Category Archives: Leadership

Creativity, Customers, Finance, Leadership, Sales, Value

Would You Like To Buy The Brooklyn Bridge? – An Infrastructure Sales Story

I have been thinking a lot about infrastructure lately. There are many different types of infrastructure out there. While I am primarily in the High-tech infrastructure environment, almost every other industry has its own type of infrastructure (think oil, airlines, brewing, etc.) and for me, it is hard not to think about things like the Brooklyn bridge when you start talking about infrastructure. I think by way of analogy, I’ll stay with bridges in general and the Brooklyn bridge in particular for this discussion, because it enables me to make the general points I want to make about infrastructure sales and business decisions, and there are a ton of very cool facts that I was able to discover, and hence would like to share.

“The Brooklyn Bridge looms majestically over New York City’s East River, linking the two boroughs of Manhattan and Brooklyn. Since 1883, its granite towers and steel cables have offered a safe and scenic passage to millions of commuters and tourists, trains and bicycles, pushcarts and cars. The bridge’s construction took 14 years, involved 600 workers and cost $15 million (more than $320 million in today’s dollars). At least two dozen people died in the process, including its original designer. Now more than 125 years old, this iconic feature of the New York City skyline still carries roughly 150,000 vehicles and pedestrians every day.” Or so says History.com. (http://www.history.com/topics/brooklyn-bridge.)

I find this to be very interesting. Here is some infrastructure that was built 135 years ago and is still in service. In fact, it could be said that based on its load and traffic, it is doing more now than it was doing 135 years ago when it was put in service. It cost $320 M in today’s dollars, but probably could not be built for fifty times that ($15 Billion) today. It was basically designed to last 100 years, but at 135 years it is still going strong.

Please note these facts. I will be getting back to them.

When it comes to selling infrastructure, there is one man that historically stands out, head and shoulders above all others: “George C. Parker (March 16, 1860 – 1936) was an American con man best known for his surprisingly successful attempts to “sell” the Brooklyn Bridge. He made his living conducting illegal sales of property he did not own, often New York’s public landmarks, to unwary immigrants. The Brooklyn Bridge was the subject of several of his transactions, predicated on the notion of the buyer controlling access to the bridge. Police removed several of his victims from the bridge as they tried to erect toll booths.” (https://en.wikipedia.org/wiki/George_C._Parker.)

What this teaches us is that if you are going to sell infrastructure it is important to identify the proper customers.

What this also shows is that George was a man who was way ahead of his time. If he was selling infrastructure today he probably would be incredibly successful selling infrastructure to those that are actually in that business, and would not have to spend the last eight years of his life behind bars in Sing Sing prison.

It is also important to understand the engineering associated with some of the existing infrastructure (at least in the US, and probably elsewhere – look at the London Bridge for example), as people go around trying to make a case to replace it. The engineering associated with older infrastructure usually far and away exceeds the stress requirements that were to be placed on it. This probably cannot be said today. As costs have skyrocketed, engineers are now designing and building structures as close to the required loads and specifications as possible in order to keep those costs low. That means they also do not last.

In other words, in the past infrastructure was usually built to last. In addition to old bridges, think about all the pictures in magazines (and on the web) of the old copper pot stills being used at the various breweries (my personal favorite), and bourbon and scotch distilleries. I am sure that all the manufacturers of commercial distillery equipment would like to replace them, but I suspect that also isn’t going to happen any time soon.

Again, looking at our favorite infrastructure example: “(it employed) a bridge and truss system that was six times as strong as was thought it needed to be. Because of this, the Brooklyn Bridge is still standing when many of the bridges built around the same time have vanished or been replaced.” (https://en.wikipedia.org/wiki/Brooklyn_Bridge.)

For comparison sakes, a newer piece of infrastructure, the Tappan Zee bridge was put into service, in the same area, about 70 years after the Brooklyn bridge: “As another example, the original Tappan Zee Bridge was opened in 1955, and construction of its replacement is now underway. A 2009 New York state report on the original bridge described its design as “non-redundant,” meaning that one critical component failure could result in large-scale failure; the bridge was featured in a History Channel show entitled “The Crumbling of America.” The new bridge is being designed with a 100-year lifespan; info about the “New NY Bridge” is available” here. (http://www.mondaq.com/unitedstates/x/287844/Building+Construction/Lifespan+of+a+Bridge+Span.)

And there is also: “After years of dawdling while the bridge crumbled, state officials say they are rushing to complete a review of the most feasible solutions to the problem of the Tappan Zee. But a decision is still two years off and a new bridge would require eight additional years and as much as $14.5 billion to build, they say.” (http://www.nytimes.com/2006/01/17/nyregion/a-bridge-that-has-nowhere-left-to-go.html.)

“The bridge was built on a very tight budget of $81 million (1950 dollars), or $796 million in 2014 dollars.” (https://en.wikipedia.org/wiki/Tappan_Zee_Bridge.)

This would indicate that more recent infrastructure is usually neither designed to last as long as some of the older infrastructure, nor is it as reliable and cost effective as some of the older, over-engineered variety.

This would lead many to the position that for some of the older infrastructure, it would be much more economically feasible to repair it, upgrade it, maintain it, than it would be to replace it. This is despite what many of the current infrastructure suppliers might want or even indicate. If it is working and can still continue to work, why would anyone want to build another bridge, right next to the still working one, to carry the same traffic.

However, just because it was initially built well doesn’t mean that it shouldn’t or doesn’t need to be maintained. Infrastructure requires continued investment in order to maintain it: “The repairs, ordered quietly last October by the city’s Department of Transportation, are intended to fortify the concrete-reinforced steel-mesh panels beneath the bridge’s traffic lanes, which were found to be deteriorating by construction crews at work on a repaving project last July, officials said yesterday.….. the city’s Transportation Commissioner, attributed the problems to ”normal wear and tear” on the 115-year-old bridge…..He added that the steel girding and concrete that must be repaired, which were put in place during a 1954 repaving project, ”were installed with a life expectancy of 60 years,” and had therefore fulfilled most of their engineering mandate.” (http://www.nytimes.com/1999/02/05/nyregion/as-concrete-falls-city-moves-to-fix-brooklyn-bridge.html.)

And of course, 20 years later more maintenance is needed on the Brooklyn bridge, only now, the cost is climbing: “The cost of repairing the Brooklyn Bridge is expected to hit $811 million — a roughly $200 million increase from estimates made only last year, The Post has learned. When the mammoth project to renovate the 133-year-old span began in 2010, the price tag was even lower — $508 million.” (http://nypost.com/2016/11/11/brooklyn-bridge-repairs-expected-to-cost-811m/.)

So, where does all this bridge information leave us when it comes to selling infrastructure?

I think the first thing to note is that unless the infrastructure is at risk of immediate failure, such as the Tappan Zee bridge is deemed to be, it is going to be very difficult to replace. You may be able to add to it. You may be able to augment it. But the financials usually do not make sense for a full replacement. It is going to be a tough sell to get a customer to buy something that does much the same as the thing it is trying to replace.

It also looks as though capacity is going to be the prime driver for infrastructure expansion and augmentation. The more cars that want to get across the river, the bigger the needed bridge, or the more bridges that are needed. New features and elegant designs of bridges are pretty cool, but the objective is to still get cars across the river as efficiently as possible. Form is nice, but it is function that predominantly drives infrastructure acquisition.

And I think finally, there is an excellent business to be had repairing, maintaining and improving the existing infrastructure. As we see above, even incredibly expensive bridge repairs are economically preferable to what would be the exorbitantly expensive cost of replacing the infrastructure. The Tappan Zee replacement bridge is expected to cost between $4 Billion and $15 Billion. The original Tappan Zee cast $81 Million. The financial math becomes pretty obvious, pretty quickly.

Focusing on how to improve the existing infrastructure, extend its life and help it to be used or run more efficiently are going to be keys to a customer first mentality that the good sales teams are going to need in order to be successful.

I think this is going to be especially important as customers are rapidly learning that the new infrastructure they buy today is not going to last as long as the old infrastructure they already have today.

If you don’t believe me, just look at the bridges.

Challenge, Creativity, Experience, Leadership, Process, Responsibility

Hard Work

Perhaps I am getting a little too retrospective, or was it introspective. I forget which.

I think it is interesting how my concept of “Hard Work” has changed over time. I used to think of it as moving rocks and landscaping timbers around our yard for my mother when I was younger. Hours in the heat with all that physical exertion. Then I remember that I was also a competitive tennis player back then, and that also entailed hours in the heat with significant physical exertion. That didn’t seem to be as hard work, at least back then.

Now both yard work and tennis in the heat of a Texas summer seem somewhat equally uninviting. Right now, both seem like pretty hard work.
I think I would like to look at what hard work was, what it is today, and possibly more importantly, what it may become in the future.

I seem to recall that I also had a distinct dislike for reading text books and studying (on my own time, after school, when I wanted to do other stuff, of all things). It was hard work to both get myself to do it, and to maintain the focus on topic so I could learn and master the required topics. Now I find myself reading recreationally on those same topics, as well as many others related to my professional disciplines, and actually enjoying it. Now it doesn’t seem like hard work at all.

Using these examples, it seems that hard work is the work that we don’t want to do, but are somehow compelled to do. It may be best described as doing something which you have not fully bought into doing. Something you have to do, instead of something you want to do. I think I’ll go with that definition for now.

I had bought into the idea of spending hours in the heat practicing the various aspects of my tennis game. Initially not so much on the yard work for the then family home. Later with my own home and family, I enjoyed both the tennis and the yard work. Now, in the triple digit heat of a Texas summer, I do my best to refrain from both.

As an aside, I didn’t require my kids to join me working in the yard, as I was compelled to do. I don’t know at this point if I did them a disservice.

So far, neither of them has complained about not being required to do yard work in the heat. Go figure.

For some reason, I find myself quoting Mark Twain, a lot. I don’t know if it is just happenstance, or if there is some other type of connection. Either way, he seemed to say many things that can still be considered truisms today. He said:

“Find a job you enjoy doing, and you will never have to work a day in your life.”

But I am actually not so sure that is the case. I think it may be more along the lines of: If you do something that you buy into doing, it means that you will not consider it “hard work”.

You may be fully engaged. You may get to the office early. You may stay late. If you are bought in, and are committed to the deliverable, none of what you are doing is going to feel like hard work. You are getting satisfaction and fulfillment from the effort, and probably feel you are providing value in what you are doing.

I have found when I am engaged and committed I have internalized the assignment or objective, and I want to deliver and excel. I suspect that I am not too different from the majority of people out there. Given the opportunity, I think most everyone wants to be engaged, and to have internalized their work goals. What I have learned over time is that people probably cannot be trained or managed into this type of commitment. They need to be led to it.

I think the ability to do this is probably a learned capability.

I think back to the periods in time when my views about what was and wasn’t hard work changed. When the drudge work of studying for an exam was supplanted by the desire to walk into the exam confident in the knowledge and command of the material. Some kids seem to get this early in their educational career. Let’s just say that it was quite a way into my educational journey before I learned it. Much the same feeling as when the drudge work of the preparing for the customer (or even internal) presentation changed to ownership and the confidence that went with it, although that one came much quicker in my professional career.

People buy into ownership and leadership. If they are given a responsibility and are shown how their role plays into the greater good, the process of getting them to buy in has started. But that is normally not enough. People want to contribute. This is where the pride of ownership comes in.

Communicating the “what” part of what needs to be accomplished is only part of the process. It is the “how” part of the objective, as in how is the goal to be achieved that will either get internalization and buy-in, or probably get the function labeled as “hard work”.

If people are told what they must do, and how they must do it, there is very little for them to contribute to the function, other than being the vessel that performs the assigned tasks in the prescribed manner. They may have no pride of ownership. Without it, almost everything, regardless of how simple or easily achieved has the potential to be considered hard work.

As I said, we all have goals that we need to achieve for the greater good of the business, but I can’t help feeling that being told what to do and how to do it sounds like a definition of hard work.

Even with all of that preamble, I believe that the working environment, and for that matter all work, not just hard work is going to change. I have talked about the application of process as a substitute for judgement in business before. Good judgement is a necessary leadership characteristic. There are those that seem to innately have good judgement, and there are those that have acquired it as a result of their experiences.

Randy Pausch in his book “The Last Lecture” said:

“Experience is what you get when you didn’t get what you wanted.”

This is a pretty well known, and surprisingly accurate assessment of the world. What may not be as well known, is the second line from this quote. It goes:

“And experience is often the most valuable thing you have to offer.”

But as business continues its journey from process to automation and beyond (Artificial Intelligence?), getting experience, that most valuable thing, the basis for good judgement (at least for most of us) is going to be a more and more difficult thing to obtain.

Career progressions that were once based on the recognition of an underlying business issue, and the creation and implementation of solutions to rectify them, will no longer be the norm. It will become more along the lines of being compelled to follow the steps in the existing process. As experience is gained in one step, there may then be the potential opportunity to manage multiple steps, or entire processes, or potentially multiple processes. Work will change from the creation of a solution to a problem, to the management of the existing process.

One of the issues that we seem to be facing today is that we no longer appear to be accepting, let alone rewarding the individual who does what we used to call “Thinking Outside the Box”.

That does sound pretty trite to me, but unfortunately also pretty applicable.

Process minimizes the risk of poor judgment and the variability of results. But as business appears to be creating more processes, as a substitute for judgement, that compel people to remain in the process box, it also makes the opportunity for business (or process) improvement that much more difficult to achieve.

I guess this can be an acceptable situation if you are confident that the process in place is optimal. But again, we have all seen and have grown accustomed to the idea that the rate of change in business is continuing to accelerate. The progression of work from on shore, to off shore, to automation, to the potential of Artificial Intelligence (AI) should underscore this. So even if a process was optimal at one time, it does not appear that it can remain optimal in the face of accelerating change.

I think the future of hard work will lie in compelling people to continue to use more or less fixed processes in the face of ongoing, rapid change. The process structure by its nature is resistant to change with its multiple parties, stakeholders and check points and desire for predictability, and that does not bode well for it going forward in a continually more unpredictable environment.

Perhaps the new business leaders of the future will be the ones that instead of just recognizing and solving an issue, also master the means of rapidly modifying and adapting existing processes to the changing environment. That will probably require a fundamental change in how processes are created and managed. The proverb states that “Necessity is the mother of invention”. I think that is the case here. Otherwise I think there is going to be an awful lot of hard work for everyone in the future.

Accountability, Achievement, Alternatives, Change, Leadership, Process

Joining Them

For those of you that don’t directly know me, I can have a tendency to cause problems. I like to think of myself as a knowledge worker. That means that I tend to make my living utilizing my brain power as opposed to my muscle power. That also means that when people ask me questions, I (sometimes mistakenly) think that they are asking me to use the sum total of that brain power, experiences, training, and cognitive capabilities to provide what I think is the best response to their queries.

Many times, however, it seems that people who ask me questions are not actually looking for my response. They are looking for their response. They may already have an answer that they like, they just want me to agree with it. Sometimes I do. Many times, I don’t.

My wife, who also happens to be a very smart lady has learned that when she asks me something, the probability is asymptotically close to zero that I will provide her the response that she is looking for. Her solution to this situation has been to stop asking me questions or for my opinions all together. She now just goes ahead and does whatever it was she had already decided was best in the first place.

Sometimes I find out about it later. Many times, I don’t. I am told we are both happier with this arrangement.

In the past, this approach to business has stood me in good stead. I think it was pretty much this way for everyone. If your judgement was good, and you were right more often then you were wrong, you progressed forward. However, as times have changed in business, this approach to answering questions, or taking on assignments, has now led to me sometimes being viewed as something of a rebel in the process driven world.

As I said, initially this classification didn’t bother me, as such. I actually looked upon it with a certain sense of pride. I think part of it was that business and organizational process was still somewhat in its relative infancy as a methodology for management, and part of it was that for the most part I could still get things done. I would examine a problem, create a solution and chart a course for implementing it.

We had a business structure that was built on a Risk – Reward basis. If you had a better way of doing things and had the belief in it such that you put it out in front of the team and defended it, there was a real probability that you might get the opportunity to actually do it.

As the old saying goes: Be careful what you ask for. You might just get it.

If you were right, and you implemented a solution that did improve things, you got the opportunity to continue on your trajectory. On the other hand, if you were wrong, or for whatever reason were unable to implement your solution, it was usually some time before you got another chance to do something new.

As the inexorable tide of process continues to rise within organizations, this approach to career trajectories appears to be a thing of the past. There is less and less room for rebels within a process driven system. There is less and less opportunity, and just as importantly capability, to effect change as the purview of process has continued to grow.

I had been thinking about this dichotomy for a while.

All sorts of quotes and thoughts have come to mind.

Japanese literature has many books about the tragic heroes throughout its history. Those that chose to stay true to their ideals and suffered defeat and paid the ultimate price for doing so. Many are now revered in Japanese society for what they did. Despite knowing that they were fighting a battle that they could not win, they chose to continue to fight.

I respect that. But it is not lost on me that they didn’t win. And they got killed.

If you are interested in reading any of this stuff, there are several books that I would recommend: The Nobility of Failure – Tragic heroes in the history of Japan, by Ivan Morris, Musashi, by Eiji Yoshikawa, and Liam Hearn’s fully fictional Tales of the Otori series are all good.

On the other end of the spectrum, there is an excellent quote from Sam Rayburn. For those of you that don’t know him, he was a U.S. Representative from the 4th District in Texas. He was also the longest serving Speaker of the House in history, serving in that role for seventeen years between 1940 and 1961.

He also has a modern tollway named after him here in the Dallas area. You have to pay if you want to drive on it.

He said: “If you want to get along, you have to go along”.

Spoken like a true politician. I am not so sure if that is a really good way to proceed either, although there do seem to be many today in business that appear to subscribe to it.

I recently came across a quote by Marie Lu, who is a contemporary author of several series of young adult books. I haven’t read any of her books yet, as it is readily apparent that I am somewhat beyond young adulthood at this point. The quote struck such a chord with me that I will probably have to go out and read at least some of her books to see if they can live up to the expectations that this quote has set for me.

She said: “If you want to rebel, rebel from inside the system. That’s much more powerful than rebelling outside the system.”

Corporate organizational and process structures have now become so ingrained from a business and operations standpoint, that it is almost impossible for an individual to step outside of them and be perceived as offering anything constructive or beneficial to the business. Notice that I said almost. People such as Mark Zuckerberg at Facebook, Jeff Bezos at Amazon and the late Steven Jobs at Apple all have stood as individual rebels who stepped outside the then corporate norm with great success.

It should also be noted that in order to achieve their ultimate goals that they had to stand so far outside the then corporate norm as to have to create their own new corporations and models. There were precious few if any companies that would have accepted their radical approaches to the business issues that they took on.

They didn’t seem to accept the then standard process. They believed in their own judgement.

However, many of us may not have had the absolute vision or solution on the scale that these rebels did. We may see what is wrong within the organization that we currently find ourselves in. We may see what needs to change in order to improve the business or opportunity that we are in. We face a conundrum. We know the structure or process in question is not optimal. We also know that if we rebel against it, from outside of it, the inertia of the process will more than likely continue in its present direction.

Do we stand by what we believe is correct and rebel (figuratively of course) from outside the process, or do we join the process with the hope and plan on changing it from within?

There are several people who seem to have been credited with the phrase “If you can’t beat them, then join them”. I saw various attributions which included Jim Henson (I don’t seem to remember any Muppet saying this), and Mort Sahl (a comedian from the 1960’s), but both Bartleby.com and the Yale Book of Quotes attribute the quote to Senator James E. Watson of Indiana, with its first appearance in the Atlantic Monthly magazine in February of 1932.

It seems that Marie Lu has put a new spin on a much older idea. The new spin is that Joining the system or the process does not necessarily mean the acquiescence and submission to those principles that it once did. But rather, the only way to now generate effective change for a business process or a system is now from within it.

Again, for those of you who know me, you probably understand how it pains me to say this.

External rebels within a defined business structure and process are probably going to go the way of the previously mentioned Japanese tragic heroes who may have been fighting a good and just battle in the face of insurmountable odds. While they might have been right, they didn’t achieve their goals. They didn’t survive either.

Those that went along in order to get along didn’t achieve their goals either. They may have survived but I’m not sure that really is a preferred existence.

I think the process driven structures of business today are now in such a state that the only way to effect meaningful change to them, is to do so from within them. External influence on a process has a decreasingly small effect on them. That means that you will have to join them. That doesn’t mean total acquiesce and allegiance to them. It just means that going forward in today’s business world, it appears that one of the only ways to change a flawed business process will be from within the process itself.

Alternatives, Analysis, Data, Decision Making, Incentives, Leadership

Solutions, Costs and Confirmation Bias

It is said that beauty is in the eye of the beholder. I guess it can also be said that the best solution is also in the eye of the beholder. It probably also depends on who you ask. The problem is that the best solution depends on the relative criteria associated with the issue that requires a solution. It also depends on the lens that each individual looks through when they are trying to craft a solution.

Abraham Maslow was an American psychologist who was most notably remembered for his ideas on the hierarchy of human needs. That in and of itself is pretty cool in my book, but that is not why I am citing him here. He also said:

“if all you have is a hammer, everything looks like a nail”

and variants thereof, which is from Maslow’s The Psychology of Science, published in 1966.

And here-in lies the issue.

What seems to occur is that if you are trained as a lawyer, you are taught to view every issue from a legal standpoint. If you are a marketer, you view every issue from a marketing point of view. If you are in finance it is always about money. The view you have of business influences the view you have of issues and their respective best solutions. And so on.

This is absolutely the case for engineers. It seems that if you are an engineer, everything is an engineering problem, and therefore an elegant engineering solution is probably not only possible, it is highly desirable. For engineers, it doesn’t seem to matter what the specific issue criteria are. Topics such as cost and time required take a back seat when it comes to engineers. It always comes back to engineering the best engineering solution.

For those of you (like me) who are not engineers, and who have argued with engineers in the past, you will probably very clearly understand the following. For those of you who have not yet had the opportunity to argue with an engineer, be patient. I am sure that you will get your opportunity to argue with one in the near future.

There is an old saying regarding arguing with engineers. It is so old that no matter how I researched it (two or three variants of searches on Google) I could not find any direct attribution as to the original author. The saying goes:

“Arguing with an engineer is a lot like wrestling with a pig in the mud. After a while you realize that the pig is enjoying it.”

But I have digressed enough. With the possible exception of noting that engineers are usually much more associated with costs than sales. I’ll get to that in a moment.

The point that I am trying to make here in my own clumsy way, is to point out that regardless of what the defined criteria may be regarding an issue’s potential solutions, we all have a bias as to how we would go about creating our best solution. This type of bias has a specific psychological name: confirmation bias.

Between my earlier discussions regarding Maslow, and now confirmation bias, I seem to have taken on quite a psychological bent here.

Shahram Heshmat (Ph.D.) in his blog states confirmation bias occurs when we have formed a view on a topic, we embrace information that confirms that view while ignoring, or rejecting, information that casts doubt on it. Confirmation bias suggests that we don’t perceive circumstances objectively. We pick out those bits of data that make us feel good because they confirm our prejudices. Thus, we may become prisoners of our assumptions. (https://www.psychologytoday.com/blog/science-choice/201504/what-is-confirmation-bias).

I brought this idea up to an engineering friend of mine. He said every problem should be viewed as an engineering problem, and started arguing with me again. Having just cleaned the mud off from the last time, I didn’t engage.

Confirmation bias is an interesting topic when it comes to management, leadership, and issues. This is especially true when it comes to looking at two very important aspects of any business: sales and costs. I will hedge my comments here with the qualifier “for the most part” in that there are definitely exceptions to every generalization. But for argument’s sake, I will go ahead and generalize a little.

When it comes to setting sales targets, who sets the goals?

Those of you that said sales are wrong.

Management usually sets the sales goals. They ask for bottoms up forecasts and expectations from the sales teams, which they will usually review and find lacking in that they do not meet the financial and or growth expectations for the company. They will then ratchet up the targets to be more in line with the company’s needs and requirements, and issue them to the sales team to achieve.

The confirmation bias here is that management believes and expects that sales will provide them with a lower set of sales forecast targets because it provides the sales team a higher probability of achieving those targets. When sale provides a forecast, regardless of its veracity, that is lower than management expectations, this bias is confirmed.

I really don’t think I have ever been part of an organization where the sales team ever provided a sales forecast which was greater than management expectations. Perhaps my own confirmation bias is that management sales expectations will always exceed the sales team’s expectations, regardless of the market conditions.

On the other side of the spectrum lie costs. When it comes to setting costs, it is usually engineers that set them. While there is usually a similar process of setting up costs and budgets associated with products and services (I am not going to look at specific disciplines or functional groups here, just the costs associated with deliverable products and services) where the cost groups (usually containing at least some engineers) are consulted regarding their input into the costing model.

Herein is where the processes begin to diverge. Management has the ability and bias to step in and alter or impose their sales demands on the sales experts, but does not have nearly the same inclination to alter or impose their wills on the cost experts and groups.

Their confirmation bias is that the cost groups are doing their very best to keep costs low, even though the cost group has the same rationale as the sales group when it comes to setting targets. Higher cost targets for the cost group are obviously much easier to achieve than lower cost targets.

The resulting higher costs drive higher prices and a sales team that is invariably told to “sell value, not price”.

This may have been an acceptable mantra when there was discernable value (and price) differences associated with products and services. In some instances, there still may be, but the race to the bottom regarding minimally acceptable product quality and service levels at the lowest compliant price seems to have mitigated all but the basic pricing and functionality topics as differentiators.

Customers do not particularly care what a supplier of products or services costs are. They care about the supplier’s price. And quality. In that order.

A colleague of mine mentioned that the incentives and commissions associated with sales incite the striving behaviors associated with good sales teams, while there is no similar incentive plan in place to incite a similar striving approach to reducing cost budgets for the cost groups. Sales teams make at least partial commissions, proportional to their sales target achievement, even if they don’t fully meet their sales objectives.

Perhaps it is time to rethink the compensation plans associated with the cost teams so that they more accurately reflect the need for continued cost budget reduction instead of the current cost budget achievement structure.

Nominally the market sets the price for a good or service. The market is made up of customers. Even Apple with its ubiquitous iPhone faces market challenges from the likes of Samsung, LG and other smartphone producers. If Apple raises its price too high they risk losing share, and profitability to competitors.

Apple is immensely profitable. They are also a veritable tyrannosaur when it comes to working and controlling their costs. If you don’t believe me, try becoming one of their suppliers and selling them something. I have been a part of organizations that have done this. It can be a challenge, to put it politely.

It would seem that Apple’s culture may have evolved out beyond the confirmation bias dichotomy associated with sales and costs to the point where they continue to challenge themselves with respect to their cost structures, and engineering solutions. They seem to have created a market cache, expectation and demand that may have enabled them to restructure their cost model focus in order to maximize their profits.

That is truly speculation on my part, but it is a theory that would seem to be supported by the empirical observations of them in the market.

Companies that are looking to maximize their profit potential probably need to do a little internal analysis to understand their own costing processes and capabilities. There are many that are still looking at them from a bottom up, confirmation bias based point of view. Apple has recognized that their costs and their product price really have very little relationship and should be treated as almost totally unrelated items.

This approach would allow product and service providers to focus on their sales strategies and their costs strategies in separate, but similar ways. It would seem that the best solution has proven to be to engineer your products and services, not your costs, and instead to treat your costs with the same type of aggressive objective setting that you treat your sales.

Accountability, Achievement, Challenge, Change, Differentiators, Goals, Leadership

Don’t Do Your Job

Although we all like to think of ourselves and our careers as fully and totally unique, I think there are some experiences that we have all probably gone through, to one degree or another, that are probably somewhat similar. It is how we react and respond to these experiences that creates the differences in careers and career trajectories. As I think back on all the roles I have had in the same organizations as well as in new or different ones, I think of one thing that pretty much all of them had in common. They all had a specific job description.

They didn’t all have the same job description. Each role had a somewhat different or unique job description. It was usually that job description that helped the then hiring manager define the combination of experiences, traits and capabilities that led them to choosing me to fill that role. I think it’s probably the same for just about everyone else who doesn’t have some sort of genetic or familial tie to also trade upon in the organizational world.

I think we can all remember those first days in a new position (any new position) where the first thing you do is try to ascertain both what is expected of us and what we will be reviewed and rated on. This is only natural. We all want to do what is expected of us. We want to have objectives to work toward and be measured against. We like to know what we have to do to get ahead.

We then dig in and go on our merry way in trying to achieve or even possibly exceed our goals.

The end.

When review time comes around we are then tasked with the objective of trying to define whether we exceeded our goals in such a way as to merit an excellent “super-star” status (or some such similar ordinal ranking), or just merely a good, exceeded what was expected. Was it really an “exceed” or was it just in reality a “strong achieved”. Did the objective get achieved, or could it in reality have been done better.

It seemed what was once a defined and specific object has now turned out to be open to some interpretation, as it were.

Then there is the ever-present worry regarding whether the ratings that are being discussed are a true reflection of actual individual performance, or is it influenced by, or the result of the organization’s requirement that only certain percentages of the organizational populace can and must fall into certain ranking categories. The dreaded forced rank stacking.

This sort of ranking has been put in place to make sure that managers don’t neglect their responsibility to differentiate employee performance. Instead of having real, and sometimes difficult discussions with their individual team members, some managers have been known to give everyone a “good” rating, regardless of organizational performance.

It’s sort of like this grade inflation thing that everyone seems to be talking about in schools these days. I still don’t understand how you can do better than a 4.0 (straight “A’s”), but apparently, it is possible.

This employee ranking and review is also a good thing in that even outstanding organizations probably have some team members that could benefit in some areas by increased focus, and poorly performing organizations probably have some team members that have performed above and beyond the call.

What this has all led up to, and the point I am trying to make is that when you follow a job description and just do your job, it becomes a question of relative ratings when it comes to reviewing your performance. There is a certain amount of qualitative that inevitably seeps into the quantitative review.

Contrary to what you might think, in this age where the “process” has taken on ever increasing importance, where you would probably think that as a result the quantitative aspects of performance review would be at their strongest, the qualitative aspect of reviews has probably increased.

Think about that for a minute.

As processes continue to ever more granularly define roles, jobs, and their inputs and outputs, the ability to differentiate performance among similarly defined jobs, at least at the high level, becomes smaller. It can almost come down to interpersonal and soft skills as one of the differentiators between similar performers.

Now think back for a minute about that last statement. Have you ever seen that occur?

So, what do you do when just doing your job leaves you open to these types of performance interpretation vagaries?

Don’t just do your job.

Just doing your job is the easy thing to do. You have a job description. You were probably selected because your experiences and abilities matched that job description in such a way that there was a perceived high probability that you would be able to perform the tasks that were outlined in that job description. That was what made you uniquely qualified to fill that role. You were the chosen one.

Don’t flatter yourself.

There are a significant number of people in any organization that can perform any and each specific role in that organization. You may have been selected for that new role, but that doesn’t mean that there wasn’t anyone else around that could do it. Chances are that there were several candidates for that role, and from them they selected you.

I have had it explained to me in a couple of ways, that I will share. The first was that in business, all candidates that make it to the interview portion of the job search are judged to have all the requisite technical and experiential capabilities for the role. If they didn’t, they wouldn’t be called in to talk. All candidates enter the interview process as relative equals. It will be their soft skills demonstrated in the interview(s) that differentiate them.

Remember what I said about soft skills and reviews earlier?

The next is that if we each are truly “one in a million” as the old saying goes, and there is in fact close to eight billion people on the planet, then there are at least eight thousand people that are like each one of us.

There are a lot of people that can fulfill each and every job description.

I guess the point I am making is that the job description is the table stakes in the game. It is going to be what you do above and beyond that job description that sets you apart. Performing against only that job description, regardless of how well you feel you have, or even how well you may be able to demonstrate you have, still puts you somewhere on the “achieved” continuum when it comes review time. You are demonstrating that this is the role or job that you can do and no more.

Regardless of how well things were going, every role that I have been in had facets or areas that could be improved. Sometimes these opportunities for improvement were within my defined responsibility, but many times they were not.

This is where for leaders; the process focus must change. There must always be a bigger picture view that the leader must hold, and be able to rationalize against the more detailed and specific needs of the business. It is not enough to just do your job and fulfill a job description.

You have to recognize on the larger level what needs to be done, and then chart the way to do it. What needs to be done may not reside in your job description. It may not be within the realm of your responsibilities. It may not be immediately obvious and may take time to identify.

The issues that are causing the business issues will however become clearer for you as you perform the tasks that are expected of you. It will not be so much the identification of these business issues that will set you apart. Chances are that the issues are already very well known. It will be identifying the causes of these issues, and the resulting solution that you create (and potentially implement) that will be what sets you apart. Remember what I said earlier about how we react and respond to these issues will define careers and career trajectories?

Again, in short, it will not be doing what is expected of you via fulfilling your job description and objectives that will enable you to continue to move forward. It will be doing the unexpected. It will be questioning some of the basic business assumptions that “everybody knows are correct” and creating a new model. It will be questioning and causing issues as people are challenged by you to move out of their comfort zones.

It will be looking at old problems through the new eyes of someone coming into a new position. New employees in new positions are not yet beholding to the status quo. They have not yet become stakeholders in the existing process. It will be those who are not content to do their job that see the answers to questions, many of which may not have even been asked, and identify the new ways to move forward.

It is not how well you do what you are supposed to do that sets you apart from everyone else. It will be how well you do what you are not expected to do that will differentiate you. It will be important to don’t do just your job if you are to get ahead.

Accountability, Analysis, Change, Creativity, Employees, Leadership, Organizations

Automation

Automation used to be a word that was welcomed into business. Back then we were a disconnected, manual world. If you needed to get more things done, or if you were growing, you had to go get more people to help meet the demand. There was a time that I remember seeing competitors driving advertising trucks around the outside of our business campus in an effort to lure our employees away to meet their growing demands.

But times have changed.

It’s fashionable to discuss off-shoring and out-sourcing when companies now reduce their staffs, but the force that is now causing the largest reduction in demand for employees is automation.

It has been easy to look at China, or any other relatively low wage country and discuss the economics associated with moving production and manufacturing to those locations. It is a very easy way to reduce the cost of labor associated with that production. I have discussed it in the past. We all can probably name several companies that we are aware of that have taken advantage of the economic model.

But do you know what is even cheaper than paying people less in low cost countries to manufacture goods that used to be manufactured in relatively higher wage countries? It’s really a simple answer.

Not paying anyone to manufacture your products.

From 2007 to 2013 manufacturing in the US actually grew about 2.2% per year (~17.6% total), however the number of manufacturing jobs fell. Approximately 13% of those job losses came from off-shoring. More than 87% of the job losses came from automation. (http://fortune.com/2016/11/08/china-automation-jobs/)

Now let’s fast forward only a few years. When you hear the word “automation” it can strike fear in the heart of anyone who is currently working. The active word in that last sentence is “currently”. And it is not restricted to just those in production or manufacturing based positions.
As I have also noted in the past, business and organizations continually try to apply those successful approaches used in the reduction of costs associated with production and manufacturing, to other disciplines in the organization. An example of this is where once only manufacturing were outsourced, so now are other disciplines such as finance, accounting and human resources.

So how does this trend affect automation?

The same rules of organizational cost reduction are going to apply. PricewaterhouseCoopers (PwC) has recently released a study that is predicting that up to 38% of all jobs in the US are at risk for being replaced by automation in the next 15 years. These are not just manufacturing sector positions. They also predict the finance, transportation, education, and food services sectors are also going to be significantly affected. (http://money.cnn.com/2017/03/24/technology/robots-jobs-us-workers-uk/index.html)

In case you missed it, that means that automation isn’t just for manufacturing anymore.

Just about any position that has any sort of a repetitive nature to it can and probably will be a candidate for automation. It is predicted that many of the first positions to go will be those focused on the consumer sector. The continued automation of teller based functions will further reduce the number of people in your local bank. Baristas at the local coffee house may also be endangered. How repetitive is it to take an order for a fixed set of options and then write a name on a plastic cup? If there are relatively similar activities being repeated, the function will be looked at for automation.

Look what Amazon has done to the previously brick and mortar based appliance product purchase process. What was once a trip to the store where you dealt with sales associates and waited downstairs for them to bring out your purchase, is now an online search for the best price, the tapping of a few keys and then answering the door when they deliver your purchase, in some instances in as little as one day.

Of course these trends will be somewhat balanced by many consumer’s distaste for dealing with systems instead of people. But even that is changing. Each new generation of consumer has less and less of a tie to the human touch and is more technically savvy than the previous. And even the preceding generations learn the value, simplicity, speed and most importantly the economic benefit to their own personal finances of the new automated model.

Amazon has been successful not only because they have worked to improve the shopping and purchase experiences. They have been successful because they have also reduced the customer’s cost and simplified their search. No more driving around, visiting stores and malls and looking for a sales clerk to answer your questions and wondering if what you want is still in stock.

If you don’t believe that this is the case, the current number of retail stores that have announced they will be closing starting in 2017 now stands at over 4,500. http://clark.com/shopping-retail/major-retailers-closing-2017/.

These are also concepts that will be applied to organizations and business to business commerce.

However, as noted above, I think they will be primarily focused in internal corporate activities, instead of any functions that deal with corporate customers. I have already noted customers distaste for not being able to deal with and have direct human interaction when it comes to their requests for support when they have an issue. I think we could expect an even stronger reaction if corporate customers were asked to interface with a machine for their complex equipment and service needs.

I would also expect even this type of resistance to reduce in the future as each successively tech comfortable generation matriculates up through management to positions with purchase decision responsibility.

The drive for automation within corporations and businesses has started with the internal functions. Just as the automation of spreadsheets reduced the need for the number of accountants in business, so is the drive for on-line processes, tools and tracking systems reducing the need for the number of other types of support staff.

As processes continue to be implemented and refined, and as tools for the tracking of work continue to expand and go on-line, the business environment becomes ripe for automation. Sales opportunities are now tracked from suspect to prospect to bid to contract to implementation in on-line tools. How much data resides in that tool that can be automatically reviewed, with the generation of sales forecasts, booking reports and expected profitability projections made available with just a few key strokes.

Costs are likewise automatically tracked via on-line time charging and the utilization of already automated production and shipping capabilities. How much easier will it then be to generate booking, shipping, revenue and profitability reports.

People in these support and accounting roles who have up to now been providing these periodic reports and functions need to be aware of which way the automated wind is blowing.

So where does that leave us?

First I think everyone is going to need to “up their game”. People are going to have to get reacquainted with the risk-reward scenario. The relatively safer “support” type roles are going to get squeezed almost out of existence. You are going to have to be able to “do” something, not just support the people who actually are doing something.

It is always the “new” or next great thing that is prized in business. People will have to relearn that following the past methods of success will not now provide them with success. They will have to get used to looking forward and trying to predict what will be needed and then trying to move in that direction instead of relying on what was once needed. The creative spark will need to be reignited in all workers as those who wait to be told what they need to do will probably be automated (or off-shored) out of their current roles.

Everyone will truly have to get used to and good at selling. Selling their products, their services, their vision, their ideas, their value, their future. It will probably not be good enough to align with and support someone else who is able to do this.

Everyone will also have to get good at delivering. Customers will want their solutions in ever shorter time frames. Look at how Amazon is driving toward same day – immediate gratification – delivery for their customers. Customers will be defined as those that use your particular service or value. That means that they can be internal to the organization, external to the organization or both.

And value will not be a report. It will have to be more along the lines of an idea, or the fulfillment of an idea.

Automation is coming. The capability to automate will only continue to expand. However, it will be the ability to generate ideas and conceptualize that will be the most difficult to automate (if ever) and will hence increase in value. The person who can think of new ways of doing things will increase in value.

It will also be the person who can actually deliver and implement the products, services and processes of the future who will also be in demand. As I said, it will be those that are able to “do” things as opposed to those that enable others to “do” things that will be in demand in the future.

I guess it has always been that way to some extent, except with automation the gulf between the two will become that much greater.

Accountability, Achievement, Empowerment, Excellence, Leadership, Objectives, Process, Responsibility

The Illusion of Choice

I find it rather interesting that I read a many different articles and books from many different sources, that become the genesis of many of my own articles. This fact isn’t really that interesting, unless you consider it interesting that I read things that consist of more than one hundred and forty characters, require a certain amount grammar and literacy capability, and don’t use emojis to convey how the author feels about the topic they are covering. What is probably a little more interesting is that I like to write about business, sales and leadership, and that I rarely find the inspiration for my articles in literary sources that are purporting to be specifically about business, sales and leadership. I seem to find my thought applications from other sources that resonate at a little more elemental and hopefully timeless level.

Such is the case today.

By and large I have found most business articles to be somewhat bland and derivative of other previously written sources. They are also somewhat ephemeral and short lived. There was “The One Minute Manager” and then “The Fifty-Nine Second Employee”. Really. They all seem to be related to the idea of “get rich” or “get successful” quick sort of scheme. After all, if someone actually wrote the definitive text for how to successfully run a business or organization and get rich and successful quick, what would all the other authors have to write about?

Some of my preferred sources can go back hundreds or even thousands of years. I think I have mentioned “The Art of War” by Sun Tzu, “The Prince” by Machiavelli, “The Book of Five Rings” by Musashi and the “The Art of Worldly Wisdom” by Gracion on multiple occasions. Fortunately, my inspiration today was not from these sources, although, come to think of it some of what Sun Tzu said could apply…. I’ll leave it to those that have read both sources to comment.

Today my ideas sprung from a few words by the man who was the coach of the team that lost, yes lost, the last national collegiate championship game for American football this year. For those of you that missed it, it was on TV. I bet you can find it on YouTube. Clemson scored on the last play of the game to defeat Alabama. (I make sure to define it as American football, as I do have friends in the rest of the world where “football” is something entirely different. It is what we in the states would call “soccer”. I don’t know why.)

You would think that there would be far more to learn from the Clemson coach, the winner of the championship, than from the Alabama coach, the man whose team lost it. After all, it was an upset. Alabama was favored and was supposed to win, and it fact, almost did. There may be much to learn from the Clemson coach, but those lessons may not apply to business, sales and leadership as well as what the leader of the Alabama team had to say. At least for me in this instance.

Coach Nick Saban, of the University of Alabama has enjoyed sustained success in his field, the likes of which has probably not been seen in decades. He is successful. He has already won a total of five national championships (across 2 different schools) and is annually expected to be a contender for the next championship playoff. He is the example and standard of what every other coach, school and leader wants to be and do.

But he still lost, last year.

When he was asked what he is going to change, and how much he was going to do different next year in order to win the championship, he responded with what can best be described as an old school response.

He said that he understood all the new offenses, defenses, systems and processes that are out there, but that he was not going to overhaul a system just because he had lost in this year’s championship game. He came in second out of three hundred and seventy-five schools, which when thought of in that way, wasn’t really too bad. Yes, the loss hurt, but there are literally hundreds of other schools and coaches that would have wanted to be there in his place. He understood what it took to get there, and he also understood what it would take to get back next year.

It was at this point that he made the comments that resonated so strongly with me. He discussed that having learned what it took to be successful, he learned that there are no short cuts. He referred to it as “the illusion of choice”. He said that so many people want to make the easy decision, or take the supposed easier road to success. A new process, or a new system were the quick cure. He said this was an illusion. If you wanted to be successful (in his profession) there really were no choices.

It required the recruiting of the best talent available. Alabama’s recruiting classes of new freshmen out of high school are routinely viewed as some of the best in the country. Think about the fact that every three to four years, he (like every other college football coach) has close to one hundred percent turnover of his team. But every year he contends for a championship.

It requires a work ethic that is second to none on his part, and it has to be transferred and translated to the rest of his staff and the players on the team. There can be no illusion that talent is enough. It takes hard work and dedication. There is a base line process and preparation that needs to be adhered to.

Many have heard me discuss my aversion to the perceived over-utilization of process that seems to be plaguing businesses today. Yet here I am praising it. Here process is used to prepare the team. They have practiced and been trained on how each individual need to prepare, perform and act as part of the greater team. A process is not used during the game or against the competition. If so the competition would quickly adapt and defeat it. There is a game-plan, but not a game process.

He assembled the best staff possible, that he vested with the authority to get things done and that he held accountable for those various aspects of the team (Offense, Defense, Special Teams, etc.) he had assigned. However he only held himself responsible for the outcome. He never blamed anyone else. It was his responsibility.

It was this litany of decidedly unglamorous basics that he pointed out were responsible for getting him and his teams (multiple, different teams) to arguably the acme of his profession. He pointed out and reiterated that there really was not choice if you wanted to be successful. It took talent, it took outworking the competition, it took everybody’s commitment and buy-in for the team succeed. There were no “get rich” or “get successful” quick schemes.

That didn’t mean that he wouldn’t change and adapt. He is also recognized as one of the best leaders at innovating and modifying his game plans when his team’s talent, or the competition called for it. He has noted that the basics of the game have not changed, but how you apply them can vary greatly in each situation.

As I noted, by design his team membership turns over every four years. He also turns over his leadership (coaching) staff with significant regularity. His assistant coaches are in high demand to become the leaders at competing college programs because of their success and what they have learned. No less than seventeen of his assistants have gone on to lead their own programs.

It looks like the players are not the only ones that are mentored, taught and become leaders.

Sun Tzu, from almost twenty-five hundred years ago, also talks about talent selection, training and preparation as immutable keys to an organization’s success. He is also quick to point out that flexibility and the ability to adapt to new and different situations, and to be able to take advantage of them while either in or on the field are also the keys to success.

It looks like the idea of putting well trained teams in the field and letting their leaders lead them is in fact an idea that has been around for over two millennia. It sounds to me like Nick Saban may be right when he says that if you want to be successful, and enjoy a sustained success, it really is an illusion of choice. While a new process or system may come into vogue, success is really built on the basics of talent, hard work, and planning, and then letting your leaders lead, and not relying on the illusion that some other process or system can be a substitute for one of those basic building blocks of success.

balance, Change, Change Management, Culture, Leadership, Organizations

Organizational Chemotherapy

One of the most hackneyed, trite and stale topics to talk about in business is change. Of course that is all the more reason for me to talk about it. We all know we need to change. This is a given. I do not think there is one person out there that could not identify something associated with their occupation, or some aspect of what they do, that needs to be changed. If that is truly the case, I think the greater question associated with change is not what to change, but how and when to change it.

I recently read an article which featured a discussion with Mark Cuban, the owner of the Dallas Mavericks NBA basketball team and erstwhile member of the board on the television show “Shark Tank”. I am neither a particular fan of the Mavericks (I prefer the Dallas Stars hockey team), nor do I watch the Shark Tank, but I was intrigued by the article. Mark Cuban is known for speaking his mind quite often, or at least he appears to speak his mind quite often based on the media coverage he receives, and upon first blush this particular article didn’t seem to be any more important than any of the other myriad of times that he has chosen to speak up.

I guess I speak up quite often too, but since I neither own a professional sports franchise, or appear regularly on TV, there are not nearly as many media articles that cover what I have to say or write. Therefore, I seem to have to write my own.

I guess having a couple billion dollars can influence the media’s opinion of you. Go figure.

Mark Cuban, while appearing on CNN’s “New Day,” morning infotainment, talk show and celebrity-fest referred to President Donald Trump as “political chemotherapy” for the system. He then went on to explain the genesis of the term was from one of his “smart friends” who said:

“Mark, I’ve voted for politicians my entire life. Do you know what the definition of insanity is? Doing the same thing over and over and expecting different results. So I voted for Donald Trump. Is he poisonous in a lot of respects? Yeah, this is out chemotherapy. We hope he’s going to change the political system. And if that’s the way you’re evaluating Donald Trump, he’s doing a phenomenal job.” (http://www.cnn.com/2017/04/21/politics/mark-cuban-donald-trump/)

I am in no way or form going to get into any discussions regarding politics or the relative values, or lack of values of any politician. I am merely interested in the term “political chemotherapy”.

Using this example, I would extend Cuban’s example to the professional environment in that when an organization or business continues to do the same thing and apply the same process over and over again, and does not seem capable of doing anything else, but continues on hoping for a different result, it would seem that it would also become time for what I would call organizational chemotherapy.

And indeed, we often see that this as the case when it is finally recognized that there is a need for a change of direction within the organizational system. This change usually comes in the form of a new business or business unit leader, usually from outside of the stricken organization, who is brought in. Since they are not beholden to, or vested in the existing processes or structures, it is their role and responsibility to be the change agent, much like chemotherapy, that changes the way the existing business system is operating.

I do not seek to minimize or reduce the hardship that people must go through when they are forced to endure chemotherapy. Everyone I have spoken to who has gone through it, and everything I have read about it indicates that it is as an unpleasant process to endure as can be imagined. Having to ingest a proscribed list of toxic and poisonous chemicals into one’s system on a regular basis for the purpose of eradicating items that if left unchecked will destroy the system, cannot be thought of in any sort of lighter terms.

I am however interested in the analogy that was drawn by Mark Cuban’s friend to the political process, and the similar analogy that can be drawn to the business process and organization.

It seems in both the political system, as well as in the business system, it sometimes takes the injection, or introduction of something that can best be described as a known toxin into the system to get the system to change. This usually occurs when it is recognized that if left unchecked the system can become, or may have already become somewhat compromised, and are unable to correct themselves. The inertia of the organizational and business process in these cases, once compromised are almost impossible to correct from inside the system.

Almost all business systems are risk averse. It doesn’t matter what the organization says. It doesn’t matter if the organization claims a culture that rewards risk. Almost all business processes are created to reduce risk. And one of the greatest perceived risks to business is change.

Change in business requires the system to do something it hasn’t done before. It can be small or it can be large. Regardless, it will be resisted. Over time the resistance to change will become ingrained into the system. The resistance to change can almost become a process unto itself. This point is usually achieved when the stakeholders in the status quo structures and processes have neither the authority or inclination to “buck the system”.

The perception in the organization evolves that the return for the risk of challenging the system is lower than the potential penalty for the continued less that optimal performance under the current methodologies.

This is the point in time for the organization, when it will probably take nothing less than business chemotherapy to force the system to change. There will probably be both good and bad effects associated with it. A stable if underperforming system will become at least temporarily unstable. There will be uncertainty and risk for the members of the organization as they must change what they do and adapt to the changes being imposed, or face exiting the system as part of the corrective solution.

One of the side effects of organizational chemotherapy is that like its sourcing namesake, it doesn’t specifically correct the system. It is actually designed to remove something that is detrimental to the system. While similar, they are in fact two distinctly different actions. It hopefully allows the treated system to return to its normal, more healthy performance level.

I think we have all seen high profile instances of organizational chemotherapy. I have actually lived through one, where a CEO was brought in specifically to change and remove a “good old boy” culture that was hampering the growth and evolution of the organization. It seemed he was successful beyond even the board of director’s expectations in that he seemed to alienate everyone including the board that hired him, and he genuinely seemed to enjoy those aspects of his role.

The issue was that once the culture had changed, there was not a new beneficial system and process available to put in place to replace the old one. The CEO knew how to remove what was unwanted, but did not know how to replace it with what was desired. The company began to falter and performance began to fail. The board then had to step in again and replace the chemotherapy agent with a new CEO who rapidly built back up a new culture based on merit and performance. The company then took off.

The progression was one of starting with an organizational system where performance was secondary to “who you knew” or were politically aligned with; to one where it was essentially toxic to be associated with the old system and regime, but again where performance was secondary; to one where performance and merit were moved to the forefront.

It took approximately three years from when the chemotherapy CEO was installed to when he was replaced. And this represented three distinct organizational systems and processes. It was also interesting that as the solution to the first cultural problem, he only knew how to remove the problem. He did not have the capability to implement the desired final solution for the organization. He focused on his strength which was to remove the undesirable aspects of the original organization. It took someone else with a different skill set to rebuild the new system.

Organizations have a tendency to want to drift into comfortable, known and reduced risk structures and processes. It takes careful stewardship and an eye on the future by the organizational leader to continue to drive a balance between acceptable risk, challenge and new directions, and the continued implementation of risk reducing processes and decisions.

Regardless of how hard an organization tries, it continues to be exceedingly difficult to violate or even change the Risk-Return economic equation. As an organization constrains itself with the drive to reduce risk, it also by necessity also reduces its related opportunity for gaining an acceptable return. Invariably the solution to this issue is for the organization to try and implement even more of the constraining systems and processes to address the new issues, which in turn creates even more organizational drag.

At some point it becomes apparent that a chemotherapy type solution will be required to change the self-defeating process constraints. As shown in the above example, organizational chemotherapy may solve the current problem, but it needs to be closely monitored, because correcting the current set of problems is in many instances not the same as creating the desired final solution and system.

Accountability, Challenge, Decision Making, Leadership, Problem Solving

The Review Process

I got to thinking about all of the reviews that I have had the pleasure of sitting through, or have been sentenced to, as the case may be. Both the ones that I conducted and the ones that I just got to attend. They are a sometimes interesting, and sometimes not so interesting mix of development, product, marketing, finance, sales, operations and ultimately business reviews where there was a little of each of the previously mentioned disciplines covered. They have ranged in length from the relatively short one hour to the interminably long multiple days in length. I have traveled internationally to attend, present or conduct them as well as done the same over the phone. Throughout all of these reviews, the most important thing that I learned is that it is up to the review leader, not the review process, to make the review useful.

I think it is reasonably apparent that no one likes to be the bearer of bad news in a review. We all like to feel that we can and should be able to march triumphantly into the review and present as well as receive only good news. Schedules are being met. Sales are up. Earnings are good. Enough said. Take a bow. Let’s get out of here.

Admittedly I have been in only a few reviews like that, very few.

However, most of the time I have found that a review usually contains some good news, some bad news and more than a significant amount of extraneous information. Extraneous information is the information that is presented about the activities conducted by the presenter, that are other than the assigned topics that they were given to present on. Extraneous information is what fills up the extra charts and time in almost every review. It has evolved to almost become and expected part of the review process.

I think this might be another opportunity for the coining of another one of the specifically not famous “Gobeli Laws of Business”:

“If allowed to go unchecked the amount of extraneous information that is included in each successive periodic review will grow to a point where it renders the review almost useless.”

Since everybody likes to present good news, and since not all news is good news, people will almost always try and compensate for any possibly perceived bad news in a review by presenting more and more other extraneous information. This information, while possibly interesting to the presenter, and is usually positioned to sound like highly functional activity levels and good news, while in reality it is likely of limited use to the person conducting the review.

This type of information distracts from and obfuscates the important information to be imparted at the review, while continuing to maintain the appearance, flow and process of the review. Unless it is specifically cited and prohibited, almost every presenter at a review will probably include some of this type of information “filler”. The result will be overall less time available to deal with any potentially germane or relevant review topics.

I think I have mentioned before that I matriculated through management within the General Management business model as opposed to the seemingly more in vogue Process Oriented business model of today. It seemed then that objectives were mandatory and processes were guidelines as opposed to the current structures where the reverse seems to be the rule. Ownership of an end to end deliverable objective made reviews that much easier. Progress against an objective is always easier to measure than progress on a process.

The purpose of objective oriented reviews is two-fold: the avoidance of surprises, and the identification of actions for the resolution of issues. They are not and should not become opportunities for everyone to tell everyone else what they are doing.

One of the first rules of business is that there should be no surprises when it comes to performance. Everyone should have an objective, know how they are doing against that objective and be able to succinctly report that information. This approach should be applicable to every business discipline. There can be no excuse for “surprise” misses to sales targets, or budget overruns, headcount and staffing levels, profitability, etc. Providing this type of information is the responsibility of the review presenter.

Once a potential issue or objective miss is identified in the review, a plan of action to bring the objective miss back under control should be the next function of the review. A specific set of activities, and activity owners need to be identified and assigned. Performing this type of function is the responsibility of the review owner. Notice that I didn’t say solving the problem is the review owner’s responsibility. I’ll get back to this point later.

I think this also might be another opportunity for the coining of another one of the specifically not famous “Gobeli Laws of Business”:

“The best type of issue to have in business is one that you prepared for, and avoided.”

This is the focus of reviews. To enable the team to foresee, and take action to avoid issues associated with objectives. It should be with these review objectives in mind that reviews are conducted. If the material covered does not directly apply to these objectives, it should not be included.

There may also be a secondary focus on understanding the cause of the identified issue so that steps can be taken to avoid similar issues in the future, but I have found that these types of root cause analyses should probably be taken outside the review. This has the benefit of keeping the review to a shorter more manageable length, as well as minimizing the impression among all attendees of creating a negative environment for reporting issues.

Everyone has issues at one time or another in obtaining their objectives. A public examination of why they missed as opposed to a public plan on how they can recover will usually generate a more conducive environment where issues are identified and discussed as opposed to being glossed over.

If a review is allowed to become a matter of process, where the purpose of the review is lost in the extraneous information that each presenting group imparts to the other presenting groups detailing all the activities they are doing, but precious few of the issues they are encountering, then its value is lost. They should be times to challenge both management and each other. They are opportunities to do better.

I always looked at reviews as opportunities for the team to suggest solutions to issues. Issues are to be expected. Field Marshall Helmuth Karl Bernhard Graf von Moltke, who was Chief of Staff of the Prussian General Staff in the mid nineteenth century is credited as saying:

“No plan of operations extends with any certainty beyond the first contact with the main hostile force.”

This has also been simplified and paraphrased down to:

“No battle plan ever survives contact with the enemy.”

What this means is that once you start the implementation of anything, stuff happens that requires you to adjust both your plan and the way you implement it. In short, issues occur. And how you deal with them will directly affect the success of the endeavor and the achievement of the objective.

The sooner the issue can be identified, and the more information that can be supplied about it, the better the resulting response can be.

This again, should be one of the driving goals of the review. Everyone wants to avoid issues. The best way I know how to do this is to get them identified as early as possible and then take the requisite steps to mitigate, and hopefully avoid them.

I think the hidden key to the review is that each reported or identified issue needs to be accompanied by an associated solution. It should not be the review leader’s responsibility to solve all the issues. This is a situation that seems to have evolved in a process driven organization, in that it is usually only the leader that has purview over the entire system. Hence any issue associated with any step falls to them to resolve.

In an objective oriented review, it should be the responsibility of each individual that identifies an issue to also provide a suggested course of resolution. They are the ones who identified the issue. They should be the ones closest to it and in the best position to affect its resolution.

It will be the leader’s responsibility to accept, reject or modify the recommendation. It should not be the leader’s responsibility to generate the recommendation.

It seems more and more common that reviews are becoming just another step in a process. A box to be checked off. They seem to have lost some of their true purpose. That is a shame.

I have been in plenty of reviews where the time was spent and the motions gone through, and not much else was accomplished. But I can also remember many of the reviews where issues of substance were identified and dealt with. Where team members got to display their leadership capabilities when it came to solving their own and others issues. And where things got done.

They were challenging reviews where performance against the objectives was reviewed, hard questions were asked, and answered, and where the results were what drove the process.

Accountability, Analysis, Decision Making, Empowerment, Leadership, Process Management

Judgement

I read an article the other day by Stephanie Vozza in “Fast Times”. (https://www.fastcompany.com/3068771/how-employees-at-apple-and-google-are-more-productive ) It was one of their “4 Minute / Work Smart” articles. I normally am not too inclined to read these types of articles, but for some reason I did read this one. While it was ostensibly about why employees at Apple and Google are more productive, there was a passage in it that both resonated with me, as well as rang significant alarms. It captured what I have been feeling, and writing about regarding business and leadership in such a succinct way that I felt I had to address it. In her discussion regarding Organizational Drag, and the associated costs and losses to business due to processes, Vozza said:

“This often happens as a company grows, as the tendency is to put processes in place to replace judgment.”

Wow. I think she hit the nail on the head. Process is implemented to replace judgement. I do think there ought to be a qualifier in ahead of that last statement such as “Most processes, when over implemented…”. Many processes when implemented as guidelines do provide a needed and efficient methodology for accomplishing repetitive tasks. It is when they are over-expanded, applied and relied on for all facets of an organization that they cause drag and sap judgement.

A quick Googling of the word “judgement” provides the following definition:

“the ability to make considered decisions or come to sensible conclusions.”

Let’s tap the brakes here for a minute. Are we really saying that we want to replace people’s ability to make considered decisions, or to come to sensible conclusions with some sort of follow by rote process? Isn’t judgement one of the key attributes of business leadership and business stewardship? And not just judgement, but good judgement.

There are a lot of people who have said something along the lines of:

“Good judgment comes from experience, and a lot of that comes from bad judgment.”

Will Rogers, the American humorist said it in the 1930s. Simon Bolivar, one of the great heroes of the South American Hispanic independence movements of the early 19th century, said it in the early 1800s. I think you get my point. A lot of people have talked about the need for, and how you get good judgement. We would all like to think we were just born with it, but that is usually not the case.

The primary method of gaining good judgement is to learn it through experience.

So, again let me get this straight. It seems that by implementing so many processes to avoid the potential costs associated with errors and bad judgement, businesses are both creating the incremental expense of organizational drag that Vozzie noted, as well as removing the opportunity for team members to practice and gain good judgement through the experience of learning.

I don’t know about you, but I came up through business hearing the mantra surrounding management’s desire that we take (reasonable) risks in our efforts to improve the business. This is in line with the risk and return economic model. This model would require the use of judgement to ascertain what the contributing factors to the risk were, and did the expected return justify the business decision in question. The process oriented model would remove these opportunities.

Process, when used as a guideline and milestone marker can be a powerful tool. It seems that whenever it goes beyond this and starts generating ever finer detailed steps, is when it starts to generate issues both in terms of organizational drag, and what I think is potentially the greater long term risk, the stunting of leadership growth.

The Fast Times article mentions the total cost lost to organizational drag associated with process at approximately three trillion dollars. That’s a three with twelve (count ‘em, twelve) zeroes behind it. This seems like a relatively expensive price to pay to avoid whatever the number of errors associated with bad judgement (the learning process) and the costs that they would generate. One would suspect that by just flipping a coin one would hope to be correct on average at least half the time.

By removing judgement in favor of process future leaders are no longer able to get the experience (and judgement) that they will need as they move into leadership positions. The process experience that individuals gain in its place may be useful in a more predictable or production line type organization (secondary type economy sector – producing finished goods, e.g. factories making toys, cars, food, and clothes), but as the economy continues its evolution further into a tertiary sector (offering intangible goods and services to customers) I would think that judgement, and in particular good judgement would not only be preferred, but a necessity.

I think one of the ways to deal with the “Process versus Leadership” issue may be to dial back the drive for process just a little bit. I think we have all heard the adage that if a little bit of something is good then a whole lot more of it should be better. I think we are all aware of the fallacy behind that type of thinking as well. But, it appears to be the creeping mind set of many companies as they grow in size and expand across different geographical and technological markets.

It is all too seductive to aspire to manage all sorts of diverse markets and technologies via standardized processes. If it worked once in one place it becomes a goal to make it work every time in every place. Once that process starts it appears to be a slippery slope of incrementing just one more step in each process to take into account each new business or market variation that must be dealt with. The desire for repetitive and interchangeable processes leads to both product and market biases that can result in multiple missed opportunities as well as the organizational drag that has already been noted.

I think leaders may need to start thinking of the drive for processes as points on a scale. On one end of the spectrum there is a fully structured, process oriented organization. This would be an organization where very little judgement is required, the function or market are stable and little variation is required.

Accounting comes to mind, but that might just be me.

On the other end of the spectrum would be a completely judgement based organization where each new opportunity is unique and would require its own new set of potential processes for implementation. I am sure there are other examples, but organizations that conduct search and rescue operations along the lines of the freeing of the trapped Chilean miners in 2010 might be a good example of such a unique organization.

Obviously, in reality most businesses lie somewhere between these endpoints. There will most likely be multiple organizations within the business that are distributed along the process – judgement scale. What concerns me is that as process continues to be implemented in greater detail and into new areas, business run the risk of both alienating their current leaders in that their judgement will no longer be desired, and hampering the development of their future leaders as the opportunities to gain judgment are replaced with the continually more complex process.

Businesses need to begin learning to resist the desire to replace judgement with process, and understand that there needs to be a balance between the two. Just as many organizations seem to have a built-in resistance to change, they also seem to have a built-in desire for predictability which process seems to satisfy.

However, nothing comes without a cost. The implementation of process can create a stable, repeatable, predictable organization, but its costs can be seen in the organization’s inability to quickly respond to changing conditions, the resulting costs associated with organizational drag, and reduction in the use and availability of good judgement.