Spot the Crisis

Reports show the US economy shrank 0.5% in the 3rd quarter. This means if you were used to earning $10,000 / quarter now you would only have $9,950.

Why is this is a crisis?

It's because there is something fundamentally wrong with the type of fiat currency we use.
(see Bernard Lietaer's The Future of Money)

History Majors vs. MBAs

According to an article by Liar's Poker author Michael Lewis, it was Meredith Whitney who on October 31, 2007 recognized that "Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust." This insight "shaved $369 billion off the value of financial firms in the market."

Whitney is a history grad and this reminds us why we should hire more liberal arts grads and fewer engineers, accountants and MBAs.

People in professional disciplines are taught a small set of powerful analytical tools. They are exposed to many problems in their education, but only those problems that can attacked with those tools. As a result they end up with a very narrow world view and are easily fooled. Why is it that some economists think heroin addiction is a rational choice and trying to discourage it would make people worse off? (see the soon to be published Free Market Madness by Peter Ubel) It's because they've been so highly indoctrinated in a specific analytical method they've lost the ability to think.

Those educated in the humanities/liberal arts are taught to inquire deeply about the nature of very complex and ambiguous things. These are the people you need on your staff.

Now, I'm an MBA so I have seen the dark side (although I went to an MBA school where we learned more about telling jokes and putting hockey sticks across conveyor belts than about obscure financial theory). However, somewhere in my informal education I picked up a fair bit about the humanities as do many engineers, lawyers and perhaps even some accountants.

If you think the future will be uncertain, complex and ambiguous then you want to hire people who through their formal or informal education have been taught to understand such things.

Taylorization in US Hotels

US hotels are strange places. The staff say all the right things but somehow the service feels second rate—at least compared to Asia. You look into the eyes of US service staff and you don’t really see a person there.

Asia's different. I remember complimenting a staff member at the Ritz-Carleton in Kuala Lumpur and he said, “Well, we see ourselves as ladies and gentlemen, serving ladies and gentlemen.” The way he said it made it sound like it was something he thought up himself, not a corporate slogan. And this reflects a common experience in Asian hotels—staff who seem completely committed to delivering on the hotel’s values.

In the US service quality is mixed but even when the actual service is fine it feels wooden. Someone looks at you, smiles (thinking, “Ok, that was step 1, now step 2”) “Welcome to X hotel, how can I help you today?” If you have a complaint or problem they are nice but it sounds like they’re reading from a script—probably because they are.

There is this idea that smart people in headquarters can study a job and then tell lowly workers how to perform it. That was Fredrick Taylor idea for manufacturing and it has made its way into the service industry. The idea is not without some merit, but there is subtle distinction between providing training to bring out the best in people and trying to turn people into machines.

Starbucks provides the counter-example in the US (and abroad). In Starbucks you get trained staff who offer good service, but you feel like you are dealing with a human following their own volition, not someone following a program.

Taylorization is not the right approach for a society. HR leaders need to make the subtle shifts in training and reward systems so that we don’t turn people into robots.

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P.S. In Europe it’s quite different. In European hotels the staff are your equals, not your servants. How you are treated depends on their mood and their opinion of you. This is not always a recipe for the best service but it is human through and through.

Naivety vs. Experience

We all like to hear stories about how an outsider was successful with an innovative idea and they claim "I was too naive to know my idea couldn't work - ha ha". These stories are common mainly because we like them, but also because they really do happen. Experienced people learn the accepted way of doing things and are hesitant to innovate, in particular they are hesitant to take on wild ideas that will probably fail. So there is value bringing outsiders into projects who can see possibilities experienced people dismiss--and which outsiders can pursue them without ruining an established reputation.

However, let's not be too quick to lionize the outsider. What I see more often than great out-of-the-box ideas is outsiders inventing a mundane approach that experienced people know won't have impact. An outsider is more likely to re-invent an old mediocre idea than a fresh excellent one.

The trick is drawing on the strengths of both insiders and outsiders. For example, getting the experienced people to kill ideas if they are mediocre already-in-the-box ideas and not toss out wild, improbably out-of-the-box ideas that might actually work.

Valuing Questions

Many people have noted that asking the right questions is often a more critical skill than coming up with the right answers. For example, if back in the 1990s Kodak was asking "How do we build our market share in the film business?" then that question wouldn't have been nearly as useful as "What is digital photography going to do to this industry?"

However, the value of questions goes beyond that. There are questions with no firm answers like "What is the right balance between rewarding the team and rewarding the individuals on the team?" The value of the question is that it keeps this polarity or predicament clear in our mind so that we continue to manage it.

Peter Block probably goes further than even this in valuing questions for their own sake. He likes the question "How valuable an experience do you plan for this to be?" Here it is not so much about the answer or even keeping an important predicament in mind, it's about changing the relationship between presenter and participant. It is a kind of speech act that has force rather than just conveying information. It puts the onus of creating value on the participant not just the presenter.

So there we have 3 different ways questions can be of more importance than answers, perhaps you can think of more.

Carat Blunder

If you've ever made a dumb HR mistake you'll feel better after reading what Carat's Chief People Officer did. She accidentally sent out news of an impending layoff to all the agency's employees.

Ad Age Story

It's a mess-up but perhaps the outcome will not be bad. There is no good way to announce layoffs. After employees get over the initial shock they may be in no worse a mood than if the communication had unrolled as planned.

Intangibles / Social Economics

I wanted to say to someone "I'll discuss the economics of this later". I hesitated because most of the 'economics' of the matter was in improving public relations, networking, and self-development. There was a good deal of value being discussed, but largely intangible. To frame the topic as a discussion about economics would send us down the unhelpful path of treating the deal as accountants not businessmen.

So I changed the phrase to "I'll discuss the social economics of this later."

Is this tidbit worth sharing? I'm not sure. But it seems an easy turn of phrase to build into our existing business language. Imagine you are making a business case for new HR software. If you say, "And now let's talk about the social economics..." or have a part of the written business case titled "Social Economics", then it firmly puts intangibles right in the discussion on par with accounting.

In these discussions make sure you keep all the usual accounting stuff, but have it in the context of all the intangible value being created.

Un Transformational Leadership

I once assisted Nancy Nazer on an article about untranformational leadership. It included, or at least implied, the rather obvious observation that transformational leadership programs were a rather unlikely thing. What is the chance that you are going to take a manager, put them through a one or two day program, and have them come out transformed?

Nancy went on to talk about the design of a saner, longer term approach to leadership development, but I want to go in a different direction here. I wonder why the rather strange notion of transformational leadership would develop at all. I used to attribute it solely to the demands of marketing—someone offering transformation would have a better chance of selling their program than someone promising that their course might lead to modest improvements. However, on reading Charles Taylor’s A Secular Age I notice something new.

Unlike the established Catholic orders of Europe where one would simply be born into the church and the church would universally be the bedrock of society, there is, particularly in the United States, a Protestant approach which encourages transformation. The sinner, quite possibly a man spending too much time at the tavern gambling with his buddies, would find salvation through a transformational experience and become a sober family man and disciplined citizen. This can happen because they really do want to change and because there really are two reasonably distinct modes of life.

Thus, transformational leadership courses may find some of their acceptance because a society has already bought into this idea of transformation. It would be interesting to see whether established Catholic or Buddhist countries would be as eager to embrace transformational leadership courses as Americans are.

People generally hate it when you take what to them is a simple idea, “Please take my leadership course”, and embed it in a historical-social context. But if one ever wondered why a certain business practice seems normal one place and absurd another then it is precisely in these historical-social factors that you find the answers.

On a more practical level if, as a business person, you find the idea of transformational leadership appealing you need to ask whether that appeal comes from a sober judgement of the effectiveness of this sort of program or from a more general attraction to the idea of transformation.

Most of business thinking is focused on straightforward facts immediately at hand but one can’t help but hope that thinking grounded in the great sweep of history would at least on occasion provide robust insights otherwise unavailable.

Pilots cleverly avoiding training (spot the villain)

This very short posting by David Gurteen is a must read. It describes how pilots cleverly avoid some compulsory e-learning.

The trick for HR is to find the villain.

Is it:
a) lazy pilots who are undermining the company
b) people who design/implement poor e-learning
c) trainers who don't check what learners think of the training
d) management who force trainers to implement training programs that look good on paper without really caring if they accomplish anything.

I'm going to take the generous assumption that everyone is trying to do their best.
So I assume the pilots are right, the training is pointless.
The trainers did their best but didn't have the budget or mandate to do better training needs analysis or training design or follow up to check if it is really working.
Management is under pressure to make the numbers/look good and simply shrug this off as one of those things that they don't have time to fix.

What is the solution?

It is easy to think of specific solutions -- in this case it may just be canceling the training.

One can also think of more general solutions -- insist on proper evaluation of the effectiveness of training (even a 'happy sheet' in this case would have revealed the problem...certainly a few phone calls to the pilots would have).

However, what most interests me are the general forces that lead employees to do the wrong things. One can imagine that if the trainers came back and said "Hey we found out the training isn't working" that no one would have said "Good job!" All the way up the org the discovery would have been perceived as a headache.

Strangely I think they may need a less performance driven culture if they want higher performance. Trainers need to be confident saying "We didn't achieve the objective for that program, let's try something else." HR needs to know jobs or bonuses or budgets are not going to be lost because they are being honest.

The only way to get there is to have time for managers to discuss these sorts of issues to get at root causes. This is not a one off event. Managers need to be meeting quite regularly to discuss what goes right around here, what goes wrong, how are our systems working against us, how can we avoid being stupid? This is how you build an effective culture.

Taking time to invest in maintaining an effective culture is out of sync with the heavy short term performance orientation we see in many companies. But if you want high performance you have to focus a little less on performance and a little more on the overall conditions that lead people to behave in smart honest ways.

Confident Managers

Imagine the question is "Where is the stapler?"

Someone says "It might be on John's desk"

Someone else says "It is in the coffee room, I'm positive."

Who do you believe?

This works fine for staplers but confident managers are one of the most dangerous seductions of the business world.

When it comes to business strategy or tactics no well-informed person ever feels "I'm positive." They know there are many uncertainties. We ought to reach the common understanding that great confidence is a red flag.

There are many subtleties to this. You want your coach saying "I know you guys can win" even when the evidence is clearly against that prediction. However, the notion of a red flag remains valid. If someone is confident they know the truth on complex matters, you should begin to doubt them.

Doug passes on the quote:

"The view that truth is found and that ignorance and error are at an
end is one of the most potent seductions there is. Supposing it is
believed, then the will to examination, investigation, caution,
experiment is paralyzed: it can even count as criminal, namely as
doubt concerning truth--Truth is therefore more fateful than error and
ignorance, because it cuts off the forces that work toward
enlightenment and knowledge."(1888)

Can you identify the author?

Adolescents

I recently looked at two books on raising teenagers. To oversimplify:

-one said that we make the mistake of encouraging teenager independence, treating them like adults when they are actually still kids who need our guidance.

- the other said we make the mistake of discouraging teenage independence, treating them like kids when they are actually adults who need their freedom.

This sort of contradictory advice is common in management and that's what I've been exploring in a number of these blog entries. The natural reaction is to argue for one side or the other (or just to, like Hollywood, decide no one knows anything).

But Dave Crisp's reaction was right "Ah, they've identified the issue!"

If we look at it as an issue to be explored not a choice to be decided we will be much better off. As always we can start by asking "What are the dynamics?"

My intent is not to discuss parenting but to explore how to approach this sort of paradox/polarity that we run into so often. In this case, having identified the issue we might think:
- what aspects of life ought to be independent and which ought to be dependent?
- how does this evolve over time?
- how does one assess if the balance is correct for any given aspect at any given time?
- what tactics/approaches will make a teenager more dependent, less dependent -- what are the levers?

This may all seem self-evident, but the truth is we often get into unhelpful debates where we chose a side rather than diving into an exploration that does not presume either polarity is correct. (for more see Johnson's book on Polarity Mgmt)

The Sift for Talent

Consultants love talking about the war for talent because it implies that companies should hire them to help. However, I don't think companies experience the world that way. It's not so common that a company interviews people for a job and then finds their top choices turn them down because someone else made a better offer (university recruiting may be an exception). More commonly, they sift through mounds of applications and try to find someone suitable, usually ending up with an ok new hire but not a star.

The problem is not battling against a competitor but sifting through a piles of sand to find the gold nugget. The war metaphor doesn't work.

So consultants might want to give the war metaphor a rest. Talent is important, but it doesn't feel like a war, it just feels like a long slog.

McKinsey Changes their Mind

In the McKinsey Quarterly 2008 #1, there is an article by Matthew Guthridge et al. called Making Talent a Strategic Priority.

They note that the original war for talent work "made a strong case for emphasizing recruitment and retention of a company's A players" then go on to say "what's much clearer today... is that organizations can't afford to neglect the contributions of other employees."

They go on to note criticism of the original recommendation to focus on A players. The criticism boils down to the fact that if you lavish attention on the top 20% you piss off the other 80%.

So McKinsey appears to have changed their mind on A players. Does this mean HR should now go to management and say, 'forget the A players, we're now being inclusive'?

There are good arguments for that but then someone will trot out the old arguments in favour of A players and those can still sound convincing. So what do we do?

The problem is that we are treating the problem as a simple choice (focus on A players or not) when the situation is more complex. When this issue comes up, rather than get into an argument over the pros and cons of each talent strategy HR should take the discussion to a different level by saying, "Let's look at the dynamics of this."

In fact, for HR, "Let's look at the dynamics of this" is always a pretty good opening line, even if you have no idea what you are going to say next.

One of the key dynamics here is that every time you focus on A players you piss off the B players so you need to judge every action in terms of the balance. You don' t want to give up on the concept of A players, but you do want to weigh every action and tune it so that the overall dynamic is optimal.

Helen Handfield-Jones, one of the original authors of the War for Talent, has since explained that the dynamic plays out differently in different sorts of job. She says her original focus was on the top 50-100 players in a large corporation. For this group you can and should push the A player focus harder than you would lower down in the ranks. It's a bit like professional hockey players in the NHL knowing they will be held to ruthlessly high standards whereas in the junior leagues you just want to give everyone a chance to play their best.

The key point is to lift the debate to a higher level of analysis and not get trapped in a nasty argument. If HR routinely shows they are able to bring the discussion to a higher, more systematic level they will have more impact on the organization.

Emergent Strategy, Systems Thinking

In my previous entry I noted how an appreciative inquiry approach allowed one to benefit from complex systems without necessarily understanding how they worked. Emergent strategy is similar. (If you are interested in strategy in all its forms see Strategy Safari by Henry Mintzberg.)

Most approaches to strategy presume one can figure out what is going on in the complex system of your organization and the marketplace and then plan accordingly. Emergent strategy is more a matter of learning by doing and seeing what works. You may not understand the complex system enough to know why an emergent strategy is working, but that may not matter so much since you do know that it is working.


David
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Problems, Systems Thinking, Appreciative Inquiry

We should be suspect whenever someone points out a problem with some organizational system. For example, someone noting that the centralized recruiting team is not in close touch with the business units--with the implication that we should decentralize.

The "problem-centric" approach generally pays too little attention that any organizational system (program/policy/process/design) has many pros and cons. If you change the system to fix the problem you are just migrating to a different system with its own pros and cons.

Senge of course is famous for encouraging systems thinking but it can be hard in daily mgmt life to use his ideas. A simplified approach is found in Barry Johnson's "Managing Polarities". The basic idea is that if we simply recognize that what we are dealing with in organizational systems are polarities to be managed, not problems to be solved then we are less likely to get into passionate but pointless arguments or worse, swing wildly between different systems forever focusing on the problems each one produces.

(I remember Farouk in Hay Malaysia telling me "In HR you can't solve problems, you can only move them around.")

However, my thought of the day is just to note how Appreciate Inquiry (AI) is inherently more systems friendly. You might think it just inverses the narrow "look for problem" view with an equally narrow "look for success" view. However, what's different is that the problem-centric view encourages often uninformed tampering with a system, whereas AI seeks to extend existing systems.

AI may not consciously understand systems any better than those who are problem-centric but they don't have to, they just try to nurture the thing that works even if they may not understand why it works.

Part timer employees

I was struck by a line in a paper by James E. Martin and Robert R. Sinclair

"These findings fit the proposition that [part time] workers have better attitudes than do [full time] workers because of their limited exposure to the organization."

It rings true, but feels rather sad. Does it imply we should limit the exposure of full timers to the organization?


REF: A typology of the part-time workforce: Differences on job attitudes and turnover James E. Martin and Robert R. Sinclair Journal of Occupational and Organizational Psychology (2007), 80, 301–319

(my) Nissan Diversity Project Wins Award

While my role was small, I'm very proud to see Nissan winning the 2008 Catalyst award for their work on gender diversity. They are the first Japanese company to win this award and the advancement of women into managerial roles is a national issue in Japan, not just a company specific one.

I'm impressed that Nissan is making a significant effort on this despite the pressing short-term concerns of the the punishingly competitive auto industry. The full payoff--a lot of new female talent in the company--won't be realized for years; so this is an inspiring example of managing for the long run.

It's quite odd that I should be involved in selling a diversity project in Japan. Diversity is not my primary expertise, I don't have an office in Japan, and I don't speak the language. However, it was a matter of being friends with great Japanese consultants (Minori), a leading expert on diversity (Barbara Annis) and being in Tokyo due to my work with Recruit's Works Institute think tank. I just happened to be in the place to put the pieces together. It's non-linear, but it's a demonstration of the power of a business model that is based on nurturing resources.

The core aspect of the program was changing the mindset of traditional male Japanese managers so that they could understand the upside of diversity and how to make it work in practice.

(P.S. The photo is of Nissan's Pivot concept car, and no sadly I didn't design the car, I just helped get the diversity project off the ground. Perhaps one day a woman engineer at Nissan will design a great car and I will think, 'Gee I had a tiny but recognizable role in the causal web that led to that.')