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Meetings and Decisions
Orgs of people exist for a purpose. In order to continuously fulfill the org’s purpose in a changing external environment, its members need to make decisions regarding what to do and when to do it in order to counter unfavorable changes that are at odds with the org’s purpose. Since people need to know who will do what, when they’ll do it, and how they’ll coordinate with others to collectively counter external threats, decision-making meetings are held at all levels to decide such issues of importance.
The figure below introduces the Decision-To-Meeting-Ratio (DETMER) metric. It also shows the divergence of this metric for two competing orgs who initially had the same DETMER value at an arbitrary time, T=0. Assuming (and it’s a bad assumption) that all decisions made at each meeting are effective, as the DETMER goes to zero nothing changes for the good within the org walls. People do the same thing everyday, even as the environmental conditions outside the walls relentlessly change. Voila, a bureaucracy led by a cadre of Bozeltines emerges. Bummer.
Us And Them
Poor org leaders, or SCOLs, either maintain a stratified “Us And Them” (UAT) line in their orgs or worse – they purposefully create one. By hiring clones of themselves, multiple UAT lines of demarcation appear; choking off open, honest, inter-layer communication and breeding mistrust and disrespect.
Great leaders, or PHORs, skillfully obliterate UAT lines where they exist, or they heroically prevent UAT lines from arising in the first place. Of course, that’s what makes them great leaders.
Why Do You Guys Suck?
In this Gary Hamel post, Extreme Management Makeover, Mr. Hamel tells the story of HCL Technologies CEO Vineet Nayar’s passionate effort to turn his company’s culture upside down. Read the article to discover the slew of wildly unorthodox actions that Vineet executed to achieve his goal. As a sampling of Mr. Nayer’s courage and determination to buck the status quo, check this one out:
HCLT employees are able to rate the performance of any manager whose decisions impact their work lives, and to do so anonymously. These ratings are published online and can be viewed by anyone who has submitted a review. This visibility challenges managers to be more responsive and exercise their authority judiciously. The number and organizational scope of the reviews a manager receives are also a good indicator of an individual’s zone of influence—is he or she adding value across a wide swath of the company, or only within a narrow sphere? Importantly, this “feedforward” process isn’t connected to compensation and promotion decisions. It is purely developmental. Nevertheless, there aren’t many hiding places left at HCLT for mediocre managers.
Want another zinger?
Early on, Vineet and his leadership team set up an online forum and encouraged employees to ask tough questions and offer honest feedback. Nothing was censored on the “U&I” site; every post, however virulent, was displayed for the entire company to see. Vineet recalls that in the beginning, “virtually 100% of the questions were dirty questions. ‘Why do you guys suck?’ ‘Why does your strategy suck?’ ‘Why aren’t you living up to your values?’’ While some managers bemoaned the fact that all of the company’s soiled laundry was now online, employees lauded the forum as a symbol of HCLT’s commitment to transparency and as another way to hold top management accountable. The U&I portal had another value: it was also an early warning system for critical issues facing the company.
Does your company even have a DICforce-to-management U&I portal? If you’re lucky enough to have one, is it anonymous and uncensored so that the submitted questions are more than just cream puffs?
If Vineet was in any position other than the CEO, do you think his idea of “employees first, customers second” would have any chance at all of being heard, let alone being placed into execution? Do you think managers in general explore the landscape for innovative management practices and weird, heretical companies like HCLT, Zappos.com, SAS Institute, SEMCO, et al?
Much To Like
There’s much to like in Zappos.com CEO Tony Hsieh’s new book: “Delivering Happiness“. In addition to detailing the inspiring rags-to-riches Zappos.com story, Mr. “Chez” shares many nuggets of wisdom that he discovered along the way:
Don’t play games that you don’t understand, even if you see lots of other people making money from them.
It doesn’t matter how flawlessly a business is executed if it’s in the wrong business or if it’s in too small of a market.
Without conscious and deliberate effort, inertia always wins.
The presentation of the truth is as important as the truth.
Never outsource your core competency. If we were trying to be about customer service, we knew that we shouldn’t be outsourcing that (call center).
Without a separation of work and life, it’s remarkable how values can be exactly the same.
Don’t measure call times, don’t force employees to upsell, and don’t use scripts.
A key ingredient in strong relationships is to develop emotional connections.
It’s not what you say or do, but how you make people feel that matters the most.
For individuals, character is destiny. For organizations, culture is destiny.
As it turns out, many of the best ideas came about while having drinks at a local bar.
Extended Business Model
In Zappos.com CEO Tony Hsieh’s new book: “Delivering Happiness“, Tony describes the original Zappos.com business model as “drop-ship”. As the UML sequence diagram below shows, a customer would place an order at the Zappos.com website, Zappos would relay the order directly to the shoe manufacturer’s warehouse, and the order would be fulfilled and shipped directly from ground zero. It was a low cost model for Zappos, but it limited sales growth since many shoe manufacturers didn’t have the information systems in place to execute their end of the model. In addition, sales were limited to the inventory that warehouses held in storage, not necessarily what Zappos’ customers wanted.
During the initial stage of growth, Zappos.com was often short on cash (surprise!) and often just a month or two away from goin’ kaput (surprise, again!). The Zapponians needed to increase sales in order to increase cash flow. During a brainstorming session in a local bar (not in a committee of BMs, CCRATS, BOOGLs, consultants, and other self-important dudes) they came up with the idea of extending their existing business model.
Man creates by projection, nature creates by extension – Unknown
The sequence diagram below shows the extended business model that Tony “chez” et al decided to move toward. In a nutshell, Zappos would purchase or lease a warehouse and stock its own inventory based on trend information extracted from its website. As simple as it looks, the devil is in the details. Buy and read the book to learn how they pulled it off – despite being cash poor and close to going tits-up.
If changing our business model is what’s going to save us, then we need to embrace and drive change. – Tony Hsieh
How many times have you heard or spoken the “embrace change” words above but never experienced or executed any follow through?
A Blessing And A Curse
The figure below depicts a UML class diagram model of the static structure of a typical Wiki system. A Wiki may be comprised of many personally controlled and/or global workspaces. Each logical workspace is composed of user created work pages and news items (a.k.a. blog posts). Lastly, a Wiki contains many user accounts that are either created by the users themselves or, in a more controlled environment, created by a gatekeeper system administrator. Without an account, a user cannot contribute content to the Wiki database.
Org Wikis are both a blessing and a curse. They’re a blessing for the DICforce in that they allow for close collaboration and rapid, real-time information exchange between and across teams. They also serve as an easily searchable and publicly visible record of org history.
In malevolent and stovepiped CCHs where SCOLs and BOOGLs rarely communicate horizontally and, even more rarely, downward to the DICforce, Wikis are a curse because….
Networks make organizational culture and politics explicit. – Michael Schrage
BOOGLs and SCOLs that preside over malevolent CCHs don’t like having their day-to-day operational behavior exposed to the light of day. If a malevolent CCH org is liberal enough to “approve” of Wiki usage, chances are that none of the BOOGLs or SCOLs will contribute to its content. In the worse case, a Wiki police force may be established to enforce posting rules designed to keep politics and positioning behavior secret. Hell, without censorship, the DICforce might form the opinion that they are being led by a gang of thugs who are out for themselves instead of the lasting well being of the org.
Are you here to build a career or to build an organization? – Peter Block
My Leadership Cut
This is the way it is……
Is it the way it should be? Are there any alternatives that could “work”? Are there even any slight variations on this same-old, same-old, scheme that can make it work better compared to the rest of the herd? Nah. No way, right?
Bureaucracy Formation
Since I’m not a big fan of bureaucracies, let’s have some fun and see how these resource sucking and dehumanizing orgs are naturally formed right under the noses of the high paid corpo dudes who are ironically “responsible” for keeping costs down. As you’ll see, it may even be worse than you think. The infallible, know-it-all, multi-titled CGHs in charge not only allow their bureaucracy to flourish, they feed and water it as a result of the unconscious and self-centered need for ego expansion.
Check the figure below out for a hypothetical example of the formation of a bureaucracy over time. As usual, I’ve made the example up (cuz I’m a L’artiste) and I’ve simplistically decomposed a complex org into two group archetypes; product and support. In my obviously wrong dream-world, the otherwise highly esteemed management class is a support group sub-type, of course.
At t=Start, when a vibrant and competent startup org is initialized, there are no “support” groups: nada, zilch. There’s only a product development (or service provider) group that does everything needed to sustain and grow a business around the wealth-creating product (or service).
As time tics by and the fledgling enterprise grows, one support group after another is added as another ring of fat around the product development group core. At the beginning, the support groups are few, and they’re subordinate both in stature and compensation to the wealth creation group because everyone knows that the product and/or service brings home the bacon.
As the org matures, an incredulous flip in the stature structure snaps into place (t=T3 in the example above) because, well, because that’s the way it is. The first of many subsequent support groups to rise in stature is the executive level management cadre. As even more corpo maturation accrues, all emotional enthusiasm and passion is expelled from the org because the same-old, same-old, mechanistic, B-school and Wall Street psychology usurps the childlike and immature “let’s change the world” mindset which birthed the org in the first place. The so-called management leadership cabal catalyzes and accelerates the move to bureaucracy by; treating wealth creators as easily replaceable DICs, punishing any publicly expressed passion and enthusiasm, cloning themselves in newly added middle management layers, and growing their personal empires in order to inflate their pocketbooks and sense of importance at the expense of the org as a whole. Bummer.
“Are you here to build a career or to build an organization?” – Peter Block
Herman Miller’s Design for Growth
Herman Miller Inc, of Aeron chair fame, is a rare breed. They consistently morph with the times and remain profitable in turbulent waters. This article, Herman Miller’s Design for Growth, tells the compelling story of the genesis of a new suite of products named Convia that spawned a brand new subsidiary business.
The terrific strategy + business article not only recounts the technical story behind the convia product line, it tells the story of the innovative management practices employed by the company’s leadership over the lifetime of the company:
The creation of Convia might sound like a tale of pure product innovation, or even of technology adoption, but it is actually a story about management — and only the most recent of several similar stories at Herman Miller. Over many decades, the company has made itself a laboratory for testing new management ideas and turning them into effective practice.
First, the hard evidence that the company is highly successful despite its repeated forays into the unknown:
Herman Miller competes in an industry slammed by arguably the worst commercial real-estate crisis in a generation. Still, despite a 19 percent plunge in sales for fiscal 2009 (ending in May), the US$1.6 billion company reported a $68 million profit, albeit down from $152 million in fiscal 2008. Over the last 10 years, its stock has consistently outperformed the Standard & Poor’s 500 index.
Next, the snippets that yield insights into the off-the-beaten-path management mindset of the company’s leaders:
…two key principles that continue to inform the company’s management approach. One was a commitment to participative management; the other, a problem-solving approach to design.
Max De Pree, CEO from 1980 to 1987, drew broad attention to the culture at Herman Miller by writing the bestselling Leadership Is an Art (Dell, 1990). Of participative management, he wrote: “Each of us, no matter what our rank in the hierarchy may be, has the same rights: to be needed, to be involved, to have a covenantal relationship, to understand the corporation, to affect our destiny, to be accountable, to appeal, to make a commitment.”
He (Brian Walker, the company’s former chief financial officer, who took over as CEO in 2004) wanted everyone at the company to calculate the financial effect of decisions big and small. It didn’t matter if they were involved in buying, selling, building, designing, billing, paying, or financing. Or whether they were charged with controlling quality, reliability, inventory, waste, energy use, scrap, or the kinds of staples people used.
As Long (now director of the corporate HMPS team) toured the file cabinet plant recently, a visitor paused by a welding robot and asked, “Why don’t you use more robots?” “Robots,” Long said, “can’t make themselves better.”
The objective was to have top decision makers invest themselves in the work — to be companions on the journey, not simply judges of it. “The idea,” Miller says, “was to change the dynamic from traditional review-and-approve to advocacy.”
But Walker argued that in the feeble economy, the main goal was to keep the business sustainable, not to increase profitability at the expense of employees.
Walker says he has no regrets about paying people for time not worked, as the program generated a lot of goodwill and credibility for top management.
So, what do you think? Is the image of Herman Miller Inc. different from the stale corpo model entrenched in your brain?
The Art Of Rationalization
A major defense mechanism that all human beings develop over time is the art of rationalization. A perpetrator (like me and you?) of “bad” behavior who doesn’t want to be held accountable for his/her behavior always uses the skill of rationalization to disconnect and distance him/herself from personal feelings of guilt and to convince others that the manifest behavior was “noble and just”. Street smart politicians, corpo managers, so-called leaders, and over-educated experts are extremely clever and highly skilled rationalizers. They’re at the top of Everest.
“Half of the harm that is done in this world is due to people who want to feel important. They do not mean to do harm… They are absorbed in the endless struggle to think well of themselves.” – T. S. Eliot
Hitler is perhaps the ultimate example of a supremely skilled rationalizer. He not only convinced himself that the atrocities he committed against mankind were noble and just, this dude convinced an entire nation so effectively that “his” people deified him. Ominously, in many orgs around the globe, millions of little Hitlers operate unfettered. They perpetrate their “bad” behavior on their fellow human beings while (astonishingly) being rewarded for it. Blech!
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