Archive for the ‘Growth’ Category
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.
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.
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?
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.
The quest for autonomy
Autonomy comes from the Greek word autonomos, meaning (auto) ‘self’ (nomos) ‘law’. It refers to ‘the capacity of a rational individual to make an informed, un-coerced decision’ [Wikipedia].
For some time we’ve known that autonomy is what really makes people happy at work (not money! evidenced here and here). Luckily, enabling people to doing things in a self-guided way is exactly what makes companies most innovative and profitable. Just look at Google engineers, encouraged to take 20% of their time to work on whatever they like; hence Gmail, Google News and even the Google shuttle buses that bring people to work at the company’s headquarters in California.
We all crave the opportunity to work independently on something we’re passionate about.
The trouble is, most of us are confined by hierarchy. Hierarchy comes from the Greek work hierarchia, from hierarches, meaning ‘leader of sacred rites’. This view of leaders as sacred is crippling businesses in the 21st century, creating cultures of subservience and dependency.
Self-governance relies more on cooperation than dependency. Dependency doesn’t rely on cooperation. Most parents will agree 
The difference between equality and subservience comes down to trust. The word ‘trust’ is hugely overused; and many of us operate in an untrusting way with absolutely no awareness of it whatsoever, often perceiving ourselves to be very modern, humane and down-with-the-kids in our management style.
Our inherent lack of trust stems from our perception / interpretation of authority. In school, at home, under law, in the workplace, under government – everywhere we go we’re faced with authority figures who tell us exactly what to do and punish us if we’re out of line.
The trouble is, this interpretation of what an authority figure should be causes people in positions of authority to abuse others – most often not in a dramatic way, but very subtly, for example by using language like ‘passing down’, even the word ‘boss’.
Dependency and boss-like leadership behaviour creates mindless zombies.
If you turn on the news you’ll hear them quoting X billions lost each year due to stress, traffic problems, bad weather… but what about the billions lost (or not gained) by the failure of organisations’ brains to function the vast majority of the time?
We need to change our expectations to resolve this. We need to instill behaviours that result in people being happy; and feeling entitled to happiness – rather than fostering the blind conformity behaviours we’re used to. We should fear losing our jobs if we don’t speak out as opposed to fearing losing them if we do, since we can only be effective if we do what we know is right, given we know our jobs better than anyone else (including our ‘superior’) most of the time. If this degree of trust in our judgment doesn’t exist, why were we hired in the first place?
Treating people as if they have the capability to make the right decisions relies on everyone understanding the business. The ‘higher up’ you sit in an organisation, the bigger picture view you get. You’re zoomed out, able to see the full landscape; while the ants beaver away in their tunnels, with such a narrow area of concern that it’s often constrained to what their ‘superior’ thinks, the order they’ve just been given, or the routines they have to uphold.
Being privy to more information than your team is knowledge-hoarding for power’s sake. If you can sleep at night despite the scary cashflow forecast, what makes you think your staff can’t? Isn’t that treating them like children? Wouldn’t you like them to be focused on getting you out of the hole? Or did you hire brain-dead people who don’t care or won’t understand? Doesn’t that mean you have a much bigger problem?
Need-to-know is the enemy of innovation. If you’re hoarding information, I’d be worried – not only about your organisation’s ability to innovate, but it’s ability to survive.
Machine-age thinking doesn’t match today’s right-brain world. Everyone is an individual unit of production, yes – but now they know it. They can sell their skills themselves. There are tools they can wield, many of them free. If you’re not open to this fluid, fragmented way of working, you’ll miss out on the best people – the ones who know the score and won’t accept anything less than total autonomy.
The dangerous ones are those who won’t accept anything less than total autonomy and are prepared to suffer and live in a box rather than succumb to the zombie-inducing leaders of sacred rites. I think those are called entrepreneurs
From machines to ecosystems
When we talk about thriving in the digital age, we tend to revert to discussing how to leverage social media, mobile and other cool channels. There’s nothing wrong with that (and I do it myself!), but it can be useful to consider the bigger picture now and then.
The challenges we face in business are not related to technology, they’re related to human beings. The industrial revolution brought us machines; and with it linear, machine-age thinking, articulated in machine-age language that in turn makes us think more like machines. This machine metaphor shaped the 20th century. We viewed biology as a big machine, we searched for machine-like predictability in economics and physics – and you could argue that it served us fairly well when we lived in a world that was changing less rapidly, with fewer choices.
However lately we’ve started to realise that our rigid financial forecasts, waterfall development methods and other attempts at predicting what’s likely to work or not work in business and product design are very flawed.
A more useful metaphor for the 21st century is nature. Instead of technology and nature being enemies, I believe our most successful innovations will be like living things. Concepts like self-organisation, co-evolution, emergence and feedback loops are coming to the forefront.
If you look at thriving companies – like Facebook – you can see the characteristics that make them fittest. They’re thriving within millions of systems and sub-systems (i.e. markets). The structure of what they’re creating is all about fluidity, feedback loops, interlinking; people, applications, APIs – lots of iterations and replications.
We need to start focusing on developing traits that make us more likely to be fittest within any given system. Traits include: agility; the ability to replicate; the ability to get undistorted, accurate feedback and a fine balance – between impulse and restraint, competition and cooperation, chaos and order.
Meanwhile, on an individual, personal level, each of us should seek the conditions and environment in which we’re fittest. Nobody is fittest in every situation, so move fluidly through different systems in seek of a place where you thrive; and if energy dissipates (which it always does, according to the 2nd law of thermodynamics!), shift to another system.
If we do things as nature does, we’ll see real progress.
Heaven for mavericks
Ricardo Semler took over his Dad’s Brazilian business, Semco, in the 80s. Semco now employs over 3,000 people in manufacturing, professional services and high-tech.
They increased their annual revenues from $35 million to $165 million between 1994 and 2001.
At its peak, there was a 17-month waiting list for the bi-weekly tour of Semco, as corporate leaders from all over the world clamored for a peek at their magic dust.
Semco has no org chart, no official structure, no business plan, no company strategy, no 3-year or 5-year plan, no mission statement, no standards or practices, no HR department, no job descriptions, no employee contracts, no compulsory meetings, no supervision or monitoring, no rules on where and when people work, not even a fixed CEO.
Their productivity and resilience are second-to-none and staff turnover is ridiculously low, despite the fact they don’t necessarily pay their staff super-high wages.
Why?
Their staff are treated as adults. Adults are capable of understanding the business and making decisions about how, when, why, where and what they do accordingly. If they don’t, there’s a far more fundamental problem. Semco staff aren’t shielded from bad news – they’re actively involved in the direction of the business and take responsibility, at every level. Anyone can participate in a board meeting and the CEO can be voted down by a factory floor worker.
They ask why. Continuous questioning often reveals what a massive amount of time we spend on business autopilot. Why do we wear suits? Why do we have to be here at 9am? Why do we need to come into the office? Why don’t we show clients our cashflow? Three whys normally rinse out dumb autopilot actions.
They manage less. Semco leaders more often than not choose to do nothing. Less is more when it comes to interfering and decision-making. Rather they rely on democracy and trust their people.
There are many other reasons why, but they’re more or less all to do with freedom, democracy, trust and transparency… and casting out age-old mindless rituals and beliefs that serve as barriers to progress. They also recognise that progress and success aren’t necessarily money-related.
It you haven’t read any of Ricardo Semler’s books, they’re worth a look. Check out The Seven-Day Weekend and Maverick.
Although some forward-thinking start-ups do fancy themselves as able to embrace bold values like Ricardo, it takes another sort of steadfast bravery for bigger organisations to drop the ego-massaging hierarchy and cast out deeply ingrained practices in favour of a role as trusting enabler.
As the workforce becomes more fragmented, demanding and self-guided, surely organisations’ only hope of keeping pace, innovating and having a life is to embrace values like these. Values that make the workplace more tolerable for mavericks, i.e. the folk that get stuff done.
Kill false assumptions & evolve
Introducing Palindromic Queries
No straight lines of possibility?
Alan Moore’s recent post is worth a read:
In his article for The Observer – Tony Judt writes,
Something is profoundly wrong with the way we live today. For 30 years we have made a virtue out of the pursuit of material self-interest: indeed, this very pursuit now constitutes whatever remains of our sense of collective purpose. We know what things cost but have no idea what they are worth.
The materialistic and selfish quality of contemporary life is not inherent in the human condition. Much of what appears “natural” today dates from the 1980s: the obsession with wealth creation, the cult of privatisation and the private sector, the growing disparities of rich and poor. And above all the rhetoric which accompanies these: uncritical admiration for unfettered markets, disdain for the public sector, the delusion of endless growth.
Indeed, this is a point of view that I share (here) and (here) and (here), in fact I have written a book about it (video) – Judt’s article goes onto examine the role of the state in the context its enthrallment with all things market driven. And yet we are told whoever comes into power in the UK slash and burn of core pubic sector services is inevitable. And of course this will be done in a manner redolent of the industrial age.
Yet – a networked approach to solving problems can help re-frame our world vision – providing new solutions to once seemingly age old and intractable problems.
Copyright ResonanceBlog 2009
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