Social Business circa 1989
Simple systems thinking
I’ve noticed a recurring trait amongst successful people and organisations: the way they develop systems to guide their actions.
The most innovative, thriving companies are those with clearly defined values that are adhered to religiously. They’re prepared to lose a client, staff member, or product, if they fail to make it past the value system.
Day traders use systems, always looking for their ‘edge’, which is essentially the ability to develop a superior system. The system – a set of rules – guides how much you trade, when you trade and when you stop.
Warren Buffet has always used systems to guide his investment decisions, asking a series of questions before making a move.
All these successful systems developers have something else in common: they continually assess the performance of their systems, adapting them, tuning them and replacing them with more effective ways.
Just as the laws of physics give some constraint to a universe of chaos and complexity, enabling evolution, developing your own simple rules that apply to what you’re doing – that guide your moves – is likely to see your performance go through the roof.
One of my systems employs a bunch of behavioural economics principles to guide my communications – whether I’m designing a user interface or e-commerce journey, writing a presentation, or closing a negotiation. Essentially it’s a checklist of ways I can increase the likelihood decisions and actions will go my way.
It’s worth bearing in mind that simple rules = complex behaviour; and complex rules = stupid behaviour. So try to keep your systems as simple as possible.
Social business? It’s just plain business
Fast is better than slow (loose is better than tight!)
Tight, centralised control mechanisms are super attractive to comfort-seeking humans. The trouble is, they aren’t working.
The tougher the times, the stronger the compulsion to issue reams of rules, legislation and policy. Just look at the state of politics, drinking and drug laws; and long-winded employee handbooks nobody ever reads.
Arse-covering document production lures us into a false sense of security, skews our priorities and often demolishes common sense. We focus on empty words and numbers, lazily neglecting to change people’s behaviour and instigate true culture change beneath the surface. Back offices grow, coal face shrinks (NHS?!) and leaders cover their ears as their people grow distracted, mindless and even corrupt – manipulating old school systems by hitting targets at all cost; and producing results that are often the opposite of what was intended.
Did you know that kids are more likely to be hurt or killed by the deluge of vehicles at the school gates than they are by walking or cycling without adult supervision?
And what about the Independent Parliamentary Standards Authority, created as a result of the MPs’ expenses scandal, at a cost of £6.6m – six times the amount the MPs were forced to repay? (Not to mention the 80 staff and £6m per year needed to keep it going).
The world is suffering from The Control Delusion.
Just as faith in institutions has collapsed; tight, linear, rational models of behaviour have been proven to steer us blindly in the wrong direction. The sharpest leaders are beginning to recognise the challenge we face in business is fundamentally human. What makes people work better? What’s our clockspeed? How can we make it faster? How can we make decisions in real time?
The pace of change in the world is rapid and accelerating. Business is slow as hell. It’s time we took a serious look at reconciling, before the gap gets so wide we all fall in (particularly the big ones).
The only way for a high clockspeed business (i.e. most businesses, except perhaps those with decade-long product lifecycles and long-lasting asset value) to survive, let alone thrive, is to get real and loosen up.
The law of diminishing returns states that the more experience an industry accumulates, the harder and slower it is to take the next incremental step forward. Meanwhile, the network effect tells us that the more you add, the greater the value for everyone. The vast majority of businesses are living with the former state in blissful ignorance, as their lifespan compresses. Those who adopt the latter as a means of doing business – thinking of business as a network, an ecosystem, a loose and flexible organism – are thriving.
If you aren’t investing in developing a loose culture, you’re probably going to wake up one morning soon, buried knee-deep in data, wondering what the hell happened. A flat, decentralised, trust-based, collaborative, loosely networked approach to business will win.
It’s not the big that eat the small, it’s the fast that eat the slow.
Gutless Wonders and the Control Illusion
Ian Davis, previously worldwide MD of McKinsey, once said, “Long-gone is the day of the gut-instinct management style. Today’s business leaders are adopting algorithmic decision-making techniques and using highly sophisticated software to run their organisations.”
An astounding example of the control illusion. Nothing sits better in a crisis than intense rationality. Trouble is, we’re deluding ourselves.
For one thing – as neuroscientist Antonion Damasio proved by studying people with damage to the part of the brain where emotions are generated – decisions are driven by emotions. With our rational brain alone, we’ll just weigh pros and cons until the cows come home.
Although our subconscious is in charge, we insist on living an illusion of conscious choice – simply because it feels so comfortable and alluring. The more chaotic and bewildering the world around us, the more that neat illusion beckons. We duck down, distrust (our people and ourselves), flick the switches to ‘tight control’ mode and abort anything risky, like experimentation.
Now I’m all in favour of data and analytics – in fact metrics are key to agility – but only when the numbers aid creative, whole-brain decision-making. Certainly not at the expensive of good judgement and gut feel.
The world is rife with easy lies that satisfy our control-illusion-fueled thirst for order: putting more people in prison reduces crime; financially incentivising staff improves performance; increasing the price of alcohol reduces drinking; markets are driven by rationality…
It’s yet another lie that gut-instinct management style is replaceable by algorithmic decision-making software.
The truth? The extreme usefulness of technology and data is being massively compromised by misuse. Spending money on software won’t solve our problems, unless we overcome the control illusion and exercise some solid emotional judgement. Half-assed attempts to retrench when the going gets tough hasn’t rendered our leaders any wiser nor more effective.
Has it?
After all, the average life expectancy of a company in the S&P 500 has dropped from 75 years in 1937, to 15 years today. What’s more, the 3/2 law of employee productivity demonstrates that tripling your number of employees causes productivity to drop by half. The reality is that corporate performance has worsened as digital technology has penetrated the economy.
It’s about time we recognised that cultural and structural changes in business are fundamental to making our technology useful. Blindly pumping out numbers is a wasteful business for gutless wonders. Muscle-bound chart-wielders are unable to move.
Instead we need to arm intuitive people with data that aids emotional decision-making, set them free within loose structures and replace ‘if you can’t measure it, don’t do it’ with ‘if you can’t make a decision on it, don’t measure it’.
Then focus on fine-tuning your organisation to enable rapid, decentralised decision-making.
Purposeful experimentation = innovative leaps.
Death by meetings
Imagine a world where you only ever had to have conversations you were actually interested in.
Now think about a recent time when you had to sit through a painful conversation that bored the crap out of you.
I bet you were thinking of a meeting situation. Hmmm. Funny that.
It’s tricky to remember the old days without mobile and email. The days when face-to-face meetings were vital – rigidly planned, with meticulous agendas and clear purpose.
Given this is no longer the case – and the fact we have an abundance of collaboration tools at our disposal – it’s no surprise clinging on to old behaviours is causing mass boredom, frustration and chaos.
It’s a characteristic of this one-foot-in-pre-internet / one-foot-in-post-internet time: the stressmongering that stems from attempting to live in a new way, while clinging onto outdated practices. For example the fact we can work wherever and whenever demands that we’re always-on, but screws us over with a lingering nine to five show-face obligation on top.
Right now we’re bogged down in blinkered workstreams, causing massive delays, endless confusion and inefficiency by holding off for the next meeting… only to leave the meeting with conclusions that could’ve been reached in five minutes. Grrr.
Some of the most hyper-productive, ridiculously fast-paced projects I’ve ever worked on have been with people I’ve never met face-to-face. Yet we’re clinging onto myths about distributed teams.
How’s about experimenting with the Semco approach, where all meetings are optional? What if we acknowledge that meetings are a legacy of pre-mobile, pre-broadband times? What would happen then?
Well obviously it wouldn’t mean we’d stop spending time with people in our vicinity. That would just be weird. And pub strategy rocks.
What it would mean is we’d be freed from agenda-based boredom. If face-to-face interactions were optional, by default they’d be based on enjoyment. They’d be conversational, open and relaxed – optimised for creativity and joy.
Imagine only having conversations you were actually interested in…
Resilience & Adaptability
A while back I posted up this deck on Unleasing Innovation & 21st Century Scale.
Just thought I’d follow up with a new Palindromic Query:
The greater the external influence on something, the more resilient and adaptable it becomes.
Consider children, immune systems, evolution, nano-architecture and the way a plant grows thicker on the surface that’s most exposed to the elements. Consider societies or social groups with least external influence and the affect on their resilience and adaptability.
This is a statement you can apply in multiple contexts that will always result in improvement. The more you unpick, the more obvious and fundamental the concept seems. So I think it definitely qualifies as a Palindromic Query.
Constructing business models, products, services and companies that are inherently exposed to high and increasing levels of external influence – whether through open source / platform components and APIs, or collaborative cultures and partnering approaches – will ensure resilience and adaptability, just as in evolution itself.
How much external influence is enabled in your business or offering? Or does it feel insular, siloed, or stringently controlled and centralised?
Formula for writing books & other complex stuff
This won’t work for everyone, but for you right-brained folks with book-writing aspirations, this simple secret formula could be a game-changer.
The difficulty with writing books is overcoming the ‘where to begin’ barrier, then finding a way to distill and organise masses of complex information into a sensible order. The vast majority of us never fulfill our authorly destinies for exactly these reasons.
Panic not. It isn’t as complex as you think. The core formula for a factual book is:
1. Make a point (what… are you telling your reader)
2. Back it up (why… is that a fact)
3. Apply it (how… can your reader benefit / apply it to their own life)
Or in other words…
STEP 1
Now, for those of you with an iPad, get a free mindmapping app (I’m using Total Recall). On a laptop you could use something like Webspiration. Otherwise pen and paper will do. Make a box in the middle of the page, colour it your favourite colour and write the name of your topic inside.
STEP 2
Create a key, so you can colour code (or use different shaped boxes) for 1. MAKE A POINT, 2. BACK IT UP and 3. APPLY IT. All information you’re going to lay down will fit under these categories.
STEP 3
Start firing all your thoughts down in a mindmap, connecting them where you see a relationship. Use the colour codes for when you’re making a point, backing it up, or applying it. You’ll find most items you get down are MAKE A POINT colour.
STEP 4
When you’ve had enough, go through each MAKE A POINT item, adding and connecting as many BACK IT UP examples and APPLY IT methods to each point as you can. Here’s a section of a complex map as an example…
Build the map out until you feel everything in your brain is more or less down there, organised in this way.
STEP 5
Scan over your entire map, highlighting bubbles that seem particularly significant in another colour. Think of them as chapter headings.
Done.
The linear order of your book will emerge from the non-linear madness on the page, in an instant.
Try it – let me know if it works for you…
It’s My Ass on the Line
When you’re trying to keep up in a fast-changing world, fast is better than slow. Customers expect nothing less than lightning response. Markets demand it. The best people presume it.
Most companies aren’t geared up for this accelerating pace, particularly big ones. The result is lack of innovation and too often, slow death. Sometimes sudden death.
There are loads of reasons for this. Here are a few:
1. ‘It’s my ass on the line’ syndrome.
The biggest symptom of a deep-rooted blame culture, leading to inability to stick your neck out and innovate; time-wasting tip-toeing; and an unhealthy, depressing fear for your livelihood if you try something new.
2. ‘Who owns it?’ syndrome.
If it can’t be slotted into a clean cut category or department, there’s a big freakout about (lack of) governance, despite the fact projects are becoming increasingly holistic rather than departmental. This is closely related to ‘who’s paying’ syndrome – delay-causing argy-bargy between Teflon-shouldered budget holders, none of whom want to pay. Or at least not until next financial year.
3. ‘Don’t tell Marketing’ syndrome
Anyone who’s an innovator feels they have to fly under the radar and do cool things on the sly, instead of shouting them from the rooftops. Nobody learns anything from successes nor failures; gold-dust mavericks go unsupported; and anyone who needs a transparent, holistic view of what’s going on to do their job can’t see a thing.
Some answers…
1. Take the position that you do not do blame, shame, nor regret. Any time you hear a remark along the lines of ‘it’s my ass on the line’, pull up the perpetrator. Remind them that you trust them to decide what to do; that you’ll help them succeed; and that failure is fine, but fail small and fast. Otherwise ‘I’m really passionate about achieving this goal for my own fulfillment’ is replaced by ‘what will my boss think?’, leading to brain-dead zombie syndrome.
2. Put together a cross-functional team; and hire a ‘floater’ (!) who’s responsible for maintaining the group’s transparency, collaboration and forward motion. Hook them up with internal comms and give them collaboration tools. Encourage copious experiments that don’t need big budget approval; but bring budget holders along the journey from the beginning. Make it a strategic objective to ensure everyone in the organisation can connect with everyone else they need to, regardless of rank and role. Apply the same externally.
3. Publicise failures, focusing on lessons learned and next steps. Publicise successes focusing on the people. Recognise mavericks are the lifeblood of forward motion; that they know it; and that you’ll have to work extra hard to feed them or they’ll search for pastures new. Give them resources. Make them superstars. Interview them and post videos all over the place. Make everyone want to be a featured superstar.
Purposeful experimentation = innovative leaps
Wouldn’t it be marvelous if there was a computer simulation that would enable you to test out new, radical business moves. What if you could set it running and see what happens if you abolish set working hours, make all meetings optional, put a bunch of Rail developers in charge of HMRC, or have everyone in your company spend half their time doing whatever they want?
The trouble is, the simulation would never be able to make a true prediction. There are too many variables, too much complexity, too many interconnected happenings and influences, to ever dream of accurately estimating how it’ll pan out. The vast majority of financial forecasts looked at in retrospect betray this insufferable lost cause.
This leaves us with a couple of options:
1. Don’t test out any new, radical business moves and hope doing the usual stuff yields results
or
2. Break down any barriers preventing people from purposefully experimenting. These barriers can be cultural, psychological, financial, social or structural. You won’t spot all of them; nor will any individual. That’s why feedback loops are important.
You might want to begin by making a list of barriers you can see in front of you. Have others add to the list, from all levels in the organisation. If someone demonstrates a particularly deep understanding and passion around a specific barrier, put them in charge of coming up with a plan to dismantle it. Take responsibility for ensuring they’re able to work autonomously and purposefully, measuring the results and sharing the learnings. Make sure they can connect with anyone they need to. Focus on instilling a culture of grownup trust; free from blame, shame and regret.
I’m not saying everyone employed in simulations and forecasts is wasting their time. On the contrary, there’s extreme value in attempting to understand influences, spot patterns and gauge what might happen next.
I’m just saying the only way to consistently and frequently make great innovative leaps is by relentlessly trying, failing, succeeding and discovering for ourselves. Conveniently enough, it also makes for happier, more fulfilling lives all round; not to mention greater profitability.
Copyright ResonanceBlog 2009
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