Archive for October 2009

Fool me once …

October 21, 2009

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!

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The Myth about Change

October 19, 2009

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

October 19, 2009

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!

Connecting the dots

October 8, 2009

Have you ever noticed that when many people observe the same event how each has a different interpretation of what happened? It all goes back to our mental conditioning through socio-economic background, education and personal experiences. We become more alert, remain oblivious or desensitize. The same applies to our unique qualities. We have a hard time recognizing them ourselves because we are who we are and don’t know any better; its our blind spot.

As an independent consultant I observe organizations with different eyes than many of their decision-makers. It comes naturally to me to look for structure; specific patterns in the way organizations operate. Patterns reveal themselves in the form of Actors and their Behavior.

Actors are people but also departments or systems. They are the building blocks that are there to perform a specific function. Once the Actors have been identified, I look for their behavior; what do they do, how do they do it, why do they do it and how do they interact with other Actors and their behavior? This is all about relationships and interdependencies.

Frederick Winslow Taylor, the father of Scientific Management, unraveled organizations to their component parts and individual activities. His aim was to improve efficiency through specialization. In other words, his analysis broke down the structure and took away the meaning of individual activities and jobs; do you remember the Charley Chaplin movie “Modern Times”?

The challenge before any decision-maker today, is to tie everything back together again. Strategic planning, social media, customer service, operational efficiency and on-and-on are very interesting but they derive their meaning and thus their value only from their relationships to other actors and their behavior. They simply cannot be dealt with in isolation of the organization as a whole.

Taylor’s ideas about operational efficiency were very effective when there was still a lot of slack to be picked up. Once we reached an optimum, it became harder and harder to achieve any gains without eroding the benefits that made the product or service successful in the first place.

Customer service is a great example of taking efficiency to an extreme and its subsequent damage to the organization’s reputation. When you call, you have to listen to a recording with an endless number of options that are irrelevant to your need. Then they suggest you don’t bother them by going to internet where you can figure it out yourself. Just in case you could get hold of a real person, that person can only follow a fixed script that s/he reads off a computer screen. Obviously, no matter how kind and willing your customer service person is, s/he cannot do for you what the system does not allow. Oh, did I mention that when you were on hold, a recording emphasized how much they value you as a client and how much they are committed to quality? There goes their credibility down the drain.

The moral of the story is that clients don’t care about your efficiency and that they vote with their feet. Customer service people are justified in blaming the system for their inability to satisfy clients. No wonder that employee turn-over is high in customer service and I wonder if the subsequent cost of continuous recruiting and training is even considered in measuring net efficiency gains. The heart of the matter goes right to the top of the organization. After all, it requires a high-level decision-maker to sign-off on specifications for designing, building, implementing and accepting investments in new strategic initiatives.

This executive should have evaluated the real value of efficiency gains in relationship to how clients experience the Brand. After all, a Brand is about the behavior of an organization as a whole and its perception by individual clients. A Brand is not some marketing-sauce made out of fashionable colors, suggestive logos and catchy slogans that is poured liberally over all your marketing campaigns. It has to mean something and there should be substance to your claims. It has to be a coordinated effort and sometimes, less efficiency in one department means more profit in another. All you need to do is connect the dots and paint the bigger picture. Call me direct at (858) 764-1969 to ask me how!

Judging vs. Thinking

October 1, 2009

You should have seen this scene and I wish I’d remembered the title of the movie. Picture this; the scene is set in an Asian country where two young and beautiful American women are visiting a local market. They pass the many stalls with fish, vegetables and crafts when they stop and look at a stall with cute little puppies, squeaking for attention. They’re so adorable and one of the ladies, you guessed it, is going soft in the knees. She buys the cutest of them all and when she reaches for her wallet in her handbag, the sales lady hands her the dog in a nice kind of Nordstrom’s bag. Then, horror strikes as she peeks inside the bag … the little puppy is dead!

What happened? West meets East; two cultures collide. The American woman was buying a pet and the Asian woman was selling food! Confusion all around; the American woman is speechless and outraged and rightly so. The Asian woman is equally confused about the American woman’s reaction; didn’t she get what she wanted?

This is such a great example of a dilemma; a di-lemma or two lemmas. A lemma is a statement that affirms or denies something and is either true or false. See, true or false is thinking in terms of logically correct reasoning. On the other hand, right or wrong is judging; putting your opinion on a situation based on the models you created in your own mind according to your conditioning during your education.

Everything depends on your mind’s conditioning; the values, beliefs and cultural background of your upbringing. Both women had their own line of reasoning that was true to their own cultural heritage but the outcomes were very different. Not only are they not the same, they cannot be reconciled because each argument stems from a different starting point; puppies are pets and puppies are food. Therefore, let’s suspend our need for judgment, labeling someone or something as right or wrong and accept the differences as they are; different from your expectations.

What does that have to do with Organizational Governance! Everything, because success and failure depend on the expectations of your principal or buyer. Don’t assume anything but ask explicitly: “How will you know that we are successful?

I belief that we are in so much trouble because we are confused about our purpose or what we expect as a sustainable outcome of a commercial enterprise. If you believe the purpose is making money, and you do whatever it takes, you might have a run-in with the law or local ethics and beliefs. For examples, may I refer you to the Economic news of the past year? How rich is it to spend your golden days in a minimum-security facility?

On the other hand, if you believe the purpose is to provide buyers with utility, a real product or service that is of practical use, and you do whatever it takes to satisfy your clients before, during and after the transaction, people will come back because they value doing business with you and they’d rather spend their money with you than with anyone else. They are even willing to pay you a premium, wouldn’t you agree? The premium is an additional profit margin, over and above the industry-average. You are making money as a result of pursuing the realization of your purpose!

The lesson learned is that at the end of the day you want to experience peace of mind; knowing that you did the right thing in the form of leaving behind a thriving company as your legacy. That’s what Organizational Governance is all about. Just like the centrifugal governors installed since the 17th century in the windmills, for which my home country is so well known, they prevent the system from destroying itself. Isn’t that what you really want and expect, continuity? Are you willing to do whatever it takes, even changing your own mind?