame some external disturbance or perhaps the economy. More agile leadership will look at this and say, “You know what? If we are again diligent or perhaps lucky enough, maybe we get to define what that next business model life cycle looks like.”

00:47: Cross’ Law – Making customers wait can destroy a perfectly good service experience.

So, you’ve just had a great meal with family and friends, asked for your bill, and it takes another 10, 15, 20 minutes even for that bill to arrive. Imagine you’re coming back from vacation. You’ve had a great flight. The flight may even be a little bit early, but when the plane pulls up to your gate, it takes another 20 minutes for that gate agent to give you permission to deplane.

A wait can destroy an otherwise perfectly good service encounter, and the reason for that is that’s the last thing you remember. So, it’s often a seemingly insignificant step in your overall process design. Don’t leave it to chance.

01:23: Cross’ Law – Suppliers are your number one source of risk.

Your suppliers are your number one source of risk. That doesn’t mean they're not good people; they are. In fact, both organizations are very much aligned in their direction [and] how they work together on some of those key strategic projects.

The challenge you’ve got is that they are disconnected from you. They’re under a different roof, they’re some distance away, and therefore, when something goes sideways on that key project, and it will, that’s when you run into a bit of a communication challenge. So, we’ve got a solution.

Think about that bow tie style relationship on one hand, and that’s where you’ve got a single point of contact right here in the middle. That’s perhaps our purchasing people with their salespeople, and that’s really the only relationship you’ve got established between you and that organization. And therefore, when we run into issues with that particular project, I don’t have other levels of responsibility where we can perhaps get together and solve those problems.

Over here on the other hand, we’ve got what we’ll call a diamond relationship. And this is where, yes, we’ve still got that same level of relationship between our purchasing and their salespeople, but I also have a relationship at the VP level. I’ve got a relationship with the project teams on both sides. Even our shipping and receiving people talk to each other, and, in fact, we hopefully have a relationship at the very top with our CEOs.

And then when something goes a little bit sideways, you have multiple opportunities for us to be able to solve that problem.

02:45: Cross’ Law – Dysfunctional processes are organizational kryptonite.

Dysfunctional processes are organizational kryptonite . . . I think we’re good, right?

02:51: Cross’ Law – Loyalty is only as good as the fact there isn’t someone better next door.

You’ve just bought a new car, and [you’re] very excited about it. But after you’ve been driving the car for a few months, you realize, hey, it may not be quite big enough for you. Can you trade it in at this point? Probably not. You’re probably stuck with that car. You bought a new television set, same thing. Maybe three years, four years with that TV before you replace it.

You have a bad experience at your local restaurant, however? That’s a different story. You may not go back. Same thing with that hotel with a poor stay and poor checkout experience. Customer loyalty in a service is only as good as the fact there’s not somebody better next door.

03:24: Cross’ Law – Applying risk management increases organizational priority on a project.

Why do projects fail? Well, essentially, it’s a matter of not having sufficient priority on that project to manage the inherent uncertainty associated with doing something new within that key initiative.

So yeah, project management is tedious. It consumes scarce resources within the organization, and we’re talking about things like gate review systems, project sponsors at the leadership level and even risk management matrices like FMEAs [failure, mode and effects analysis].

The trade-off is that investing in that risk management by itself will increase the level of priority that you and your organization are placing on that project. And thereby [you will] manage the inherent uncertainty.

04:06: Cross’ Law – Always fix or improve existing capacity before adding new capacity.

One of the biggest challenges organizations face is having sufficient resources to do the things that are important: the people, the space, the time and the money to get the job done.

Before we buy a new capacity or hire people, however, take a hard look at our existing processes, find a way to optimize those processes [and] free up capacity, before we go out and buy new capacity.

04:30: Cross’ Law – You either have a process problem or a people problem.

Fifty years ago, [the American management expert W. Edwards] Deming said that bad processes beat good people every time. What was he talking about? Well, every organization has challenges associated with how they operationalize value.

You’ve either got a people problem or a process problem, yet you’ve probably got pretty good people. Often those people are making up for some of your process challenges inside of the way that you work, the way that you create value. Focus on this. This is an area that has an impact on morale, customer enthusiasm, and it’s often costing you money as well.

05:00: Cross’ Law – Things happen when you say “no”.

Vince Lombardi said, “Fear makes cowards of us all.” Yet the joining culture, fear of missing out, and the fact that we’ve all got more meetings on our schedules now than ever before makes it difficult. What do we do?

This is about personal prioritization and the ability to say “no” to free up your time to focus on what’s most important.

05:19: Cross’ Law – The moment we all think alike is the moment we stop thinking.

So how do we counter groupthink? Diversity is obviously important, but so is diverse thinking and different perspectives when it comes to problem-solving and innovation. Some of your organizations will have a devil’s advocate. By their personality, [these are people who are] comfortable with the idea of pushing back and challenging this particular path that we’re considering.

In other organizations, you’ll want to nominate that individual and say, “Hey, look, I need you to take the next 24 hours and come up with some reasons why we may not want to pursue this path.”

At the end of the day, though, somebody’s got to be able to make a decision and say, “Among these diverse ideas, this is what we’re going to do.”

Nobody ever built a statue of a committee.