Archives for posts with tag: Performance

The way we're working isn't working

January 10, 2011 //

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Generally, I record my book reviews on Goodreads but this book by Tony Schwartz was so close to the core mission of BatesHook that I wanted to share it with a wier audience.

The basic premise of the book is: “The furious activity to accomplish more with less exacts a series of silent costs: less capacity for focused attention, less time for any given task, and less opportunity to think reflectively and long term.”

Below are a few of the big ideas that resonated with me:

” Rather than trying to get more out of people, organizations are better served by investing more in them and meeting their multidimensional needs in order to fuel greater engagement and more sustainable high performance.”

“We think of leaders as “chief energy officers.” The core challenge for leaders is to recruit, mobilize, inspire, focus, and regularly refuel the energy of those they lead.”

“Our core emotional need is to feel secure – to be valued and appreciated. The more we feel our value is at risk, the more energy we spend defending it and the less energy we have available to create value.”

“When we default reactively to telling negative stories, we almost invariably assign ourselves the role of victim. It feels better not to blame ourselves for disappointments, but the victim role undermines our power to influence our circumstances. The alternative is to intentionally look for where our responsibility lies in any given situation – and then take remedial action on any part of it that we’re in a position to influence.”

“The key capacities of the right hemisphere – creative and big-picture thinking, openness to learning, and empathy – are a largely untapped source of competitive advantage, both for individuals and for organizations.”

“Deeply held values define the person you aspire to be. They’re what we’re rooted in and what we stand for – an internal compass that helps us navigate the storms and the choices we all inevitably face.”

“There’s a deep disconnect between what many companies say they stand for and what they actually do. This disconnect takes a toll on employee engagement, on productivity, and ultimately on organizational success.”

“A new way of working ultimately requires an evolutionary shift in the center of gravity of our lives – from “me” to “us”.

This is a mature book, deeply rooted in research and real-life examples. It’s for anyone that feels that we’re in the middle of a transformative revolution and doesn’t have an internal blueprint how to work and live in/with this new reality. The content is not limited to workplace issues, it deals with the much bigger issue of becoming a better person and leading a fulfilling life.

Highly recommended.

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Excellence is a mindset. Not a goal.

July 12, 2010 //

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Throughout the World Cup, I received many emails and tweets congratulating “my team”, Deutschland, for their great tournament and playing really exciting soccer (Fussball, as I call it.). Reading German newspapers and magazines, I experienced a lot of self-congratulation for the new, exciting German soccer game, how suddenly the world loves Germans and the multi-cultural faces that played on the team. Oh yes, and 3rd place was lovely.

Enough already.

We’re talking German soccer here. We’re supposed to win each time. Sure, we won’t, but any tournament we don’t win is a loss. Period. Did you ever see the Lakers or Yankees fans celebrate a second place? Or a good loss in the Division Final? Of course not. On paper, Germany’s performance in the last 3 tournaments looks outstanding: Third place World Cup 2006, 2nd place Euro 2008 and 3rd place World Cup 2010. Great. But, where’s the trophy?

Match it up with all that nonsense talk when the US tied England in a group game and people started to celebrate it as a victory. That kind of talk will get you nowhere. Very, very quickly.

Winning organizations are like “A” students: They expect to get an “A” each time they perform. Whenever they get a “B” or worse, they’re disappointed and work hard to get back to the “A” level. Mediocre organizations are like “C” students: They get a “B-” and high-five each person they encounter. They are still not as good as the slip-up of the “A” organization but they’re ecstatic because for once they’re out of the “C” cellar. Just to slip back into it again very, very soon.

We all worked with “A” people before. They might fail, maybe even often, but they always give everything they have. They believe something can be done when others think it can’t. They can solve problems others consider unsolvable. They don’t believe in expectation of others, they have their own expectations. And, we all worked with “C” people. They might talk a big game but their actual work is sloppy. Mistakes. Not failures. Laziness. No high standards. No inner push.

If your organization does things that everyone arounds you thinks you can achieve, then your organization is just a “B” student, not pushing everyone hard enough. I’m not talking about pipe dreams, I’m talking about Big, Hairy, Audacious Goals. Rationally, you will achieve your goals when you meet certain metrics. But, that’s not fulfilling, organizational achievement. Real accomplishment and achievement comes from pushing everyone, including yourself, to the limit. Beyond the place where everybody else thinks you could ever go. As a “C” organization, you need to push for constant “A” scores. It might take a while,  a lot of “B” scores, but as long you keep up an air of excellence, deeply rooted in your organization, you are on the way to become an “A” organization.

An interesting thing happens on the way: The people that didn’t believe in you and your organization in the beginning, will be starting to believe in you. And these people will do everything they can to make you even more successful. Nothing in your balance sheet might have changed, you still employ the same people, deal with the same stakeholders – a mindset of excellence will change everything.

My kid’s Karate teacher said to the class a few days ago: ” When you want to tear a piece of paper with your hand, you don’t aim for the paper. You don’t aim for a small space behind the paper. You aim for a place 2,000 miles beyond the paper.”

Shoot for the stars.

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Transform your business – Multidimensional Organization Design (Part 10)

June 28, 2010 //

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Enterprises change at a breathtaking pace, reorganizing too often. Wasting a lot of time, energy, money and morale in the process. in the middle of a market tornado, enterprises try to reach a “stable state”. We would argue, enterprises should strive to reach a dynamic state. A state where adaption doesn’t equal reorganization. Such an organizational design is already being utilized.

The Multidimensional (MD) Design

The Multidimensional Design was originally developed at Dow Corning. It eliminates the need to reorganize when faced with a significant internal or external change.

The need to organize comes from the need to divide labor. To organize is to divide labor among different individuals or groups and to coordinate their activities in such a ways as to obtain a desired output. The more divided the labor, the more coordination is required. There are only three ways of dividing labor, meaning only three types of organizational unit:

a)    Functionally defined units (Purchasing, R&D, Industrial Relations, etc.)

b)   Product- or service-oriented output units (the magazines of a publishing company, the coffee of Starbucks)

c)    Market- or user-defined units (units defined by the geographic areas they sell in)

Most enterprises have all three types of units. Their importance is often ordered in the structure of most organizations. If product uniqueness is most important, then product-defined units dominate. If costs are the primary concern, functionally defined units rise to the top. All reorganizations involve changing the relative importance of the three criteria used in dividing labor, that is, changing the organizational levels at which units of the three types appear.

If units of all three types are established at a particular level of an organization, as their relative importance changes all that is required at that level is a reallocation of resources among them. Their reorganization is not required. Therefore, if the three types of unit are established at every level of an organization, the need to reorganize at any time is completely eliminated. Units of any of the three types can be added or subtracted without requiring reorganization; the organization’s structure remains the same.

Conventional representations of organizational structures do not indicate the interactions of the units. Three-dimensional representation of an organization makes it possible to show explicitly the interactions that should or do take place between units.

Product- or Service-Define Output Units

In a multidimensional organization, product- and service-defined (output) units consists of a management and only a small supporting staff, but no other personnel, and no facilities other than what is required to house this small staff of people. They are responsible for providing or arranging for all the activities required to make their products and services available to customers. These units obtain income from sale of their products and services. If they require more capital than they generate or accumulate, they can apply for it from a higher level of the organization. They are expected to treat such funds as loans or investments. They must pay for their use, one way or another.

Function-Defined Input Units

Units whose outputs are consumed primarily by other internal units are functionally defined , or input units. Functional units are often divided into two types, one defined as “operations” and the other as “service”. Operation units are ones that have a direct effect on the output (operations) of the organization, for example, manufacturing, maintenance, and purchasing. Service units have no such effect; they affect the nonoperational behavior of other units; they affect the nonoperational behavior of other units. Functional units are free to both purchase whatever they need and to sell whatever they produce or provide, either internally or externally. Their purchasing and selling decisions are subject to intervention from above and to compensation for such intervention when appropriate. They receive the income that their sales generate, and they pay the cost of whatever they purchase.

Market- or User-Defined Units

Market units – units that are defined by the users by the users they serve – have two complementary functions. First, they sell the outputs of any other unit in the organization that wants to use their services, as well as selling outputs externally. Second, market units also serve as advocates of the users in the markets for which they are responsible. They should not only represent the company in the market, but also the market in the company.

Market units evaluate the activities and outputs of other internal units from the point of view of potential and actual users of the organization’s outputs, who are outside of the organization and are affected by these outputs. For that reason, market units operate as consultants to the executive office and other unit heads.

Performance measures

A uniform, explicit, and operationally unambiguous measure of performance – which incorporates some function of the amount of profit generated, for example, return on capital employed – can be applied to units at every level, including the executive office. This makes possible comparison of the performances of units at all levels and discourages make-work and bureaucracy. However, profit is by no means the only important performance characteristic. Recall that in socially-systematically conceived organization, development of the organization, its stakeholders, and its containing system are its overriding objectives. Although profit is necessary for corporate development, it is not sufficient.

In our next installation, we discuss a plan being a system of solutions.

Previous installations can be found here: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6 and Part 7, Part 8, Part 9.

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Transform your business – The community enterprise (Part 8)

June 23, 2010 //

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Image: Courtesy of farm4.static

Transforming an enterprise into a community is consistent with an increasing amount of dissatisfaction with the dominant concept of what a corporation is and who owns it. Community enterprises are created by common purpose rather than a common place. Nobody owns the community. Communities consider members as citizen and not as human resources. Citizen with varied responsibilities as well as rights.

Transforming an enterprise into a community is imperative to allow the system to focus on interaction of all parts and not on separate actions. A community enterprise allows everyone to participate in making decisions that affect them directly. In addition, control is circular, not linear. We don’t recommend eliminating hierarchies because labor must be coordinated in a complex working environment. But hierarchies don’t equal autocracies.

Community Design

Each manager will have a board, consisting of the manager’s supervisor, his subordinates and pertinent stakeholders. Most managers will be part of three levels of boards, interacting with five levels of management. This amount of interactions and access significantly reduces internally generated problems.

The boards are tasked to plan, police themselves, coordinate and integrate with other boards, improve quality of work life and overall performance and, last but not least, approve the board chair.

Boards meet at least once a month. The difference to normal meetings, that often accomplish nothing, is that managers don’t consider them as work interruptions. Instead, board meetings help managers to manage interactions with all stakeholders and facilitate their work. Boards don’t operate under the tyranny of majority, their goal is to operate by consensus. If consensus can’t be achieved, board members are tasked to work under the premise of consensus through experimentation. However, board members have to consent on the success metrics of the test and  a follow-up plan.

The agenda can be set by any member of the board. In the early stages of the enterprise transformation, a facilitator might be used to help the board with the first baby steps. This should be supported with an initial introduction to group processes.

Each board acts independently, can implement any decision if it doesn’t affect any other or the organization as a whole. Managers should ask their boards for advice on decisions they have to make but the responsibility for the decisions is solely with the managers, not the boards.

Empowering all stakeholders compered to empowering a few managers will improve the performance of the enterprise dramatically.

Let’s discuss this further in Part 9.

Previous installations can be found here: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6 and Part 7.

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The end of Strategic Planning

June 3, 2010 //

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Images: Courtesy of Music Philosophy (Mico, you rock!)

Strategic Planning was born around 100 years ago when the first cars went into mass production: The lack of product was vast and the economic landscape easy to oversee, making it easy for companies to adjust to changes immediately. Markets were slow and people believed humans can achieve anything, supported by Strategic Planning. This mechanical view of the economy and an enterprise left the role of Strategic Planning almost untouched and its importance has even grown over time.

Problem is: The world enterprises operate in has dramatically changed. In a world of saturated markets, educated people playing their consumer role rather unwillingly, globalization, terror attacks, ash clouds, etc. Strategic Planning becomes a farcical endeavor. Maneuvering an enterprise has become an illusion. But we continue to plan.

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Strategic Planning is a waste of time

Successful companies are highly flexible and adaptable in an ever-changing world and market. That’s the opposite of a plan: focusing on getting something done in a certain amount of time.

Let’s just have a look at the US government: Every year they plan on paying down the debt – and every year they face  new surprises: high unemployment rate, a Supreme Court decision, an oil spill. Immediately, all the Strategic Planning is out the door and projections have to be adjusted. Planning is not forward-looking, Planning is static and reactive.

Same is true for enterprises: The performance of a company is more often than  not influenced by factors out of their influence sphere: price of commodities change, currencies fluctuate or a banal law changes somewhere in the world and affects the performance of the enterprise – once again, projections have nothing to do with reality. This results in permanent frustration. And, companies develop the tendency to find someone to blame: Purchasing, Sales, Product.

Anyone who still hopes to control the future with numbers has no clue how markets work nowadays, doesn’t know how you can get optimal performance out of all stakeholders or just lives in a perfect world, fueled by selfish wishes and hopes.

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Executives don’t like change

The idea that executives don’t maneuver the enterprise through the stormy seas (Actually, it’s the other way around.) doesn’t fit in their MBA-fueled pipedreams of being the sole savior of this struggling ship. A myth born in the Industrial Age. In addition, executives believe they need Strategic Planning to control their employees. At its core, most managers believe their employees are lazy bums that can’t be trusted. (Honestly, without me they just wouldn’t do anything all day.) For that reason, employees need to get clear goals and constant observation.

Peter Drucker’s Management by Objectives (MBO) gave executives more fodder for their bizarre prejudice that people without objectives have no clue what to do. People wouldn’t work efficiently without planning goals. This resulted in an enterprise world gone crazy: Increase revenue by 13%, reduce costs by 12%, service has to increase their number by 10% for the next 5 years. Totally absurd. We call it: Management.

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Shift power from executives to all stakeholders

This absurdity we call management has to be replaced with a new paradigm:

  • Focus on relative goals
  • Empower your employees by trusting them 100% and allow them to react individually to demands of stakeholders
  • Focus on culture

Don’t stick to numeric goals: Would you want a NASCAR driver to win a race or plan for him to drive the race in 2 hours and 32 minutes? Foster a culture where it’s about winning not making numbers.

If a department/division/branch has problems, don’t let the executives take over. Stakeholders have to find their own way out of the mess and don’t need the savior from headquarter. This might leave the executives with less opportunities to congratulate themselves but will increase team morale dramatically. The role of leadership has to be be redefined: It’s not about controlling people. That breeds resentments. And crushes spirits.

It’s about inspiring people. Engaging them. Executives need to lead, not control.

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Redefine enterprise success

Executives have to throw away their outdated Org charts, their hierarchy thinking and the focus on their selfish goals. The new enterprise places stakeholders on the pedestal, makes humans not plans their focus. Once you place your trust in all your stakeholders and empower them, goals like shareholder value, executive salaries and bonuses will fall into place.

Enterprises need less goals, not more. Goals are overrated. Real success metrics are an organic byproduct of a real corporate identity. It shouldn’t be about corporate goals determined by a few, it should be about corporate identity lived each and every day by all stakeholders. Focusing on corporate culture will help enterprises to develop a congruent group of like-minded people. Forget the performance review. Lean on peer pressure as the guiding force.

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Strategic Planning vs Being Prepared

Strategic Planning means: Derived out of an executive vision of the future and assessment of the present, the company develops a plan that everybody has to follow blindly. Enterprises based on this belief try to manage the future.

Being Prepared means: We’re trying to be ready for any eventualities, we prepare, we’re staying intellectually fit, always question everything – never separate acting from thinking. Being prepared is an attitude. This attitude will allow companies to be successful in the future. Strategic Planning dooms them.

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Strategy has its roots in the military. Even the military doesn’t need mindless warriors anymore

The idea of Strategic Planning was based on the thought construct that there are two kinds of people: The thinkers, the directors, the controllers. And the mindless workers that do their task and don’t ask questions. Strategy is a tool to keep the doers from thinking and under tight control.

Since the markets control enterprises more efficiently than managers, what’s the value of managers hiding behind strategy decks anymore? Instead, every stakeholder has to think, adjust and do. What company still can afford to employ non-thinking people, happily entrenched in operations? That’s what automization is for.

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Perpetual Test Mode

Enterprises need to ask themselves constantly “How could I do this better?” even when everything works out fine right now. Once enterprises believe they’ve found the perfect model, they will switch into the mode “Why change anything?” And die.

Enterprises need to follow two paths:

  • Implement perpetual, incremental improvements. Why not improving a dozen of little things? Can you improve your website daily outside of the yearly refresh? Can you change the way customer service interacts with people? Are your key employees fully invested on Social Media Channels, always ready to reply? How can you move your company from good service to utter delight?
  • Think big: Some problems can’t be solved with incremental changes. They need significant innovations. How can you leap ahead of your competitors by rethinking how a problem can be solved?

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How to begin the transformation process

This is an unusual paradigm for enterprises. Everything they learned in business schools and on wooden conference tables is useless. Even more: counter-productive.

It behooves every employee to internalize this new world view. And start to develop multiple pilot projects or beta programs. A good first step would be to eliminate the yearly performance reviews and axe yearly planning.

Let’s face it: the world was not meant to be perfect and nobody can control it. We’re supposed to muddle along and work our way through challenges and problems. Once enterprises accept this fact, they have a chance to succeed in the future. Most importantly: As long as managers don’t trust all stakeholder, as long as they don’t believe people will work without control and incentives, just because they want to, as long as managers don’t change their thinking, enterprises will remain the places of outdated hierarchy, intellectual imprisonment and planned economy.

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