Archive for the ‘Scalability’ Category
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.
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.
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.
Innovation killers
There are two types of company out there: companies who encourage their mavericks and companies who constrict them until they’re forced out (after months, often years, of long-drawn-out subpar productivity).
There’s a scary tendency in many companies for the best people – those most likely to produce big leaps forward – to do their innovative stuff under the radar, keeping schtum about their latest super-cool project, in case the powers that be stick their ore in and squish it dead before it’s off the ground.
Yes, this is ridiculous.
Yes, this is counter-productive (and counter-common-sense).
Yes, it’s a key reason why the best people leave companies.
Why?
Why?
WHY?
(Fear, fear, FEAR!).
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
Markets are conversations… so what? Part II
Introducing Palindromic Queries
Rory Sutherland on…. Crowdsourcing
A while ago I interviewed Rory Sutherland on all things collaboration, future-of-the-internet, human behaviour…
I’ll chop it up and release as a series of excerpts on various topics. Will try to do one a day.
Here goes… first episode on Crowdsourcing.
Rory Sutherland on… Crowdsourcing from Jane Young on Vimeo.
Copyright ResonanceBlog 2009
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