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Posted July 31, 2011 by Hans Norden
Categories: organizational governance

The Business Governance blog (formerly Organizational Governance) has moved to You can continue to follow this blog at its new web address.


A tail wags dog story

Posted November 27, 2009 by Hans Norden
Categories: Uncategorized

We live in a world of solutions. Anywhere you go you find widgets, tools, and applications in all price ranges, shapes and sizes. Some appeal to us and others don’t. Whether you identify with the value proposition or not, you cannot fail to be impressed by the sheer ingenuity and creative expression of these products and services. It captures your mind and you can easily get carried away by its features and functionalities and be persuaded to draw your checkbook.

Once you take such a solution to your office you might start wondering, how am I going to use it? In other words, I have bought a nifty solution but what’s my pressing problem? Also, is this problem I experience a symptom or a root-cause? Without a clear, well defined and pressing need you cannot justify your investment; you don’t even know if your newly acquired solution is right or wrong for your particular organization, let alone what the Return on Investment is going to be?

Every vendor PREscribes his or her solution; if this is your generic problem than here’s your specific solution! We can all identify with disappointing top- and bottom line results, and employee retention. We all have that to some degree. But, how will you know this particular solution is the one you need?

  • How can you tell the difference between the symptom and the root-cause?
  • How do you recognize the nature of the problem you’re facing?
  • What purpose is your organization pursuing?
  • When will you know you’re successful?
  • How do you tell means and ends apart?
  • What’s your organizing principle?
  • How do you define success?

Without critical examination of these vital questions, you fall pray to confusing means and ends; your solution will take on a life of its own and demands that all else becomes subservient to its success. Look around and every solution is geared towards improving the efficiency of every single business unit, department, work process, computer software and individual employee. Efficiency has now become the purpose of your organization; your reason for being is being super effiicient in every move, action, thought and resource deployment.

Some people claim that the purpose of business is pure and simple; to make money. Their paradigm is that you make more money if you reduce your cost. Okay, lets run with that and push it to the extreme because that’s where you can really see what you’re saying. Lets take Bernie Madoff. His purpose was making money and he reduced his cost by never making the investments he claimed he did and therefore he didn’t incur any brokeage fees either. He must be a hero and shining example because he did exactly what you’re advocating? Wasn’t he extremely successful raking in your money in return for empty promises regarding the principal amount of your 401K investments, while using it as his discressionary income ?

What do you say? Oh, there should be guidelines or critical success factors! And, he is the rotten apple who gives everyone who’s after other peoples’ money a bad rep. Altrnatively, would it be possible that “making money” is a flawed paradigm? Then, perhaps making money should not be the purpose. Could it be something else, something that satisfies a real customer need? Suppose you’d do that better than anyone else, perhaps people would want to pay you a fair profit margin? Hmm, Money is just a universal measurement for success but it’s not what determines success! Making money is the applause for a job well done! How many organizations are worthy of your standing ovation?

Would it be helpful if I assisted you in defining the real purpose of your organization? Next, if I DEScribed organizational dynamics, showing you what makes organizations tick, would you be able to identify some root-causes of conflicts between what you want to achieve and what you’ve been achieving up until now? Once you know the problem, how much it is costing you in terms of not reaching your purpose, could you come up with an Authentic Solution™; a solution that addresses your root-cause, a solution that is aligned with your strategy and that generates synergy within existing processes?

Does the tail wag the dog? Is your success dependent on what your chosen solutions allow you to do? after all, optimizing efficiency cannot fail eroding your effectiveness in satisfying real client needs. Efficiency demands standardization, taking away all the reasons why buyers choose you over competitive offers.

Alternatively, does the dog wags its tail? Does the organization choose solutions as a means to an end for the fulfillment of its own purpose? Once you know WHAT purpose you want to achieve, you start figuring out HOW to achieve that purpose as cost efficiently as possible. Do not confuse money for the purpose of any organization simply because successful achievement of that purpose is measured in monetary equivalents.

Could business be that simple, could it? It couldn’t or perhaps it could … Would it? If I have got you thinking for yourself then I have succeeded in my purpose!

Are you serious?

Posted November 19, 2009 by Hans Norden
Categories: Uncategorized

Two weeks ago, I was a keynote speaker at the annual conference of the San Diego, CA chapter of the American Society for Training and Development.  The theme of the conference was: “Breaking boundaries in Training and Development”.

Thank goodness and kudos to the organizing committee, it was not titled doing something in “bad economic times”. I find that so cheap and especially shallow because the secret to doing business in bad economic times is exactly the same for doing business in good economic times. The difference is that when money, the universal measurement for success and failure, is not an issue, you have more room for maneuver before you dip into the red and have people start asking penetrating and possibly embarrassing questions. This situation is similar to driving your car through bad weather. In other words, you must be performing the exact same activities only within narrower margins for error. Therefore, the elements that determine success or failure are your aptitude for the job, your ability for critical thinking, your personal judgment and how well you have prepared your organization up until now.

Consequently, the boundaries to break are not found in optimizing the activities that we perform but in changing our thinking and judgment about the activities that we select to perform every day in order to bring us one step closer to the organization’s purpose. Just imagine what extra-ordinary organizations we could build during prosperous times, but fail to do!

What bothers me about the notion that there would be a secret to doing business in bad economic times is the suggestion that “the economy” is a condition happening to us; we are victims of some outside force that we cannot influence. But, who is the economy? Is it possible that we experience an adverse economic climate because of an adverse way of doing business? In that case we CAN influence the economy because we ARE the economy.

During the conference it occurred to me that different trusted advisors to executive decision makers display two different, and sometimes mutually exclusive approaches:

1)  Ask the CEO what s/he wants and then cater towards that goal in an effort to manage her/his expectations.

2)  Conduct a root-cause analysis about what the organization needs to thrive/survive and suggest a course of action to arrive at an Authentic Solution™.

It takes guts or a real sense of duty placing the needs of an organization over the wants of a decision-maker. You may loose the assignment but at least you’re not assisting in the erosion of our economy. I believe that advisors fall into the following categories:

A)  Those that mean well but who are ignorant about the bigger picture effects of their advice on an organization’s chances for future survival.

B)  Those knowing full-well the bigger picture effects of their advice on the organizations future survival but who gave-up trying to overcome an executive decision-maker’s resistance to change.

C)  Those whose purpose in life is to assist executive decision-makers in their pursuit of sustainable business practices that prosper all, by choosing humanity to define organizational behavior.

The first time I heard a successful advisor admit to telling executives just what they wanted to hear so they would feel good about themselves, I said to him: “Are you serious?”

You can’t fix what you don’t understand

Posted November 18, 2009 by Hans Norden
Categories: Uncategorized

W. Edwards Deming, the American behind the success of the Japanese motor industry coined the following phrase: “If you cannot describe what you’re doing in terms of process, you don’t know what you’re doing.” I think he’s spot on, so let me clarify my position.

The simple fact that we manage to get up and get dressed every morning doesn’t mean that we know what we’re doing. I challenge you to put it to the test. Take pen and paper right now and write out every single step you take from being woken up by the alarm clock to getting into your car and off to work. Go ahead, I’ll wait … Have you got that? Now here’s the fun part; tomorrow morning I want you to take this roadmap and follow the process step-by-step to see how it differs from your daily routine. That’ll tell you how well you know what you’re doing!

 This “Knowing-Doing Gap” applies to many areas of our lives. For example, the fact that we operate a car does not imply that we know how to maintain or repair it ourselves. Or, the fact that someone can decipher your medical stats and interpret your lab-reports does not imply s/he is qualified to perform any invasive procedures on you, right? The same applies to executives. No matter their greatness in running the day-to-day business, changing the business to accommodate growth or adapting it to economic and market challenges is a different ball game altogether.

 I hate to be the bearer of bad news but it’s been my experience that many executives don’t know, for example, the difference between the Sales-Process and the Sales-Department. Therefore, you can’t fix what you don’t understand. Some believe otherwise but sooner or later, they’ll catch up on their education. To this day, I know this to be true because as a seven-year old, playing with my electric model train I thought I had electricity all figured out until I held in my little hands the small gauge wires attached to a 12 volt light bulb and inserting them into the 220volt wall outlet. That’s how I found out how much I knew about electricity. That outlet at my parents home is still black …

 The problem lies in our education. We follow Newtonian mechanics that says that the universe is a machine and in order to understand its complexity, we should take it apart and study the pieces. Therefore, every formal education creates specialists and only few people understand how the pieces fit together; how one piece is related or even interdependent upon another piece. Consequently many experts advise business leaders by PRE-scribing a generic course of action. There’s nothing authentic about performing someone else’s tricks, also known as “Best-Practices”. Besides, “putting the pedal to the metal” is a rather inaccurate way of “explaining” how a car accelerates. What are you going to do when you step on it and nothing happens?

 I advocate DES-cribing what functions the organization performs; taking inventory of the departments, systems and tools and then analyzing their behavior in relationship to each other. I firmly believe that executives will then be able to discover how to operate and change their organization themselves. Gaining insight into the relationships between means & ends and cause & effect allows for better decisions, and creating Authentic Solutions™ that differentiate your organization from the rest. And that’s how you survive; by developing a sustainable competitive advantage. You should know that Organizational Dynamics is something that can be learned. It doesn’t happen by osmosis; you need to take action or accept the consequences. I’ll leave you with another quote coined by W. Edwards Deming: “Learning is not compulsory, neither is survival.” Contact me if you cannot explain the difference between the Sales-Process and the Sales-Department; I’ll be happy to oblige.

Fool me once …

Posted October 21, 2009 by Hans Norden
Categories: Uncategorized

The top-three business challenges of which about every executive complains are:

  1. Bottom-Line results
  2. Top-Line results
  3. Employee retention

A local Human Resources consultant told me that the overall employee retention rate for San Diego County, CA stands at 18 months!

Psychology magazine reported in a 2007 issue that people quit their jobs not because they want to get out of their current line of work but to change supervisors.

Cranfield University, UK, reported in a recent government study that 70% of all employees are not engaged.

W. Edwards Deming, the man that put Japan on the map as an Industrial nation after their defeat in WWII, found that 94% of all problems originate from the system. No more that 4% of all problems are directly attributable to a single individual or a group of individuals. Only 2% of all problems stem from technical failure.

James Reason, the British psychologist and expert on the topic of Human Error concluded that:

  • Human error is not the cause of failure but the symptom of a failing system.”
  • Although we cannot change the human condition (HN: making mistakes), we can change the conditions under which humans work.”

Can you see a pattern here? Do you see a possible cause and effect relationship between creating an employee-friendly business system and an increase in profitability, demand for products/services and employee satisfaction?

It’s no secret that happy employees are productive and efficient workers. Yet we do not endeavor to improve the conditions under which humans work. We keep stripping away at human factors, which amount to only 4% of all challenges anyway, expecting a different outcome. Guess what … the results are even worse than before! Determined to get it right this time, we’ll commit to doing the same thing all-over again but this time we tell ourselves to work smarter not harder!

Who do you think we’re fooling? But, the bigger question is WHY do we keep fooling ourselves? What do you think? How do you think we can break outside that box?

You’ve to gotta wanna! You need a compelling argument; a purpose or reason for being! Find something for your employees to rally behind. Don’t throttle them because they’re the only engine you’ve got to drive your success. Good luck!

The Myth about Change

Posted October 19, 2009 by Hans Norden
Categories: Uncategorized

There’s process improvement and then there’s change. The first one is a matter of doing more of the same but better as in performing ordinary activities extraordinarily well. The latter is about doing something else altogether. In other words, change requires changing ones behavior or habits. Changing ones behavior or habits requires one changes ones belief.

One of my great teachers, Mary Morrissey, taught me this great line: “If I didn’t believe something was impossible, what would I do?” The freedom to doing what you want to do is on the other side of the fences we build all by ourselves. Just by opening one corner of your mind to the possibility that your dream can be realized, changes your mindset and leads to action. You don’t have to buy-into it yet or throw your current belief overboard. Just allow yourself a thought-experiment, reminding yourself of the fact that any real change was ridiculous until it became mainstream. Here are some, now, funny examples:

  • When the Paris Exhibition closes electric light will close with it and no more will be heard of it.   -Erasmus Wilson, professor at Oxford University, 1878.
  • This “Telephone” has too many shortcomings to be seriously considered as a means of communications. The device is inherently of no value to us.   -Western Union internal memo, 1876.
  • There’s no reason for any individual to have a computer in their home.   -Ken Olson, president of Digital Equipment Corporation, at the Convention of the World Future Society, 1977.
  • 640K ought to be enough for anybody.   -Bill Gates, 1981.
  • Aero planes are interesting toys but of no military value.   -Maréchal Ferdinand Foch, professor of strategy at and Commandant of Supérieure de Guerre, 1911.

All those inventors had a dream or a vision. Something was pulling on their heart strings. This is what the late Joseph Campbell, American mythologist, writer and lecturer, best known for his work in comparative mythology and comparative religion, described as the “Hero-Adventure”. When ordinary people answer a call to go on a journey of exploration, mostly about themselves, they experience a mental transformation and upon their return to society they instigate great changes. It’s this great unshakeable belief that something is possible, that fuels their dogged and often times infectious determination. I am reminded of the famous quote: “When you desire, it wont be a fairytale” by Theodore Herzl (May 2, 1860 — July 3, 1904), the seer of the State of Israel.

Real change is a transformation of your mind and not of any conditions in your environment. This month, we’re celebrating the 100th anniversary of Napoleon Hill’s famous book “Think and grow rich” that elaborates on the importance of having a burning desire. Without a burning desire there’s no incentive to changing your mind. Without the myth of the Hero-adventure, it’s hard to grasp why anyone would want to wander so far outside their comfort zone. And yet, we know that life is about growth; changing from a baby into a toddler, an adolescent and an adult. Everything we wish for is just outside our comfort zone; on the other side of the fences we built all by ourselves.

Therefore, real change is about myth; in particular about executives accepting the invitation to embark on a transformative journey. Real change is about the Fork in the road where you must decide on either persisting in conventional thinking or embracing expanded thinking. “Two roads diverged in a wood, and I– I took the one less traveled by, And that has made all the difference.” This is the last sentence of Robert Frost’s famous poem “The Road not taken”.

Sending middle managers to transformative trainings and coaching sessions is admirable but will not contribute to any significant change until the executive with ultimate responsibility and authority buys into the idea of change. Without executive sponsorship there will be no delegation of authority nor any allocation of resources to facilitate change. Therefore, we need more myth, exposing decision-makers to inspiring stories of people that became leaders once they had found their cause or their purpose in life. What is yours?

The Elephant in the Economy

Posted October 19, 2009 by Hans Norden
Categories: Uncategorized

My favorite change management projects are those where no-one denies there’s a big problem and yet no-one has made any mistakes. You know what, often times they’re right! Everyone is just doing what they’re expected to be doing but once I paint them the bigger picture perspective some activities stop making sense.

The same applies to the Economy; we know we have a big problem but no-one really made any mistakes …. well, apart from some rotten apples that spoiled the barrel. Let’s see if that’s really true or not. Everyone is talking about how “Bad Economic Times” are destroying businesses, like the Economy is some awesome outside power over which we have no control; it just happens to us without us having a hand in it.

As a consultant I look at an organization as a collection of actors that display a certain behavior. Actors can be identified as people, systems, departments, etc. Their behavior is how they perform their tasks and how they relate and interact with other actors, revealing their relationships and interdependencies. Then, the problem or challenge emerges as a discrepancy between what we say we’re doing and what we’re actually doing.

So, in painting the bigger picture of the Economy, we can identify all businesses as the actors and their performance as their behavior. We know there are no accidents, just cause and effect relationships. That means that the Economy is bad because of bad business rather than the other way around.

Ah, I can see some people straightening up and getting ready to fire back for attacking free enterprise. Please bear with me a little longer while I explore our common interest. We want a healthy Economy, right? Progress and prosperity for everyone, isn’t it? The problem, as I see it, is that everyone wants to win and our mindset has been programmed through sports that one can only win if someone else looses; a zero-sum game.

This form of mental programming dictates organizational behavior that defends its rights to exist and they show determination to doing whatever it takes to defend their territory from being invaded by “the enemy”. Although this line of reasoning is logically correct, it may be morally reprehensible. It might be legal or not illegal or there is no law prohibiting it but that does not make it morally sound. Morally sound refers to contributing in a positive way to the health of the Economy.

Perpetrators are typically few in number and highly motivated by the prospect of reaping big, certain, and immediate profits, while the losses are spread over large numbers of individuals. There’s only little push-back because each loses only a little and would receive only small, uncertain distant profits even from successfully undoing the minority’s grab. These measures benefitting a small minority at the expense of a large majority is often celebrated and studied as Best-Practices. Most leaders aspire to emulating these “great wisdoms and insights” of big-business. They pay large sums of money to learn these “Secrets” from experts at institutes of higher learning. That’s why there’s a distinct pattern in failing organizations; they’re all practicing the same secrets, one way or the other.

The dominating thought that celebrates winners is that the Ends justify the Means. Experiencing a winning streak makes us feel invincible; no-one can touch us! Then, when one does get caught with their pants down, we are outraged. However, nothing really changed, except for exposing the fraud; it’s okay as long as we don’t know its a fraud.

Good Economy originates from good business. Good business originates from creating real value for buyers. Real value is created by people who care about the welfare of other people. Okay, you might point at the rotten apples, the executives of the companies that failed, making them the scapegoats for the bad Economy. However, if you’re following the same “secrets” then you need to remind yourself of the law of cause and effect; look at the relationship between your thoughts about doing business and your employee retention rate, the relevance of your products and services to the lives of your buyers (Top-Line results) and how well they appreciate your contribution to the Economy (Profit margin). It might be a coincidence that employee retention, top- and bottom line results are the top three challenges that most organizations complain about. On the other hand it might not. That’s the elephant in the Economy and it’s not going away until you wake up and take action!