There is a lot of talk about values in the corporate world. There are also a lot of corporate webpages (the new form of corporate poster) listing the values that purport to underpin the culture of many an esteemed institution. For something so important, it's remarkable how varied are the interpretations of what a value actually is. For example, a quick look at a few companies in the upper end of the Fortune 500 shows how loosely the term is applied and a confusion between outcomes, behaviors and values: 'relationships', 'boundarylessness' (sic!), 'responsibility', 'partnership', 'performance', 'diversity', and 'respect', to name a few examples.
If behavior change, or at least the alignment of behaviors around a few core themes, is the point of most lists of corporate values, then it might be useful if there was a little more consistency in our understanding of what they are and how we applied them. I came across two definitions of values recently that are useful:
• 'The criteria people use to select and justify actions and to evaluate people…. and events' (SH
Schwartz, 1992)
• 'Principles for ordering consequences of alternatives according to preferences' (Hambrick & Brandon, 1988).
If these definitions were used in practice, it might encourage people to think harder about choosing values that have a clear connection to specific behaviors that, in turn, will drive towards a desired end result. Once you have that idea in mind, it's much easier to see the importance of ensuring values are understood and internalized by leaders and employees, and embedded in HR performance management processes, rewards, training courses and other corporate shapers of behavior. There is a natural relationship between, and flow across, values, people processes, behaviors and performance. If these connections are not made then there will be no impact on performance, and if no impact on performance, then why bother in the first place?
As I dug into the topic further, I asked myself if there is any evidence that some values are more effective than others. Jia, Lee, Moon and Li (2009) in one study and Lado, Boyd and Hanlon (1997) in another showed three important considerations which we should take into account when deciding what values our company should declare itself to be pursuing:
1: a focus on self enhancement tends to drive short term performance (for example individual ambition, competition, independence)
2: values that focus on wider stakeholder interests tend to enhance longer term performance and innovation (e.g. helpfulness, loyalty, citizenship)
3: combinations of co-operative and competitive values increase the impact on performance.
But do these lists of corporate values actually achieve anything? Do they ever drive any hard business decisions in practice? There are a few outstanding examples of companies responding to product failures in ways that reflected their core values and others who have shown impressive persistence in their commitment to a particular value, for example customer service. So, rare they may be, but these examples show it really is possible to mean what you say. Maybe all those centuries ago the stoic philosopher Epictetus gave us the right guidance when he said: First learn the meaning of what you say, and then speak. Not the other way around.
Tuesday, December 15, 2009
Corporate Values: Say What You Mean, Mean What You Say
Sunday, September 6, 2009
Visionary or No Place to Hide - Which Would You Get Out of Bed For?
I was struck by two contrasting styles of leadership as described in two different articles in the NY Times this weekend.
Alan Mullally current head of Ford Motor Company talks in the Corner Office section of the paper about what Collins and Porras would call a BHAG (Big Hairy Audacious Goal), but in the tamer language you would expect of a CEO running a $100bn+ company, he says "…the higher the calling, the higher the compelling vision that you can articulate, the more it pulls everybody in."
On the other hand, in the cover story of the business section an article about Lego quotes Jorgen Vig Knudstrop, CEO since 2004, talking about the way he manages people: "…there's no place to hide if performance is poor. You will be embarrassed, and embarrassment is stronger than fear."
Now, there is no doubt that Knudstrop has seen success - toy sales in the US dropped by 5% last year, but Lego sales increased by nearly 19%. That's pretty amazing by most standards.
But, who would you rather work for, the visionary or the 'no place to hide' guy?
When we think of leaders who generated massive followership, we tend to name the likes of Churchill, Martin Luther King, Gandhi, Abraham Lincoln, Genghis Khan. I don't think our history books give the non-visionaries much of a look in. And, I think that's because getting out of bed is a lot easier when one feels part of some grand vision, whereas 'no place to hide' is probably more of a reason to stay under the duvet covers. Leaders, more vision, please!
Wednesday, August 26, 2009
Designing Organization Structures - A Question of Principles or Metrics?
Ever been presented with two equally attractive but mutually incompatible choices? Of course you have. It's all part of the human condition. In the demotic lingo of our time, there is no doubt that it sucks to be in this situation. It particularly sucks that it doesn’t restrict itself to one manageable compartment of our lives. We see it all around us. Take organization design (it took a while, but now I'm on topic) for example.
Every book on the topic and every management consultant's process involves an early stage calling for the establishment of some design ‘principles’ or ‘criteria'. To quote Jay Galbraith, a leading figure on the subject, these should be ‘concrete statements about how the organization will behave.’ Having been involved in organization designs many times over the years, I can tell you that there are typically two frustratingly non-complementary outcomes from this exercise:
A friend who is a senior executive in what might be loosely called the technology industry called me recently to chew over some design issues. He described his list of principles. In essence, they were: position for growth, cut costs, be flexible and able to respond to changing circumstances. Yes, and I want to be able to work a short week without any pecuniary disadvantage, eat and drink all I want, and be fit and healthy all at the same time. Sorry, but if it's that important, then choices have to be made so that you are not stuck with aforesaid equally attractive but incompatible goals. Is cutting costs the priority or gearing up for growth? Can you really afford to build in organizational redundancy to achieve the flexibility you are seeking?
I hear you mumbling something along the lines of 'We can all pick holes. Have you got a better idea?' Well, let me try one on you. Maybe we need to start design from a different perspective, borrowed from all those shareholder value enthusiasts. Ask yourself, which metrics have to show improvement, and by how much, in order to justify the disruption of re-organizing. Then take those metrics and figure out what changes would be needed in the organization structure to have an impact on them. You might find that it's not a structural change that's needed. By focusing on the metrics you may well find that the most appropriate response should be a small specific change, rather than risking a big upheaval through restructuring. It might be just a question of making talent choices: who needs to sit where and what type of people need to be hired. It might tell you that deploying a new set of goals is sufficient, or different mechanisms are required for integrating activities across the company.
But even if you do decide that a restructuring is required, you’ll have a much clearer conception of what needs to change. For example, if the metrics show that you need a higher rate of product development then you will work on the innovation centers of the company, if you need more sales, you might need to work on both product development and the sales force organizations. The more specific you get, the more likely any restructuring will be both effective and efficient.
In my friend's case, a merger was driving the need for redesign. Obviously, you cannot avoid a re-organization in this situation, but the metrics based approach still applies. You still need to figure out the specific changes that will lead to performance improvements and justify the merger.
Numbers almost inevitably help you to be more specific and be set in reality, not theory. The more specific you are, the more realistic the list will be (less exhilaration maybe, but less of a downer as well). The more realistic, the more likely you are to achieve the outcomes for which you were hoping. Less effort wasted on generalizations, plus measurably improved outcomes are things that might even bring a smile to the faces of our shareholder value friends.
Every book on the topic and every management consultant's process involves an early stage calling for the establishment of some design ‘principles’ or ‘criteria'. To quote Jay Galbraith, a leading figure on the subject, these should be ‘concrete statements about how the organization will behave.’ Having been involved in organization designs many times over the years, I can tell you that there are typically two frustratingly non-complementary outcomes from this exercise:
- A sense of exhilaration at the level of ambition and expectation being placed on the result of the soon-to-be-designed structure ("Cool, this is going to sort out everything, once and for all."). The problem with this is that the expectations are quickly dashed by the second outcome….
- A sense of hopelessness, given that the list of design principles is long and, you guessed it, has many incompatible expectations ("Cripes, are you kidding me? How do we achieve all of this?"). This is problematic. The statements are, all too often, so generic (i.e. anything but concrete) that, coupled with the length of the list, post-design practically any action could be rationalized as having met some element of the criteria - without necessarily doing anything useful.
A friend who is a senior executive in what might be loosely called the technology industry called me recently to chew over some design issues. He described his list of principles. In essence, they were: position for growth, cut costs, be flexible and able to respond to changing circumstances. Yes, and I want to be able to work a short week without any pecuniary disadvantage, eat and drink all I want, and be fit and healthy all at the same time. Sorry, but if it's that important, then choices have to be made so that you are not stuck with aforesaid equally attractive but incompatible goals. Is cutting costs the priority or gearing up for growth? Can you really afford to build in organizational redundancy to achieve the flexibility you are seeking?
I hear you mumbling something along the lines of 'We can all pick holes. Have you got a better idea?' Well, let me try one on you. Maybe we need to start design from a different perspective, borrowed from all those shareholder value enthusiasts. Ask yourself, which metrics have to show improvement, and by how much, in order to justify the disruption of re-organizing. Then take those metrics and figure out what changes would be needed in the organization structure to have an impact on them. You might find that it's not a structural change that's needed. By focusing on the metrics you may well find that the most appropriate response should be a small specific change, rather than risking a big upheaval through restructuring. It might be just a question of making talent choices: who needs to sit where and what type of people need to be hired. It might tell you that deploying a new set of goals is sufficient, or different mechanisms are required for integrating activities across the company.
But even if you do decide that a restructuring is required, you’ll have a much clearer conception of what needs to change. For example, if the metrics show that you need a higher rate of product development then you will work on the innovation centers of the company, if you need more sales, you might need to work on both product development and the sales force organizations. The more specific you get, the more likely any restructuring will be both effective and efficient.
In my friend's case, a merger was driving the need for redesign. Obviously, you cannot avoid a re-organization in this situation, but the metrics based approach still applies. You still need to figure out the specific changes that will lead to performance improvements and justify the merger.
Numbers almost inevitably help you to be more specific and be set in reality, not theory. The more specific you are, the more realistic the list will be (less exhilaration maybe, but less of a downer as well). The more realistic, the more likely you are to achieve the outcomes for which you were hoping. Less effort wasted on generalizations, plus measurably improved outcomes are things that might even bring a smile to the faces of our shareholder value friends.
Thursday, July 30, 2009
My Cultural Stereotypes OK, Your's Not OK
Whenever I visit Asia, it never ceases to amaze me how many of the regional operations of European and US companies are managed by people from the parent company's domestic market. The arguments for this that I hear are usually of the, 'We cannot find the local talent' or 'We need to ensure consistency of parent company culture and processes around the world', variety. However, given that many Asian owned companies operating in Europe or the US reflect the same phenomenon in reverse, the argument over lack of local talent seems a little weak.
These days all markets are a mix of local and global, but it is the local differences that represent a huge opportunity for differentiation, as well as the need for thinking that goes beyond the presumptions developed in the parent company market.
Undeniably, there will be challenges in persuading local talent to join a foreign brand, unless it has the kudos (and willingness to pay above the going rate) of a Goldman Sachs or suchlike. However, being a suspicious type, I'm guessing that there is also an underlying cultural parochialism at play, which results in a preference for the use of home grown expatriates, despite the huge costs involved. Cultural differences in problem solving, selling styles, business relationships, and languages are seen as frustrating complications, rather than opportunities to increase effectiveness. One senior manager of a services company recently complained to me that they could not find decent sales folk or senior management in their East Asian markets because local candidates tended to lack aggression, creativity and leadership aspirations. That's quite a list of things for a nation to have in short supply. Any country that has been involved in the trade of goods and services for centuries probably has a reasonable number of people who know how to chase a deal or think new thoughts or organize others, albeit they may do it differently from the way it's done back home.
Research on cultural stereotypes tends to fall apart somewhat once you get beyond the obvious extremes of the collectivist (e.g. Japan) and individualist (you can guess) cultures. Individual differences so often outweigh the effects of broader cultural differences, that we need to get better at dismissing stereotypes. The reality: different management and working styles are effective in different markets. So let's raise a glass to the wonders of diversity and give a thumbs down to cultural presumptions. Try harder to understand the different models that can lead to success in different markets, be more persistent in seeking out local recruits and maybe take a little more risk along the way. It really doesn't sound like more than we would expect of someone entering our own domestic market.
These days all markets are a mix of local and global, but it is the local differences that represent a huge opportunity for differentiation, as well as the need for thinking that goes beyond the presumptions developed in the parent company market.
Undeniably, there will be challenges in persuading local talent to join a foreign brand, unless it has the kudos (and willingness to pay above the going rate) of a Goldman Sachs or suchlike. However, being a suspicious type, I'm guessing that there is also an underlying cultural parochialism at play, which results in a preference for the use of home grown expatriates, despite the huge costs involved. Cultural differences in problem solving, selling styles, business relationships, and languages are seen as frustrating complications, rather than opportunities to increase effectiveness. One senior manager of a services company recently complained to me that they could not find decent sales folk or senior management in their East Asian markets because local candidates tended to lack aggression, creativity and leadership aspirations. That's quite a list of things for a nation to have in short supply. Any country that has been involved in the trade of goods and services for centuries probably has a reasonable number of people who know how to chase a deal or think new thoughts or organize others, albeit they may do it differently from the way it's done back home.
Research on cultural stereotypes tends to fall apart somewhat once you get beyond the obvious extremes of the collectivist (e.g. Japan) and individualist (you can guess) cultures. Individual differences so often outweigh the effects of broader cultural differences, that we need to get better at dismissing stereotypes. The reality: different management and working styles are effective in different markets. So let's raise a glass to the wonders of diversity and give a thumbs down to cultural presumptions. Try harder to understand the different models that can lead to success in different markets, be more persistent in seeking out local recruits and maybe take a little more risk along the way. It really doesn't sound like more than we would expect of someone entering our own domestic market.
Tuesday, July 14, 2009
Compassionate Capitalism?
There is a whole industry devoted to trying to figure out if companies that treat their people well do better over the long run than those who apply themselves less assiduously to this saintly cause. It's quite fascinating how much attention is given to this subject, particularly in the U.S. where we have the double whammy of a political system that provides relatively paltry social safety nets compared to many other developed economies (particularly continental Europe) and a business culture that is immensely, ahem, 'flexible' (i.e. layoffs are a common early response to any downturn in revenues).
One book, Firms of Endearment does a nice job of making the case for the linkage between looking after your people and financial success, but it's notable that of 28 companies that made the 'Final Cut', only 4 of them hailed from outside the US, presumably as a sop to non-U.S. readers. Oh please, are we really saying that in a world as globalized as ours is these days, we cannot do a better job of recognizing that we might do well to learn more about what others are doing, and spend a little less time on comparing and contrasting what is happening inside one, albeit major, part of the world economy.
So, it's nice to see some recognition that companies outside the US with a focus on the welfare of employees do actually exist. In the NY Times on Sunday an article described a German machine tool manufacturer, Trumpf, that tries very hard to avoid layoffs during hard times. They don't always succeed, but they do try any number of creative alternatives before resorting to layoffs, including banking overtime hours during good times that can be called upon during tough times. Of course, Trumpf exists in a system that is the direct opposite of the US: in Europe, government supported social safety nets are substantial and employment law makes it hard for companies to layoff people unless they have a powerful case for doing so.
In the seventies we used to obsess about Japanese management systems, with many companies paying substantial amounts to learn about the Toyota Production System or something similar, but there seems to have been much less interest in hearing about, for example, the Scandinavian versions of social capitalism that have been so successful or about the strength of the German Mittelstand, or the effects of Confucianism on the success of many Asian companies.
Notwithstanding the different political and social choices that societies east and west make that result in these different systems, with long term unemployment creeping ever higher is this not the perfect time to broaden our horizons and look more deeply at the choices we make and revisit the question of the role of a company in society, it's obligations to the communities on which it depends for it's success and, indeed, our definitions or what constitutes 'success'?
One book, Firms of Endearment does a nice job of making the case for the linkage between looking after your people and financial success, but it's notable that of 28 companies that made the 'Final Cut', only 4 of them hailed from outside the US, presumably as a sop to non-U.S. readers. Oh please, are we really saying that in a world as globalized as ours is these days, we cannot do a better job of recognizing that we might do well to learn more about what others are doing, and spend a little less time on comparing and contrasting what is happening inside one, albeit major, part of the world economy.
So, it's nice to see some recognition that companies outside the US with a focus on the welfare of employees do actually exist. In the NY Times on Sunday an article described a German machine tool manufacturer, Trumpf, that tries very hard to avoid layoffs during hard times. They don't always succeed, but they do try any number of creative alternatives before resorting to layoffs, including banking overtime hours during good times that can be called upon during tough times. Of course, Trumpf exists in a system that is the direct opposite of the US: in Europe, government supported social safety nets are substantial and employment law makes it hard for companies to layoff people unless they have a powerful case for doing so.
In the seventies we used to obsess about Japanese management systems, with many companies paying substantial amounts to learn about the Toyota Production System or something similar, but there seems to have been much less interest in hearing about, for example, the Scandinavian versions of social capitalism that have been so successful or about the strength of the German Mittelstand, or the effects of Confucianism on the success of many Asian companies.
Notwithstanding the different political and social choices that societies east and west make that result in these different systems, with long term unemployment creeping ever higher is this not the perfect time to broaden our horizons and look more deeply at the choices we make and revisit the question of the role of a company in society, it's obligations to the communities on which it depends for it's success and, indeed, our definitions or what constitutes 'success'?
Saturday, July 4, 2009
How Large Should Your Management Team Be?
When someone asks me the question 'How many people should typically be in a senior management team?' or some variant thereof, it generally seems to mean that they already have a point of view for which they want to find a justification. Either they think that the team is too large, or they want to argue the case for enlarging it. Why is this almost always true? Because the people asking the questions are, by and large, smart and experienced executives, and with a moment of thought they will know that the answer is a huge 'It depends'.
The problem is that any benchmarking data you find will almost certainly come with so many hedges that it raises far more questions than it answers. The hedges will require you to answer questions such as: what kind of business are you in, are you global, what scale of revenues/ profits are you managing, how many employees are there, how complex is your business model, etcetera, etcetera. Even after taking into account these variables, you will find that the variance across different companies is substantial. So, the best you can hope for is that you will land on a range that is so wide that it allows you to be happy with any answer that you choose to come up with.
So, if my initial contention is correct, the response to the question of team size should be 'What do you want the answer to be?'. This, of course, will not get you far, but it does save a lot of time if you know what you want to do regardless of any alternative possibilities. The more appropriate question would be 'What problem are you trying to solve?'. The real point here is that you should figure out what you need in order to get the work of the company done, minimize organizational inefficiencies, provide roles for the talent you want to keep at that level, and reflect your organizational values. This should be done through some serious internal analysis and thought, rather than relying on any false confidence provided by an external and relatively superficial rule of thumb.
In any case, whatever benchmark data you see will still leave you with some serious analysis and thinking to do. So, if my experience is anything to go by, you should save yourself the embarasment of generating (or paying for) a lot of data that will be ignored once you get past the 'Hmm, that's fascinating, but what does it tell us….' phase.
Having said all this, for those who still hanker after the data, some useful work was done by Ashridge Strategic Management Centre (UK) in 2000. Also, the Saratoga Institute is often used as a source. And, fear not, there are many more sources out there for those that enjoy the journey at least as much as the arrival.
The problem is that any benchmarking data you find will almost certainly come with so many hedges that it raises far more questions than it answers. The hedges will require you to answer questions such as: what kind of business are you in, are you global, what scale of revenues/ profits are you managing, how many employees are there, how complex is your business model, etcetera, etcetera. Even after taking into account these variables, you will find that the variance across different companies is substantial. So, the best you can hope for is that you will land on a range that is so wide that it allows you to be happy with any answer that you choose to come up with.
So, if my initial contention is correct, the response to the question of team size should be 'What do you want the answer to be?'. This, of course, will not get you far, but it does save a lot of time if you know what you want to do regardless of any alternative possibilities. The more appropriate question would be 'What problem are you trying to solve?'. The real point here is that you should figure out what you need in order to get the work of the company done, minimize organizational inefficiencies, provide roles for the talent you want to keep at that level, and reflect your organizational values. This should be done through some serious internal analysis and thought, rather than relying on any false confidence provided by an external and relatively superficial rule of thumb.
In any case, whatever benchmark data you see will still leave you with some serious analysis and thinking to do. So, if my experience is anything to go by, you should save yourself the embarasment of generating (or paying for) a lot of data that will be ignored once you get past the 'Hmm, that's fascinating, but what does it tell us….' phase.
Having said all this, for those who still hanker after the data, some useful work was done by Ashridge Strategic Management Centre (UK) in 2000. Also, the Saratoga Institute is often used as a source. And, fear not, there are many more sources out there for those that enjoy the journey at least as much as the arrival.
Thursday, June 18, 2009
Bridging the Gap Between Mission Passion and Customer Service
I recently discussed with a senior executive in the financial services sector how, in some organizations, employees might be hugely committed to the mission of the enterprise, without this somehow translating into a powerful customer service ethos.
I occasionally meet people who work at companies like Virgin Atlantic, Nike or many of the luxury retail brands and get the sense that they are really passionate about what the company stands for and offers. Designers at Tiffany will tell you how excited they get when they see people wearing their jewelry in the street, Nike employees surely bleed the swoosh logo if you cut them open (not recommended, by the way). It is these people whose level of engagement in what they are doing remind me of the power of having a 'vocation'. Strangely though, this 'mission passion' doesn't always translate into a passion for the customer (maybe customers are just too fickle for even the most passionate soul!).
As I reflect on this, I wonder if this is merely an extension of the age old problem of reality not living up to the ideas: people as different as Gandhi, President Clinton and Rush Limbaugh have all shown us the difficulties of matching ideas about how society should operate with their own personal lives; the idea of Webvan (remember that one?) seemed an immensely attractive idea to many, but completely failed in practice; the JP Morgan folk who dreamed up credit derivatives didn't seem to anticipate the ways in which they would be used once their ideas started to spread.
In this conversation, I saw a threefold problem for the executive:
1.How do you translate passion for mission into world beating customer service, as Nordstrom has been famed for over the years or these other companies nominated by Business Week
2. If you haven't got either end of it right (neither mission passion, nor service), where do you start to make the change
3. Who can you look to in the Financial Services Industry as an exemplar?
To state the obvious, the number of variables at play here mean that the questions are much easier to pose than the answers to find. As it is not in my nature to be defeatist, I would suggest the following possibilities:
1. Very few big ideas are truly astounding enough to do more than provide passing excitement, so building from the grass roots up (yes, there may be something to learn from politicians here) is a more likely route to establish and sustain shifts in values than from going top down
2. Cross pollination between industries may provide some of the best ideas that would help a company to break free of the accepted rules of the game within it's own sector (put Nike employees or Tiffany designers in a room with some investment bankers and lock the door)
3. While the Financial Services industry may not have a great reputation at the moment, there are some examples of banks who have achieved impressive levels of customer service (look again at that Business Week list).
Establishing consistency between ideas, values and behaviors seems like a good place to start. Match the way leaders talk to how they act, link the mission to the HR systems and business processes and design products that you would be proud of. Then, be consistent enough in your approach that people, internally and externally, can see that your intentions are serious. Based on what some impressive companies are achieving, this combination seems likely to take you a long way towards bridging that gap between mission passion and great customer service.
Monday, May 25, 2009
CEO Transitions - Avoiding a Lottery
The NY Times reports an orderly CEO transition at Xerox - something of a rarity these days. It follows a (so far) successful turnaround of a company that was perilously close to bankruptcy, and it is the first Fortune 500 company to pass the CEO baton from one woman to another (who is also the first African-American female CEO in this category). The contrast with the more painful transition at AIG reported on the same page is hard to escape. Whilst hardly a valid sample, it's interesting to speculate if this difference might partly reflect the value of promoting internal candidates over externals in difficult times. When markets are flat or declining, companies need to look inside themselves for the answers, and a CEO who knows the company inside out is going to be in a better position than an outsider to know what needs to be done and how. Parachuting someone in from the outside who must be, to some extent, blind to the complexities of the real job, in order to fix a challenging set of internal issues may seem a great idea, but it's a risky approach. They may get lucky, but there's a good chance the fix won't work.
Back in 2002 in his book Searching for a Corporate Savior, Rakesh Khurana showed how, on an objective basis, and all things being equal, a good internal candidate is likely to perform better than a good external. Maybe the Xerox transition can be an encouragement to us all to spend less time focusing on the shortcomings of internal candidates who have the misfortune to be known quantities. Instead, we might benefit from spending more time focusing on the risks involved in recruiting outsiders about whom we have little more than reputations on which to judge their suitability for a new role.
By the way, the business section of the NY Times on the same front page also reports on planned changes to the rules for appointing company directors. Organizational change is in the air and the job of the CEO is about to get even harder, as if it wasn't tough enough already.
Back in 2002 in his book Searching for a Corporate Savior, Rakesh Khurana showed how, on an objective basis, and all things being equal, a good internal candidate is likely to perform better than a good external. Maybe the Xerox transition can be an encouragement to us all to spend less time focusing on the shortcomings of internal candidates who have the misfortune to be known quantities. Instead, we might benefit from spending more time focusing on the risks involved in recruiting outsiders about whom we have little more than reputations on which to judge their suitability for a new role.
By the way, the business section of the NY Times on the same front page also reports on planned changes to the rules for appointing company directors. Organizational change is in the air and the job of the CEO is about to get even harder, as if it wasn't tough enough already.
Monday, May 18, 2009
Team Development Without Touching
A bunch of intelligent, ambitious and proud financial wizards are intent on starting a business together, but they are geographically dispersed, have quite different personalities and have some emerging concerns that this combination of factors could scupper their new business almost before it gets started. Bankers are not known for their indulgence in psychological theory, but they do tend to be fearful of failure and anything that is likely to restrict their earning potential. If a tool can reduce their anxiety level and increase their confidence in making money, it's got some hope of grabbing their attention, at least for a while.
Could a personality profiling instrument like the Myers Briggs Type Indicator (MBTI) be of any value in helping them find ways to work together effectively, despite their lack of contact? Could it help them avoid the frequently misleading mind reading we all tend to engage in when we don't t spend enough close up time with people?
This challenge was put to me by a friend recently, together with a MBTI profile of said team. I had not met these folk, but was mindful of the common prescription not to judge a book by it's cover. On the other hand, I recall from my days as a psychology student as well as more recent research, that human intervention is not always necessary to achieve positive behavioral change. Sometimes interacting with computers acting as therapeutic proxies can do a pretty good job. So why not interpret personality data at a distance and trust that the feedback will act rather like the therapeutic computer, causing them to ask questions and engage in a fruitful debate between themselves?
As my friend and I discussed their situation, I realized that my not having met these characters became a creatively liberating process. Freed from the prejudices that come from first meetings, I could focus solely on the mapping of their types and their level of dispersion across the preferences. They displayed considerable diversity (in terms of personality at least), coupled with a series of overlapping links between certain individuals on particular preferences. It struck me that this mixture presented them with their greatest risk (they are quite different in many ways and may find it impossible to work together) as well as their greatest opportunity (by building on the chain of connections across the team, they could achieve strength). It was also pretty clear that if they openly acknowledged the differences, it might spur them to actively experiment with the way in which they worked together. This might, in turn, increase the odds of them accelerating their formation as a successful team. Of course, into the mix must come the influences of their various talents, experiences and energies, but the basic exercise we undertook may point to an opportunity for on-line consulting with a new USP: workshop-free team development. Maybe in some situations face to face interaction between consultant and client is way too complicating - perhaps we should just keep it simple and fill in the forms.
Could a personality profiling instrument like the Myers Briggs Type Indicator (MBTI) be of any value in helping them find ways to work together effectively, despite their lack of contact? Could it help them avoid the frequently misleading mind reading we all tend to engage in when we don't t spend enough close up time with people?
This challenge was put to me by a friend recently, together with a MBTI profile of said team. I had not met these folk, but was mindful of the common prescription not to judge a book by it's cover. On the other hand, I recall from my days as a psychology student as well as more recent research, that human intervention is not always necessary to achieve positive behavioral change. Sometimes interacting with computers acting as therapeutic proxies can do a pretty good job. So why not interpret personality data at a distance and trust that the feedback will act rather like the therapeutic computer, causing them to ask questions and engage in a fruitful debate between themselves?
As my friend and I discussed their situation, I realized that my not having met these characters became a creatively liberating process. Freed from the prejudices that come from first meetings, I could focus solely on the mapping of their types and their level of dispersion across the preferences. They displayed considerable diversity (in terms of personality at least), coupled with a series of overlapping links between certain individuals on particular preferences. It struck me that this mixture presented them with their greatest risk (they are quite different in many ways and may find it impossible to work together) as well as their greatest opportunity (by building on the chain of connections across the team, they could achieve strength). It was also pretty clear that if they openly acknowledged the differences, it might spur them to actively experiment with the way in which they worked together. This might, in turn, increase the odds of them accelerating their formation as a successful team. Of course, into the mix must come the influences of their various talents, experiences and energies, but the basic exercise we undertook may point to an opportunity for on-line consulting with a new USP: workshop-free team development. Maybe in some situations face to face interaction between consultant and client is way too complicating - perhaps we should just keep it simple and fill in the forms.
Thursday, April 30, 2009
Time for Reflection
Sitting in Starbucks recently, I paused for a moment to reflect on some essays I was reading by Charles Handy and as I scanned the room it was remarkable to see how every single person was engaged in some form of activity. People were reading, staring at their 'phones, chatting - but not one person was just sitting and reflecting. I put my book down. I reflected. It was hard work.
Have we lost the will to reflect? In former times (forgive me if I'm romanticizing the past now) I imagine people (at least those who weren't slaving in the mills or poor houses) had time to do more than chat, instead there was a culture that valued active engagement in discussions about ideas and having some time alone without distractions to just… think. Now, we have any number of distractions and a culture that demands we look busy on a fulltime basis (ever feel uncomfortable in an elevator or at a party with nothing to make you look occupied? Those ubiquitous TV monitors serve a function you know).
Also, brain work consumes a lot of energy - something like 20% of our daily calories. Aside from the fact that it is good that we work those neurons to stop our dearly beloved and very necessary hippocampus from shrinking on us, it is tiring work - so maybe we like to avoid raw thinking time pretty much as we do physical workouts.
Yet reflection is the time we take to learn from what we or others have done, make sense of the world and figure out how to do things better in the future. I observe many senior executives moving swiftly from meeting to meeting, reading and commenting on documents scanned at speed and existing on 4-5 hours sleep a night. Their lives are consumed by events, and the time for reflection and learning is lost to them. Whilst they are in control to the extent that they decide what events will fill up their schedule, they are clearly not choosing to cram in reflection time and may well seem to an outside observer (of a reflective bent, naturally) that they are, to all intents and purposes, completely out of control. Sumantra Ghoshal and Heike Bruch drew attention to this problem in a 2002 HBR article in which they said that only 10% of managers spent their time in a purposeful, reflective manner - you could allow them to be out on this number by any reasonable factor you like and it would still make you read it twice to check your eyes weren't tricking you.
Similarly, I see so many training courses skinnied down to the basics because of a fear of productivity loss back at the workplace. Training itself becomes a series of highly structured activities strung together over a shortened program, with little or no reflection time involved. No surprise that the retention rate and application of workplace learning is, all too often, pitifully low.
How about we decide to make reflection a major part of our working lives? Imagine if each employee had to write down what they had learned in the past year in preparing for their performance evaluation? What if CEOs started to spend 15 minutes at the end of each day asking themselves 'What did I learn today and what could I have done better?', and then encouraged their subordinates to do the same? I would guess that we would improve performance, increase adaptability, get more control over how we spent our time and even start to enjoy our jobs more. Not a bad combination of corporate and self interest. Think about it.
Have we lost the will to reflect? In former times (forgive me if I'm romanticizing the past now) I imagine people (at least those who weren't slaving in the mills or poor houses) had time to do more than chat, instead there was a culture that valued active engagement in discussions about ideas and having some time alone without distractions to just… think. Now, we have any number of distractions and a culture that demands we look busy on a fulltime basis (ever feel uncomfortable in an elevator or at a party with nothing to make you look occupied? Those ubiquitous TV monitors serve a function you know).
Also, brain work consumes a lot of energy - something like 20% of our daily calories. Aside from the fact that it is good that we work those neurons to stop our dearly beloved and very necessary hippocampus from shrinking on us, it is tiring work - so maybe we like to avoid raw thinking time pretty much as we do physical workouts.
Yet reflection is the time we take to learn from what we or others have done, make sense of the world and figure out how to do things better in the future. I observe many senior executives moving swiftly from meeting to meeting, reading and commenting on documents scanned at speed and existing on 4-5 hours sleep a night. Their lives are consumed by events, and the time for reflection and learning is lost to them. Whilst they are in control to the extent that they decide what events will fill up their schedule, they are clearly not choosing to cram in reflection time and may well seem to an outside observer (of a reflective bent, naturally) that they are, to all intents and purposes, completely out of control. Sumantra Ghoshal and Heike Bruch drew attention to this problem in a 2002 HBR article in which they said that only 10% of managers spent their time in a purposeful, reflective manner - you could allow them to be out on this number by any reasonable factor you like and it would still make you read it twice to check your eyes weren't tricking you.
Similarly, I see so many training courses skinnied down to the basics because of a fear of productivity loss back at the workplace. Training itself becomes a series of highly structured activities strung together over a shortened program, with little or no reflection time involved. No surprise that the retention rate and application of workplace learning is, all too often, pitifully low.
How about we decide to make reflection a major part of our working lives? Imagine if each employee had to write down what they had learned in the past year in preparing for their performance evaluation? What if CEOs started to spend 15 minutes at the end of each day asking themselves 'What did I learn today and what could I have done better?', and then encouraged their subordinates to do the same? I would guess that we would improve performance, increase adaptability, get more control over how we spent our time and even start to enjoy our jobs more. Not a bad combination of corporate and self interest. Think about it.
Monday, April 13, 2009
Revisiting the Shamrock Organization
The New York Times on Sunday reported that many top dogs in financial services are deserting the big banks and moving into smaller entities such as hedge funds and other investment vehicles where there may be less restrictions on pay (particularly for those currently in institutions taking government money) and the regulatory environment may be less tight. We hardly needed more proof that there is little loyalty to financial institutions beyond the size of the pay packet, so no need to ponder that further here. The NYT goes on to speculate that this may be a good thing, because it means that risk will be spread across many more institutions compared to the high concentration that characterized the run up to the current crisis.
I also wonder if this is not a further acceleration of a more general shift towards smaller firms becoming the innovators, the most attractive employers and mainstays of the wider economy in future. We see big pharma forming partnerships with biotech companies, a proliferation of small technology start ups, Porsche and other car companies (successful and unsuccessful ones) highly dependent on a network of smaller suppliers. The media world is full of small scale on-line businesses, freelance production companies, and small music labels.
Charles Handy, back in 1989, talked about the Shamrock organization as one of three evolving models for structuring companies, with a much bigger proportion of the workforce either freelancing or working with smaller firms who, in turn, perform short term contracts for other companies.
With the loyalty link between employer and employee even further frayed by the mass layoffs of the current environment, we have a situation in which the desire for individuals to reduce their own risk profile through lessened dependence on a single employer, is simultaneously coupled with the economic need for companies to be much more able to adapt to changing circumstances. So, we would do well to go back and study the prescient Handy once again. If individuals put more effort into figuring out how to develop more flexible, 'portfolio' careers, and companies into evolving leaner, increasingly contractor based structures, we could reduce risk on both sides and maybe start to produce an employment model that is better suited to our times whilst also enabling individuals to feel more in control of their own lives.
I also wonder if this is not a further acceleration of a more general shift towards smaller firms becoming the innovators, the most attractive employers and mainstays of the wider economy in future. We see big pharma forming partnerships with biotech companies, a proliferation of small technology start ups, Porsche and other car companies (successful and unsuccessful ones) highly dependent on a network of smaller suppliers. The media world is full of small scale on-line businesses, freelance production companies, and small music labels.
Charles Handy, back in 1989, talked about the Shamrock organization as one of three evolving models for structuring companies, with a much bigger proportion of the workforce either freelancing or working with smaller firms who, in turn, perform short term contracts for other companies.
With the loyalty link between employer and employee even further frayed by the mass layoffs of the current environment, we have a situation in which the desire for individuals to reduce their own risk profile through lessened dependence on a single employer, is simultaneously coupled with the economic need for companies to be much more able to adapt to changing circumstances. So, we would do well to go back and study the prescient Handy once again. If individuals put more effort into figuring out how to develop more flexible, 'portfolio' careers, and companies into evolving leaner, increasingly contractor based structures, we could reduce risk on both sides and maybe start to produce an employment model that is better suited to our times whilst also enabling individuals to feel more in control of their own lives.
Wednesday, April 8, 2009
Value Added Leadership
In professional services firms, by and large, the partners are expected to be actively productive in the sense that they get involved in content rich activities such as analysis of client issues, development of recommendations, writing articles for publication. In corporate environments, most especially in the larger ones, there often seems to be a different mindset along the lines of 'don't keep a dog and bark yourself' .
Many executives, as they rise through the ranks, seem to do decreasing amounts of productive work. Instead they indulge in the pleasures of doling out work and deciding between choices provided by others. The main mechanism for this form of work is meetings which, for those seeking to make an impression, are always back to back and run from dawn to dusk, conveniently leaving little time to do any real thinking or doing on their own part. John Kotter in his book What Leaders Really Do said that the average general manager only spends about 25% of working time alone (and this is mainly at home or travelling, hardly conducive to quality work), so the opportunity to not do much more than direct and choose is substantial. I think of this as a pyramid principle, where each additional layer adds weight and pressure to the layer below, without doing more than enhance the appearance of the total structure.
Even in these leaner times, where companies are squeezing quarts into pint pots with grim persistence, this pyramid principle does not seem to be diminishing (am I in danger of over mixing my metaphors here?). Although great leaders may be a rare thing, managers who can pass work around and make decisions on the back of others' efforts are two a penny. The leader who can both manage and do is a rarer thing altogether, but in this age of flexible structures and leaner workforces, isn't it time that we expected leaders to do more productive work themselves and be better at devolving responsibilities so that less time is required for 'oversight'? You never know, it might also have some spin off benefits in this world of shortened executive tenure and changing job market expectations in helping keep skills current and relevant to whatever is just around the corner.
Many executives, as they rise through the ranks, seem to do decreasing amounts of productive work. Instead they indulge in the pleasures of doling out work and deciding between choices provided by others. The main mechanism for this form of work is meetings which, for those seeking to make an impression, are always back to back and run from dawn to dusk, conveniently leaving little time to do any real thinking or doing on their own part. John Kotter in his book What Leaders Really Do said that the average general manager only spends about 25% of working time alone (and this is mainly at home or travelling, hardly conducive to quality work), so the opportunity to not do much more than direct and choose is substantial. I think of this as a pyramid principle, where each additional layer adds weight and pressure to the layer below, without doing more than enhance the appearance of the total structure.
Even in these leaner times, where companies are squeezing quarts into pint pots with grim persistence, this pyramid principle does not seem to be diminishing (am I in danger of over mixing my metaphors here?). Although great leaders may be a rare thing, managers who can pass work around and make decisions on the back of others' efforts are two a penny. The leader who can both manage and do is a rarer thing altogether, but in this age of flexible structures and leaner workforces, isn't it time that we expected leaders to do more productive work themselves and be better at devolving responsibilities so that less time is required for 'oversight'? You never know, it might also have some spin off benefits in this world of shortened executive tenure and changing job market expectations in helping keep skills current and relevant to whatever is just around the corner.
Tuesday, April 7, 2009
Friday, March 20, 2009
Using Hindsight in Change Management
Have we all been kidding ourselves for years, trying to make change management a discipline 'owned' by a bunch of organizational behavior/ development specialists? There's been so much written on the subject but despite that, by and large, companies drive through change on the basis of good old project management disciplines, responding to the human issues that arise either through the application of HR policies or by acting on intuitions forged by past experiences. The whole change process is essentially one of trying to get people to behave differently, which means having to figure out a way to manipulate or convince them that something needs to change. The old adage of achieving change one person at a time really isn't true, given that we are all highly susceptible to the influence of those we admire or who surround us. The problem is that it's really difficult to predict the point at which a group-wide change of behavior will take place. People can't even predict how they will feel about what they want for themselves, because of 'miswanting' as the psychologists call it. The drip drip of prods and pushes that finally reached the 'tipping point' when the financial markets decided to exit stage left en masse, or the American people to vote for their first black president was hard to predict right up to the moment they actually happened.
I'm not sure we will ever develop a predictive capability for these complex situations, but we might benefit from taking some lessons from disciplines that grapple with this topic on a big scale, every working day. Possibly the most challenging arena for achieving mass change is in the world of politics. Further down the food chain but nevertheless influential in this regard, we have advertisers who tap into all sorts of human psychology to try and seduce us into buying things we might not otherwise want. These practitioners of change keep plugging away, trying a speech one day, an ad campaign the next, without knowing when and how the tipping point will be reached, but applying one simple rule: keep on trying anything and everything until something substantial shifts in the target population, for better or worse. Once a change has been achieved, one thing that is predictable is that people will claim to have seen it coming because of a wonderful thing called 'hindsight bias'. I wonder if the only practical advice anyone can give to a CEO who is trying to bring about a shift of attitudes and behaviors is to throw the kitchen sink at it, see what happens and then claim victory for any good that results.
I'm not sure we will ever develop a predictive capability for these complex situations, but we might benefit from taking some lessons from disciplines that grapple with this topic on a big scale, every working day. Possibly the most challenging arena for achieving mass change is in the world of politics. Further down the food chain but nevertheless influential in this regard, we have advertisers who tap into all sorts of human psychology to try and seduce us into buying things we might not otherwise want. These practitioners of change keep plugging away, trying a speech one day, an ad campaign the next, without knowing when and how the tipping point will be reached, but applying one simple rule: keep on trying anything and everything until something substantial shifts in the target population, for better or worse. Once a change has been achieved, one thing that is predictable is that people will claim to have seen it coming because of a wonderful thing called 'hindsight bias'. I wonder if the only practical advice anyone can give to a CEO who is trying to bring about a shift of attitudes and behaviors is to throw the kitchen sink at it, see what happens and then claim victory for any good that results.
Monday, February 16, 2009
Whatever Happened to the Idea of Professions?
Sometimes, out of the blue, something gets my goat that on other days wouldn't bother me at all. Today it's those people who self-classify as 'professionals', but whose yardstick of success has only one calibration point - $$$. The number of disciplines that classify themselves as professions has expanded over the years, with my own - management consultancy - being one of the more recent aspirants to that status. When professions first evolved I guess that they were a kind of white collar version of the craft trades, and sought to achieve a delicate balancing act between vocation, expertise , service and making money. Apparently, Max Weber saw them as an admirable form of collective authority, which may strengthen the value of the concept in some people's eyes.
Marvin Bower, the primary force behind the development of McKinsey as a major consultancy was absolutely clear that consulting should be a profession, with service to clients being of primary importance. He believed the money would follow from good work. As an idea it was powerful and, indeed, the firm he devoted himself to over the years is a force to be reckoned with, so maybe the power of the idea actually proved itself in this case. Indeed, the language of client service has been almost universally taken up and imitated by others, including other consultants, marketers, estate agents, in fact it anyone who provides a service to some kind of a client.
Unfortunately, although people love to speak the language of professionalism, it strikes me that many have no emotional sense of what it means or intrinsic commitment to the idea. Sure these folk find their work interesting, and love the challenges presented by the problems they are asked to solve. But if conversations with many of my colleagues are anything to go by, they still have some way to go to live up to the words. Sadly, all too often the first reference many of them make to any client work they have, is the size of the fees involved. It's sad because if fee size drives their focus, then that means the importance of the project to the client is at best secondary, and the question of how interesting or stimulating the challenge is also comes further down the list of interests.
If we accept for one (disputable) moment that consultants generally pride themselves on the quality of their experience and intellectual capabilities, then this represents a disappointing perspective on what happens to the idea of professionalism when confronted by the desire and opportunity for financial gain. We might expect it of our bankers, but it's sad to think that the original values of professionalism may all be following the same direction and undermining the opportunity for the special satisfactions that can come from developing rare skills and deploying them on behalf of a client who can benefit from them.
Marvin Bower, the primary force behind the development of McKinsey as a major consultancy was absolutely clear that consulting should be a profession, with service to clients being of primary importance. He believed the money would follow from good work. As an idea it was powerful and, indeed, the firm he devoted himself to over the years is a force to be reckoned with, so maybe the power of the idea actually proved itself in this case. Indeed, the language of client service has been almost universally taken up and imitated by others, including other consultants, marketers, estate agents, in fact it anyone who provides a service to some kind of a client.
Unfortunately, although people love to speak the language of professionalism, it strikes me that many have no emotional sense of what it means or intrinsic commitment to the idea. Sure these folk find their work interesting, and love the challenges presented by the problems they are asked to solve. But if conversations with many of my colleagues are anything to go by, they still have some way to go to live up to the words. Sadly, all too often the first reference many of them make to any client work they have, is the size of the fees involved. It's sad because if fee size drives their focus, then that means the importance of the project to the client is at best secondary, and the question of how interesting or stimulating the challenge is also comes further down the list of interests.
If we accept for one (disputable) moment that consultants generally pride themselves on the quality of their experience and intellectual capabilities, then this represents a disappointing perspective on what happens to the idea of professionalism when confronted by the desire and opportunity for financial gain. We might expect it of our bankers, but it's sad to think that the original values of professionalism may all be following the same direction and undermining the opportunity for the special satisfactions that can come from developing rare skills and deploying them on behalf of a client who can benefit from them.
Wednesday, January 28, 2009
Losing it, Big Time
Bernie Ebbers goes crazy for shower curtains, John Thain thinks it’s entirely reasonable to spend a million dollars on doing up his office while laying off people whose lives haven’t been cushioned by the same level of riches that he has accumulated, Madoff convinces himself that it’s ok to call up friends asking for a bailout, putting their wealth at risk in order to dig himself out of a bottomless pit. You have to wonder what is going on in the minds of these people that enables them to justify it to themselves.
There is a school of thought in psychology known as constructivism, which casts some ordered light on the subject. Jean Piaget (best known for his work on child development) explained how the processes of accommodation and assimilation enable individuals to construct new knowledge from their experiences. This enables them to change their perceptions to better fit the world around them. This can work in a positive direction, but clearly in these cases we see how the absence of sufficient exposure to most peoples’ world distorts their sense of what is ‘normal’, rendering them incapable of understanding why so many are incredulous at their insatiable appetite for material one upmanship.
The British psychologist and writer Oliver James quotes some interesting stats showing how with increasing income inequality the level of emotional stress in society goes up, so these individuals may just be symptoms of a wider malaise, but surely still accountable in some way. Maybe we should, as Maureen Dowd says, ‘Bring on the shackles. Let the show trials begin’, or perhaps we can use psychology to avert similar problems in future. We should insist on our senior executives spending regular periods of time living and working with normal or disadvantaged people in order to keep them in touch with the real world. Maybe they should also spend time in their sales departments as regular sales folk, to remind them just how hard it is to generate the million dollars of profit that they just spent on some foible.
There is a school of thought in psychology known as constructivism, which casts some ordered light on the subject. Jean Piaget (best known for his work on child development) explained how the processes of accommodation and assimilation enable individuals to construct new knowledge from their experiences. This enables them to change their perceptions to better fit the world around them. This can work in a positive direction, but clearly in these cases we see how the absence of sufficient exposure to most peoples’ world distorts their sense of what is ‘normal’, rendering them incapable of understanding why so many are incredulous at their insatiable appetite for material one upmanship.
The British psychologist and writer Oliver James quotes some interesting stats showing how with increasing income inequality the level of emotional stress in society goes up, so these individuals may just be symptoms of a wider malaise, but surely still accountable in some way. Maybe we should, as Maureen Dowd says, ‘Bring on the shackles. Let the show trials begin’, or perhaps we can use psychology to avert similar problems in future. We should insist on our senior executives spending regular periods of time living and working with normal or disadvantaged people in order to keep them in touch with the real world. Maybe they should also spend time in their sales departments as regular sales folk, to remind them just how hard it is to generate the million dollars of profit that they just spent on some foible.
Thursday, January 1, 2009
If in doubt, change the structure
Announcing some personnel changes today,
"The company [Dell] said the moves were part of an effort to reorganize the company around global market segments. Dell said it was reorganizing three of its four major product segments — large corporations, small and medium-size businesses, and other institutions like government — into global entities. The company said the change would allow faster development and deployment of standardized products across the world.
The company’s fourth major product group, which focuses on the consumer market, already operates globally."
Assuredly, this must have followed much deliberation and analysis, but it may also reflect the common response in business to changes in conditions: when in doubt, change the structure. If you look around the world of business, you can find any number of structural permutations, and you would probably find that there is little or no correlation between structure and success at a sector level. What does this tell us? I think we can deduce that:
- Structure is personal - it responds to a CEO's personal predispositions and the company's specific business and sociological needs at a point in time (so benchmarking probably isn't going to get you very far)
- Any given structure is less important than the act of changing structures which refocuses attention on what is being done and how (so maybe minor changes can be as effective as major disruptions?)
- The way you organize is more about the capacity and capabilities of your resources than because any given structure is particularly right (so focus on building capacity and capabilities more than on perfecting your structures).
In what will be a tough year for most companies, it may make sense to focus on multiple tweaks rather than big disruptive change and paying more attention to what our leaders are doing rather than what they are controlling.
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