1 comment on “Book Announcement: Liberated Companies”

Book Announcement: Liberated Companies

Are you tired of hearing about Agile, New Work, Lean, and Design Thinking?

Did you already experience how the marvelous values inherent to those approaches have been hijacked and corrupted into just another wave of corporate gimmickry?

Do you wonder how your company or team will ever be able to solve its problems more creatively and spirited?

Companies need an update. The way we run most companies today is detrimental on so many levels. It’s neither well-performing nor allowing technology and humans to flourish. Yet there are progressive organizations that show that through distributing power more evenly, we can make the workplace much better than ever before. This book shows how.

The Need

How to enable people to prosper alongside technology is all-important for any modern organization. The more technology inundates our lives, the more humans must be at the center of organizational design. They are the only ones that can make sense of its vast and ever-increasing possibilities. In current companies, people are rarely able to flourish. There is no sidestepping the issue that arbitrary power undermines people’s initiative, performance, and personal development. In the digital age, we need to find new mechanisms for sharing power to make everyone in an organization more powerful – without distributing power so much that companies become indecisive and unfocused.

This book offers a practical method for running companies ‒ using progressive work designs ‒ that is much better attuned to the digital age as well as to human needs. #liberatedcompanies

The Content

Liberated Companies is a business book for people at all levels who are looking for better ways of working yet find it hard to determine what precisely these better ways are. Much has been said and written about digitalization, the agile company, New Work, and the need for more self-management, yet almost everyone struggles to make sense of it all. So many good ideas, so much corporate gimmickry. Most people are uncertain about what’s really important and what really works.

Liberated Companies is a book about management in the age of digitalization. It provides orientation to master the ever-increasing complexity of the business world by showing that human collaboration is more actively malleable than we are accustomed to think or believe. By using and evolving work design configurations, ways of collaborating with one another, we can work ourselves and our organizations into new behaviors and mindsets. The book can be a travel companion on that journey. It provides a map and a compass for those seeking to navigate their company or their team to better human and economic outcomes for everyone in business and society.

The USP

This book helps readers to:

  • Design their organizations, companies, and teams much more actively than ever before.
  • Know what makes really matters for them and their organizations and what can be safely ignored.
  • Map and navigate their organizations’ journey through the digital age.
  • Lead their organizations with purpose, efficiency, and humanity
  • Appreciate, realize, and support everyone’s human potential much better. 
  • Manage in a way much more attuned to the needs of technology and of people. 

Because the book:

  • Makes the fallacies of hierarchical, empowered and self-managed models of working clear
  • Maps the complex territory of organizations in a unique representation of management practice, the “Liberated Company Map.”
  • Distinguishes, based on the situation of a company, those work designs that are most applicable for it out of a library of about 200 work designs
  • Provides a compass to the organizational journey, the “11 Principles of Liberated Companies.”
  • Delivers great examples by describing the configurations of work designs of one traditional and three leading progressive companies. 

The Author

Frank Thun has helped organizations around the globe to digitalize their operations as a Project manager, CIO, COO, and Coach. He studied Economics at the Universities of Kiel, Germany, and Glasgow, Scotland, and holds a Masters Degree in Economics. He worked for start-ups and companies like Daimler, Volkswagen, Capgemini Ernst & Young, General Electrics, Nokia Networks, Bayer, Philips, Schneider Electric and Invensys.  

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I spend my lifetime looking for better ways to run teams and organizations. This is my attempt for a comprehensive answer. I hope you will find it useful.

Liberated Companies- How to Create Vibrant Organizations in the Digital Age“, 380 pages, will be available in hardcover and e-book worldwide in the second half of November.

Sign-up to www.liberated.company to stay in touch AND spread the word – every tweet and post helps.

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200 Work Designs on a Map

It is strange. On the one hand most companies seem to be all alike and not so much different from one another at all: Hierarchical beasts that employ the classical work designs of Feedback, Delegation, Status Meetings, Protocols, Policies, Orders, Rewards, Appraisals etc. to get things done.

On the other hand there are more progressive companies like Google, Buurtzorg, Amazon, Haier, Netflix or Bridgewater that utilize some “leading edge” work design such as OKR’s, Self-Managed Teams, 6 Page memos, Culture Books, Promises Beyond Ableness, Mission Command, Consent Decision Making etc. They often appear to be using quirky ways to get things done differently.

Many people are fascinated by this or that “Work-hack”. Some even try it on their own Organization. Well, I guess by now most people have been subjected to daily stand-up meetings, KANBAN Boards and more engaging workshop formats with lots of breakout groups working in parallel – just to name a few of the better known practises.

What if we could explain companies by the way people are working with another? Introducing the Liberated Company Map.

During the last couple of years I have assembled a library of Work Designs of both traditional and more progressive organizations. All these Agile Work-hacks, New Work or Self-Managed Practices were too intolerably disordered for my limited teutonic mind. So here is my roster for ordering them. It consists of three criteria.

First, all work designs have a primary function, a target that they are used for. I have clustered these targets into nine functions of management in a 3*3 matrix. That order is inspired largely by Henry Fayols classic six functions of management.

The nine types of management practices

Please note that “Management Practices” are a subset of work designs – more on that in later posts, I do not want to get bogged down in theoretical discussions here.

Second, work designs are ordered by the size of the power differential that exists between people. By doing this, I am assuming that the amount of discretionary power that bosses have over employees has a critical influence on a persons behavior. People in more hierarchical, authoritarian companies will weigh every word and deed to not upset superiors, wherelse people in more self-managed organizations will find it easier to disagree and speak up. There is much more psychological safety in more self-managed organizations, and that causes work designs that foster on intrinsic motivation and social team dynamics to work much better than they would work in an enviromment of conformity and fear. I clustered the size of the power differential in four levels.

Companies can be distinguished by the size of the power differential between people

With increasing liberation level, the power shifts away from a manager towards employees and groups. This way of ordering companies is based on a scale proposed by Renis Likert, an American business professor, and is similar to other popular ordering systems, like Laloux’s Teal Model.

Developmental stages of organizational systems: 4 models

Last, I use the severity of a work design as an ordering criteria. The “severity” is the risk of a major backlash occuring if things go wrong with the use of a work design. For example, there is usually no harm in using pratices like “Daily Standups” or “Kanban Boards” but immense harm is done by using “Elected Superiors” or “Self-Service Remuneration” out of place, i.e. without a suitable company environment and other supporting work designs being in place.

Putting it all together, here is the map. It uses the 3*3 Layout of the nine management practice categories, subdivides each of the nine quadrant’s into four sub-quadrants by liberation level, and orders the list of practices in these sub-quadrants by severity. I call this the Liberated Company Map.

The Liberated Company Map

It’s a big map: You need to zoom in to see the details; you won’t know some practices and you might disagree with some of the mapping. I can offer you some help right now: If you want to dig into the practices, here is a complete list. Howeever, there is more to it, more to the art of configuring companies with work designs. But I leave that for the next posts.

I like to close with a preview. Any company can be mapped on the Liberated Company Map: Amazon, Google, Haier, Netflix, Buurtzorg or Siemens and Ford – any company. So here is a mapping of Bridgewater, a company of about 3500 employees and the worlds successful Hedgefund, known for its radically progressive organizational design.

All the management pratices not used by Bridgewater are left out in this graphic.

In the next posts, I will go through configurations of progressive companies and explain how they work. Companies on the very edge of organizational design, such as Buurtzorg, Haier and Bridgewater – but also more traditional companies.

I have just finished a manuscript for a book called “Liberated Companies: A Map and a Compass to Better Organisations in the Digital Age” that explains the topic in about 300 pages and 45 graphics and tables. If you are interested in learning more, sign up to my blog.

And spread the word, if you like what you see.

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Featured Picture by aitoff, https://pixabay.com/users/aitoff-388338/

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I Was Wrong: Holacracy is The Thing!

Holacracy is dead. It is has been abandoned by prominent companies such as Medium or has problems (Zappos); it’s is too rigid; it puts processes over people; it’s unnatural and mechanistic. I myself did a comparison of Holacracy to Management 3.0 and Liberated Management Practices two years ago, followed up by a series of posts and did not judge it favorably.

I was wrong. Two years have passed since then. Time, I almost exclusively dedicated to learn and practice the art of mastering more self-managed organizations. My advice for those seeking to improve companies or teams is to read Brian Robertson’s “Holacracy”, just after you read Frederick Laloux’s “Reinventing Organizations” or listened to his excellent new video series. Mr. Laloux’s work fills you motivation and Robertson’s work will give you as close a view on the future of management as you will ever get.

The crucial thing which I got wrong in 2017 is that implementing Holacracy is not the thing. It is understanding Holacracy that is crucial for a move towards more self-management. Implementing Holacracy without having gone through a journey towards more self-managed for a couple of years before that, will properly get your company, team and yourself into deep trouble. It is simply too radical for most people in an organization to understand. Still, there is no better way to understanding a possible vision for the destination of the journey to “Management in the Digital Age” than Holacracy. The one approach on par with Holacracy is Sociocracy3.0, an updated and now very accessible version of another, similar “Self-management” Operating system. But beside it, I see no equals, no better way to understand Self-Management thoroughly.

Management 3.0 is certainly much more easily digestible with its colorful Mindsettlers app and has its merits to get more agile, liberated ways of management going, but it is ultimately less useful as a vision. It is something that you can use to start your journey but will not sustain you for long, as it lacks consistency and perspective.

Liberated Management Practices, is a term I use (inspired by Issac Geetz and Brian Carney’s book Freedom.Inc), to describe all the various management practices of progressive, more self-managed companies. They are not part of a system at all. Instead, they are just a diverse bunch of practices used at Buurtzorg, Gore, Patagonia, Haier, Bridgewater, and many more progressive companies. They lack order and consistency.

A way to picture all the ways to manage companies these days looks like this.

Agile, The Lean Start-up and Management3.0 are focused on the team level within more open hierarchical companies. The three main methods to scale Agile to the company level, SAFe, LeSS, and Nexus, ended up to be more classical portfolio management methods than anything that amounts to a management system.

Management as we know it — a lax way to describe all the paternalizing ways of organizing the work of individuals — is focused, well, on the individual level. It pays just lip service to teams. Its twin sister “Leadership as we know it”, is more aspirational in its whish to empower people and set good examples, but is ultimately stuck with inwards reflection on one’s own “leadership abilities and styles” or Michel Porter like strategizing and business model-talk.

That’s why Holacracy and Sociocracy 3.0 are so important: Only they light the way to run companies and teams that are truly self-managed. Oh, why do I think self-management is important?

  • Digital Technology will only spread and inundate Organizations if they become networks of people who are free to be critical and creative, with no hierarchy of submission standing in the way. To adopt digital technology ever better is what will give any company an edge. Therefore, it is a question of performance that leads to self-management.
  • In the age of the Extinction Crisis, we will need to see fundamental changes in the way we run companies, too. Letting people work in an environment based on exploitation is doing immense damage to peoples psychology and societies fabric. It is no good way of enlarging anyone’s concerns for the limits of the planet. Therefore, it is a question of survival that leads to self-management.

Holacracy is a great vision to aspire to, as is Sociocracy 3.0. They are well-rounded systems that finally do away with the industrial age’s exploitative hierarchy. They will allow companies and people to flourish more, by replacing coercion with motivation and exploitation with consideration.

The time is ripe for such systems. But companies are overwhelmingly not ripe for the big leap to self-management. Still, every company needs to start on its journey to the digital, green age. If only we could identify a great transformation path to more self-managed, liberated companies! All the Liberated Management Practices that Frederick Laloux propagates, that are the hype in New Work and Agile conferences, are great — but where are the map and the compass which could provide orientation?

 

I have a suggestion to make. But not now. In the next post.

Let me know what you think.

0 comments on “One Hell of a Task Needs Two Pizzas”

One Hell of a Task Needs Two Pizzas

This is part 4 of a series exploring what makes an effective team. If you want to know how to shape the task given to a team and the optimal size of a team, this post is for you.

CoE23

Condition 2: A True Team Task

A true team task is one that cannot be reached by working individually. A task that needs the close cooperation of every person in a team if it is to be successfully mastered. Creating a new system for customer service, expanding to vastly different geographies, coming up with new products and services are all things that surpass the abilities of what workgroups can successfully deliver. It is not that work-groups can’t deliver those things, but results will likely be less than optimal. The typical rate of project failure in today’s businesses is often portrayed to be as high as 70%.

A true team task is often not defined by its nature, but by the performance aspiration.

Let’s take the practical example of implementing a big, enterprise-wide IT application. To implement such a complex system is entirely feasible by working in a workgroup fashion. An experienced project manager is dividing up the work into chunks assigned to team leads, as team leads divide up the work further. While there is some level of cooperation required between team members, this can be organized, for example through the approval of blueprints and in integration tests. Cooperation is limited. Work is parceled out to individuals by managers. Managers rely on project plans that break down all the things to do into detailed tasks and who should do them by when. This proven way of working that will produce results if competent professionals drive it.

So, is implementing a big, enterprise-wide IT application not “a true team task”? There are two answers to it.

  • No, it’s not. It does not really require close cooperation between its members. Instead, such a project is relying on a proven, scripted way of working that allows all individual efforts to be summed up into the final product, the IT system.
  • Yes, it is, if the performance aspiration is high enough. For example, if the ambition is to do that in say two years, a manager led workgroup can do that in the mode described above. However, if the team is supposed to do that within one year, a genuine team effort is what it takes. To cut a year in throughput times needs people to rise above their competent selves and come up with something together that is collectively greater than themselves.  Most of us tend to agree with this instinctively. We know that if we want to achieve something extraordinary, we need some team magic. Moreover, our intuitive understanding is supported by scientific evidence, like the one from Mr. Hackman: A true team can achieve magic.

But unfounded ambitions, won’t do any good, too

The problem is that companies often set extraordinary high-performance targets, because ambitions at the start are high, or they need to overcome the hurdles of budget approval and low bids are what is asked for.  However, usually, the way a project is executed reveals a lack of understanding of the art of building high-performance teams. I have seen this dynamic playing out multiple times in my career in business. While I know that a project could be done in a fraction of time and costs, I did not advise some customer to put in the low numbers. I knew that some clients we not ready for a high-performance approach. Sometimes, most often really, companies as a whole are not prepared to embrace a genuine team approach, as described in the twelve conditions of effective teams. Organizations which embraced my advice may have ended up with long, tedious, but ultimately successful projects. Organizations which rejected that advice and went for ambitious performance targets while relying on traditional workgroup ways of working ended up with significant time and quality problems, budget fiascos, vastly increased employee and management turn-over.

Companies got to lay the groundworks for their ambitions. I have described that point in general terms in a 2016 post Execute crisply with sharp tools.

c11

Besides the occasional major project, true team tasks are essential for day to day operations of teams too. If the performance aspiration of maintenance, customer service, or sales teams is extraordinarily high, the chances are that a high-performance approach is called for and one should have a look at the 12 conditions. If the sum of all individual contributions is not enough to reach the overall target, a true team approach is called for.

Teams are needed if it gets real complex

All this might be understood as a call for overly ambitious targets. Indeed, there is a blurred line here: It is tough to judge whether the combination of skills and minds in a team will make the goal possible or the target is just wishful thinking. Even for those well-meaning, competent managers who know and do everything in their power to provide the 12 conditions of effective teams, an over aspiring, unrealistic or outright silly target might doom the exercise right from the start. As a rule of thumb, it is useful to understand the level of collaboration between team members that is really needed. The less the need to discuss with one another, the less the need for a high-performance team, the less critical the twelve conditions are.

It takes much collaboration between individuals to deliver good results in complex environments or systems. Complex systems are those where cause and effect can neither be predicted with certainty nor is the relationship between a cause and an effect stable. A machine, for example, is not a complex system. It is just a complicated system, but not a complex one, as its parts are known and behave predictably. All social systems involve humans, and therefore are rather complex than complicated systems, as humans act inconsistently from time to time. Therefore, all teams are complex, and companies tend to be very complex.

Groups of individuals can reliably master less complex tasks without much need of collaboration between them. Take for example service teams in call centers. The core of the work is done by individual agents on the phone, during the conversation on the phone. Co-workers can be useful to reflect with before and after the customer call, but all work is centered on the individual without the need for much collaboration.

The thing is: The more complex the task, the more it becomes a “true team task,” the more collaboration is needed and, in turn, the more critical it is to consider the 12 conditions in the work design of a team.

Most companies have configured themselves to be less complex

Indeed, in most organizations, most performance contexts may not lend themselves well for a true team task. Only if the performance ambition is high enough and the nature of the task requires intense communication between team members, a team effort is called for. Many businesses use the term “team” in an inflationary member and think of all groups of people as teams. So, they invest in nice team building events sponsored by HR budgets and helped by a host of business trainers. This is as inefficient as it can get: To spend money or time on team building while the need for collaboration is really not that important at all is to create waste.  It usually suffices to give such a work-group a good understanding of expected behaviors, control the application of those behaviors and let them do their work.

The point is: On a case by case basis, the work group is a better choice to organize work inside traditional organizations. But on the whole, if the whole organizational design of the company would not have been set-up to contain complexity and promote predictability, the team would be better choice. Most companies have configured themselves to be less complex, to suppress the complexity of the market. Designs that allow the complexity of the market inside the company usually involve a bit more structures that promote self-management within a company. But I am getting ahead of myself here.

Condition 3: Team Size 5

Defining a true team task is tricky. It’s time for some refreshing simplicity: The optimal team size is five people. Do not build any teams much bigger or smaller than that. The standard variation around the optimal team size of five is two. So, any team size of 5 +/- 2 is the optimal team size.  Beyond that size, split teams. Beneath that size, is just the pair. For two people working together, the laws of teams are not as relevant as the laws of psychology and good communication.

Even the science on team size is rather simple. With every member added to the group the number of relations which each individual needs to build and maintain increases linearly. In a team of three, a team member needs to develop and maintain two links to the other team members, in a team of four three links, in a team of 5 four links.

However, in order to effectively operate within a social group, it is not sufficient to build and maintain links with all other team members, it is vital to theorize about the ties that others have with one another, too. If you know that Joe and Sue do not get along well in a particular aspect, it may be better to circumvent that problem before it arises. Effective social groups do not only care for the relationships that they have individually, and they care about the links that others have between them. They care for the collective. They care for the team.

The trouble is that the total number of links in a team does not increase linearly. It grows exponentially. The total number of links between team members = N * (N-1)/2, whereby N again stands for the number of people in a team.:

  • A team of three everyone has a total of three links.
  • A team of four has six links.
  • A team of five has ten links, and in a team of seven has 21 links.

This number rises exponentially. In a team of 20 persons, every team member would have to build and maintain 190 connections. Why the jump from seven to eight team members might not seem like a big deal, the total number of links in the collective increases from twenty-one to twenty-eight. While the number of links per person is just increasing by one (from 7 to 8)- that is 14% –  the number of total links in the system is increasing by seven (from 21 to 28), 33%. Increase the team size by three from seven to ten, and this ratio goes up from a 42% increase in the number of links per person to 214% for the total number of links in the group.

This a mathematical way of saying: Size matters. The negative performance impacts of increasing group size are hard-wired into teams. With rising team size people can relate to one another less and less. To invest more in coordinating the team helps a bit but can never offset the negative impact on performance fully. Jeff Bezos is known to have coined the phrase “two-pizza teams” as a rule of thumb for determining team size at Amazon: A team that cannot be fed by two large pizza’s needs to be split.

  • If intense collaboration is what is needed, low team size is the way to go.
  • If intense collaboration is not required, don’t go for the team approach at all and organize the group as a work team instead.

It might not always be easy to cut down on team size, as this or that skill or organization needs to be represented. In this case, consider two things: Either split the team in two and manage those separately or come up with a better definition of the team boundaries, especially who is on the team and who is not.

That’s it for today. In the next post, in two weeks, I will get to discuss a very exciting subject: Do teams need a manager?

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Audible…no: I hope you enjoyed this post. Let me know what you think!

Key points

  • Most tasks can be made a great one for a team if you just level up the performance aspiration
  • HOWEVER, do not level up the ambition, without having laid some solid groundwork inside the organization for those conditions that make teams great
  • Most companies have configured themselves to be less complex, to suppress the complexity of the market. Therefore the workgroup is often a better choice
  • Team Size 5. Team Size 5. Team Size 5. GOT  IT?
  • Two Pizzas – one Team

Previous posts in this series on effective teams:

  1. Performance in general and what makes individual performance: You call yourself a Great Manager? Let Me Hear Your Theory of Performance!
  2. Why Most Companies Should Not Seek to Work in Teams
  3. The twelve conditions for effective teams, including condition one, a compelling direction
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The 12 Conditions for Effective Teams

Part 3 of a series that explores the effectiveness of individuals, teams, and organizations

The factors that drive team performance are very well researched. This post is based on Richard J. Hackman’s research on team performance.   Mr. Hackman has been a Harvard professor who specialized in organizational psychology.[1]He is recognized today as the most authoritative voice on the topic of team performance. He devoted his academic life to the research of teams. In his 2002 book “Leading Teams” he came up with a list of five conditions that foster team performance. I took the liberty of re-ordering and often re-naming these factors for better understandability.[2]

This re-ordered model of team performance is based on a total of twelve conditions. Nine conditions internal to a team, and three conditions external to it. This effectiveness model aims to be collectively exhaustive and mutually exclusive.

Screenshot 2018-09-06 12.59.18.png

All the twelve factors listed do matter, for any team. There is no weighting given with this model. Weightings depend on the specific performance context the team is in at a certain point in time.

The twelve factors are no menu card. You can’t choose to run a team by, say “a compelling direction “and “small size” only while neglecting the other factors and still expect high performance. In general, all 12 conditions must be there for a team to achieve great things. They are reinforcing one another.

Meaning and Spirit – the Internal Conditions of Effective Teams

The internal conditions are those that held within the team. Some of those might be set externally at the start of the team effort, but once the team effort starts they are the essence of what this team is all about. They become internalized into the fabric of the team.

There are two categories of internal conditions: Meaning and Spirit. The five conditions subsumed under Meaning describe what the team is all about:  The direction of the teams work, the tasks that they are doing, team size, the scope of the effort and its composition and stability. Meaningful work engages people. Meaning does describe why something is to done and what people do. It’s a reason to climb up to a summit and a clear view of the mountain. To be clear on the meaning to a team is a good start to pay off the motivational debt of teams.

The Spirit of a team is describing how the team approaches their work: The impact people they feel their work has, their level of aspiration to do great things, the way they think about their ability to speak up, and the level of transparency and trust.

Let’s start with exploring the five factors that make up teams Meaning first.

Condition 1: A Compelling Direction

A compelling direction has several functions in a team setting:

  • Harnessing the team to the targets of the organization
  • A source of motivation
  • Provide direction for decisions to be made
  • Align the actions of all team members towards the common goal

Setting a compelling direction is more than goal setting. To set goals is a classic, often useful management practice. Goal setting is the art of laying out clear goals, for example by using the SMART criteria that decrees that targets should be Specific, Measurable, Attainable, Relevant and Time-based. Setting a goal implies setting an end-point, a definite location that to achieve.

However, the higher the performance aspiration of a team, the less traditional goal setting will suffice. First, in complex environments where solutions cannot be known at the start of the effort, being too SMART in goal setting, will be limiting for the team. If the problem is complex, it is not wise to be too specific. Goals need to be described on a high level and vague level. Being too specific will determine outcomes in ways that are hard to anticipate before the team gets its hands dirty on the complex matter itself. Second, for a team, it is often crucial to figure things out for themselves. It is tough for any team member to latch her intrinsic drive on to the team’s mission if too much is already defined. By supplying overly detailed goal criteria, the freedom of the team to do what it deems to be best is limited.

It is a better idea to get a team to work itself into the subject matter – to advance in a given general direction. It will find out new things and will over time and decide then what to go for and where to end up. For teams, a direction works better than specific goals.

Let me give you a prime example of how to set directions, but not goals.

Mission Type Tactics

Providing a direction is nothing else than giving a mission. This style of command is known as “Mission Type Command” in military command theory. Its origin is the German “Auftragstaktik” is attributed to the Chief of Staff of the Prussian Army Erich von Moltke. Auftragstaktik and has been a core element of German military thinking, and modern military tactics, ever since.[3]

In mission-type tactics, a subordinate commander is assigned a mission, the resources available to attain it, and a time frame. The subordinate leader then implements the order independently. The subordinate leader is given, to a large extent, the planning initiative and freedom in the execution. Thus, a high degree of flexibility at the operational and tactical levels of command is achieved. Mission-type orders free the more senior leadership from tactical details.[4]

The opposite of Mission type tactic is the Command tactic. People using command tactics give exact orders, SMART orders. Maybe too SMART.  To manage teams effectively, managers need to learn a new trick and refrain from providing precise orders. Instead, they need to be vaguer. They need to point in a direction. Now, this might seem like an ideal excuse to give sloppy orders: “I do not need to be exact in what I am ordering you – go find it out yourself.” Sloppy orders would leave the team wondering what to do, wasting time and possibly never get anywhere.

To specify missions and not end up issuing sloppy orders is hard. Giving an excellent mission to the team requires much thoughtfulness on the part of the one defining the mission. Here is some guidance:

  • Describe the mission as an intent, not end-point[5]
  • Give boundary conditions, that act as guard rails
  • Refrain from determining the ways of getting towards the intent

Mastering the art of mission command might be one of the most crucial things that distinguish an ordinary boss from a great leader, both of military as of business organizations. It takes much humility to accept a variation in methods and a variation in outcomes.[6]  It takes the willingness to accept the risk that one’s intent is misinterpreted. It takes willpower to refrain from being too explicit and not declare once own perception to be the truth. There is a lot of doubt and uncertainty involved in trusting other people to do your bidding to their best of abilities.

These are all reasons why mission-type tactics are seldom used in traditional businesses. Mission type tactics are best used in environments of uncertainty, complex situations where swift action based on local knowledge on the spot of the action is crucial. Alas, traditional businesses and management practices are aiming at eliminating uncertainty, to fence it in, to produce predictable, constant outputs. Things that worked fine in the industrial revolution, but that are deeply problematic for many challenges posed by the digital age.

There is another snatch: Mission-type tactics alone do not work well if used in a traditional business environment. To understand a direction, the intent and not the end-point, in spirit and not only to the letter, the team needs to have a splendid view of the organizations need, with all its various constituents who are invested in or impacted by the team’s efforts. Even more than a genuine understanding of the situation, the team needs to have a view on the dynamics of the situation: Is the stated intent really what a constituent wants? The more complex and dynamic the situation is, the more the team needs to develop, maintain and test a hypothesis how the intent of the organization might be changing over the course of the team effort. This level of visibility needs much more close bonds between people and a level of transparency that is hard to find in most companies. It requires a supportive organizational environment geared towards shaping intense personal relationships and a culture of organizational transparency.

Who set’s the Teams Direction?

The first thing is to be clear about is who is setting the overall direction of the team. This is usually not the teams’ job, but the person or group that want something to be done. The need to get something done is, of course, the very reason why a team exists. A team is a tool at the hands of someone or a group to get something done.

There is just one exception to that rule: In a self-governing team, a form of organization used in highly innovative or egalitarian organizations, which are not bound to conventional hierarchy, a team may choose its own direction. An example is a community of interest, which can work even in hierarchical business, where co-workers are forming teams on their own initiative and waiting for followers to “vote with their feet” and self-assigning them to a cause. While this form of a team is still somewhat exotic in a business environment, its results are often attractive. Organizations employing those teams at scale are Google, Netflix, IDEO, Haier, Procter & Gamble, Unilever, Microsoft, and many others. For the overwhelming majority of businesses, most goals need to be set by the hierarchy in a way to serve its needs.

A Mission does not need to be Inspiring

While it is difficult to set a good mission, it is still not enough. The mission needs to be compelling, too. Nowadays we tend to understand the word “compelling” synonymous with adjectives like inspiring, purposeful, or motivating. However, compelling can as well be connected with attributes like coercive, forceful, or void of alternatives. A compelling direction may not at all be a positive one. Take for example the need to close some operations and lay-off people. This can be a compelling target, too, because management has decreed this, and might frame it as a cut necessary for the survival of the whole organization. Most of the time, we tend to think of teams and business of being a growth story, forward-thinking, providing opportunities and winning. This is quite silly, as leading organizations and teams means not only to be starting things but to be ending things, too. An inspiring mission is excellent and much preferable – but a sincere one will do just fine.

But if the direction of a team is not inspiring, how can a team member ever give her or his best? She might be compelled or even coerced to do things, but surely her intrinsic motivation will take a hit and limit her performance, right? Perfectly right, an uninspiring (but still compelling) direction results in intrinsic motivation taking a hit at the start of the project. However, it is just the start of the project. This debt can be recouped. People are terrific to find their sense of purpose once the team progresses. One of the most potent biases there is, the confirmation bias, lets people reinterpret their world in a way to see their actions and the actions of others in a more positive light over time. Individual autonomy enables people to find their purpose even within a compelling but uninspiring setting. This personal purpose might not be felt at the start, but a good team context might enable every team member to find her or his purpose while working towards the goal of the project.

The quest to come up with an inspiring, instead of just a compelling direction is morally laudable, and it is beneficial for team performance. However, it is not needed to achieve high performance in teams. Think of it this way: What is an inspiring target for one person, might have little attraction for another. What can be inspiring on a high level, might be lost entirely in the daily struggle to get things done.  Motivation is a very individual thing. To come up with an inspiring direction that motivates everyone, independently of personal idiosyncrasies, is hard. Not every company is there to save the world. There is a job to be done, and it needs to be done for a compelling reason. That’s good enough. Inspiration is laudable, but it also is optional, often unrealistic and therefore usually ends up existing in shallow corporate slogans only.

To seek congruence between the direction of a team and the motivation of individuals often means to fight a losing battle. Instead, come up with a sincere direction, and let the group dynamics their individual motivational dispositions to the overall direction over time, while working towards the target. A sincere direction is often more practical and meaningful than sending people on an inspired mission invented by someone else or during a group “visioning workshop.”

 Warning: Directions release Energies

The more compelling the direction of the team is for its members the more energy will be released. Surely, releasing energy is a good thing to get things done, but releasing energy is dangerous. Usually, if given a choice between an under-energized and an over-energized team, most managers and organizations would choose an over-energized “squad”. The over-energized team might break things, in its push to get things done, but it gets things moving. But there are problems.

If the organization is not mobilized to a sufficient level for the change that the team is supposed to bring into life and the team is not able to pace its enthusiasm to what the organization can absorb, clashes will occur. These clashes might destroy the team’s energy level and burn significant relational capital that the team needs to succeed. A team’s effort is a lot about pacing. A team leads a change effort inside a company. Therefore, it needs to be visible to the other co-workers and not disappear out of sight of the rest organization. Enthusiasm is a virtue but might lead to frustration. A measured pace is often preferable over short-term euphoria. After all, most really significant changes are rather marathons than sprints.

Next post will take a look at Condition II:  “A True Team Task”. I hope you enjoyed this post. Let me know what you think!

Key points

  • Effective teams require 12 Conditions: 9 internal and three external to a team
  • Two types of internal Conditions can be identified:   Meaning & Spirit
  • The first condition is: A Compelling Direction
    • Mastering the art of mission command might be one of the most crucial things that distinguish an ordinary boss from a great leader
    • Mission-type tactics alone do not work well if used in a traditional business environment
    • To seek congruence between the direction of a team and the motivation of individuals often means to fight a losing battle
    • A team’s effort is a lot about pacing

Sources and Footnotes

[1]Hackman, Richard (2002) ‘Leading teams’

[2]According to Prof. Hackman there are 5 factors that driving team performance: 1. A Real Team 2. A Compelling Direction 3. An Enabling structure 4. A Supportive Context and 5. Coaching. All these factors and not more are represented in the model I give here. Just that I extended those factors to 12, as I think there is too much of importance hidden underneath some factors, especially in factor 3 “enabling structure”.

[3]Mission type tactics has been at the heart of German military doctrine ever since the three successful campaigns for German unification against Denmark, Austria and France at the end of the 19thCentury. A large part of the successes of the World War I’s “Sturmtruppen” (Small team tactics) or World War II’s “Blitzkrieg”, can be attributed to the vast discretion given to commanders at the front. For more an Moltkes command style see Barry, Quintin (2015) ‘Moltke and his Generals – a Study in Leadership’.

[4]Paraphrased from https://en.wikipedia.org/wiki/Mission-type_tactics

[5]In western military this is known as “Commanders Intent”. It is the second item on any mission briefing, just behind a description of the situation.

[6]Does anyone remember the “Fuzzy” Movement in the 2000’s? A hype term borrowed from electronics (“fuzzy logic”) that has been used in business to praise the virtues of vagueness and heuristics.

3 comments on “You call yourself a Great Manager? Let Me Hear Your Theory of Performance!”

You call yourself a Great Manager? Let Me Hear Your Theory of Performance!

“No theory of Management is worth anything if it has no underlying theory of performance”. I am not sure where I read this sentence, but it stuck with me ever since. The performance question is the “holy grail” of any organizational theory. The very reason why companies exist is that they are there to perform something. The very function of the market is to root out low performing companies.

Still, most management advice is of the self-help nature: There is much advice given how to do this or that, without ever being clear on why this or that management action should work. This article is the first one in a series that drills down on the conditions of performance, the underlying theory of human performance as individuals, of groups and of companies.

After all, performance is the crowning discipline of anyone who is managing. A manager/ leader’s job is to get people to do things.

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But there are ways of getting people to do things which will cause people to achieve much and ways that won’t achieve much. So how can management practices be designed in such a way to maximize performance? To answer this question you got to look at the conditions that drive individual effectiveness.

Individual Effectiveness

Why does individual performance occur?

Here is the synopsis of what I learned from my research over the years.

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Internal Conditions

Internal conditions are, first of all, the capabilities that people bring into a job:

  • A set of skills at various levels
  • Cognitive abilities, such as  Intelligence (IQ), Emotional Intelligence (EQ) and specific talents

No big surprises here: You hire for skill. And slightly more advanced, you rely on some personality tests in order to select by cognitive ability (for more on this checkout Hiring like a Pro: Lessons from Google).

But capabilities are not enough. It takes the willingness to use those capabilities, the willingness to fully engage. Engagement can be triggered best by addressing the needs of a person’s intrinsic motivational structure. Of all the literature on intrinsic motivation, I have found the summary that author Daniel Pink made most useful:

  • The urge for mastery, to perfect oneself
  • The autonomy to act
  • To follow one’s own purpose

Of course, no one has the same urge for mastery, the same need for autonomy or the same clearness of purpose. Some people may like to hang loose, spend their time on youtube or engage in social media all day. These people are unlikely to be highly effective. Some may not have found their purpose, their need for mastery and autonomy just yet.

Internal conditions are more or less given to a person, at least at a certain point in time. People are endowed with capabilities and what drives them. It is a package deal. Although these attributes may change over time, they are pretty constant over a longer period of time. It’s hard to change IQ, it takes time to acquire new skills and it takes a transformational experience to shift one’s intrinsic motivations.

External Conditions

A popular myth in western culture is “you are able to achieve anything if you really want it”. Well, I guess that may true – at least as the laws of physics are not violated- but I think a more accurate version of this saying would be “you are able to achieve anything if you really want it, but some things are highly unlikely”. But that kills the motivational intent of this statement, doesn’t it?

To excel as an individual the circumstances of your whereabouts matter.  You need external help. Malcolm Gladwell researched the question of individual performance and dug-out three factors that explain individual excellence best:

  • A supportive context
  • An environment full of opportunities
  • Deliberate practice, ten thousand hours of reflective, focused, professional practice

These claims have been scrutinized in a business context. One of those factors is not important in a business context: Deliberate practice.  Shockingly for Protestant work ethics, which stresses the importance of hard work, deliberate practice is of low value in a business context. It is important for sports and arts, yes. But not in the much more complex, muddled world of business.

A work environment that provides people with opportunity and assistance to perform and grow is very relevant, though. In all organizational or educational research about performance, these factors stand tall.

I have added a third factor: Accountability and Rewards.

In a business context, it is important what people are assigned to do: What is their accountability? People may have great capabilities, possess a great intrinsic drive to excel, they may be part of an organization that provides them with truckloads of opportunities and support, but if they are kept inside a small, narrowly described job they may not be able to fulfill their potential. People need to have the authorization to act.

And not all people are easily intrinsically motivated. Some people respond better to extrinsic motivation, such as money or status that is given to them by others. Extrinsic motivators, financial bonuses, key performance indicators linked to individual pay, are used quite regularly in business settings. They are effective if well used, but tend to crowd out individual motivations or may even encourage reckless behavior, as all those things which are not rewarded will be relegated to secondary considerations.

Combining intrinsic and extrinsic motivation is tricky. The safest path seems to be to rely foremost on intrinsic motivation and to use extrinsic motivators only sparingly.

The Magnitude of Performance: 10X?

Suppose that all internal and external conditions for individual effectiveness are given: What is the difference between the performance of the highest performers and the lowest performers?

An interesting narrative is given by Jeff Sutherland in his 20014 book “SCRUM”. Joel Spolsky, a software developer, compared the time needed to complete a standardized programming assignment at Yale University. Just focussing on those people who managed to get the top 25% of grades, he researched the time spent on the assignment:

  • The top 10% of performers needed 10 times less time than the low 10% of performers
  • The 10X factor was pretty constant over the years and classes

This narrative is showing what the performance differential can be in a laboratory setting. It is illustrative, but not more. In a business setting a quantification of individual performance is much more complex. Even for more routine jobs, such as call center agents, it is very difficult, as there are so many things that are hard to quantify and measure. In a normal line job measuring individual performance quantitatively is nearly impossible. What is the value added by an ordinary accountant? How does that compare to another employee, say in logistics? Therefore, in traditional business settings, one has to rely on qualitative, gut-based judgments of managers.

But two things are sure:

  • Even one good or bad decision of an individual might sometimes determine the fate of the company.
  • The sum of all tiny, daily decisions of all colleagues in a company does a lot to determine the overall performance of the whole company

So optimizing the work environment and management practices in a way to foster the conditions for individual performance is a sure winner. You might disagree with the conditions I laid out, but you absolutely need a yardstick.

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Individual Performance Does Not Equal Team Performance

A question for you: Is most work actually done by individuals or by teams?  That question may sound silly. After all, the sum of each person’s work makes up the work of a team. But here is another perspective: How much of work is actually already structured, in established processes and daily, habitual work practices and therefore does need much personal interaction? I guess the latter is actually the bulk of the work in most companies. I.e. my answer to the first question is: Most work inside companies is done by individuals and not teams. True team tasks, that require intense collaboration between people and can only be solved by their close cooperation, are rare.

I share that view with Richard Hackman, a professor who was specialized in the research of teams. According to Mr. Hackman, most departments are work teams. In a work team, work is parceled out to each individual by a manager, through job descriptions, processes and day to day delegation. Close collaboration, “a true team” as he calls it, is not needed.

Indeed, treating work teams as true teams is very wasteful. Investments in team building of ordinary work teams have no measurable benefits. None, nada, niente, aucun, gar nichts. Still, companies send their so-called “teams”, which are really Work Teams, to team building exercises.

Companies confuse work teams, which make up the majority of teams inside most companies, with true teams. What a waste of resources.

The preponderance of work teams in organizations highlights the need to have a consistent and holistic theory of individual performance in business. The one given above is my best shot.

Let me know what you think!

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action adventure beach dawn
Photo by Pixabay on Pexels.com

This is part one of a series of articles on the underlying theory of performance in businesses.

More on the effectiveness of teams in the next article.

Sources

  • Gladwell, Malcolm „Outliers“, 2009 -> on the external supporting conditions to achieve “outlying” performance
  • Pink, Daniel “Drive”, 2009 -> On the the conditions of intrinsic motivation
  • Rosenzweig, Philip, “Left Brain, right stuff”, 2014 -> On the limits of deliberate practice in business
  • Keegan, Robert et al, ” An Everyone Culture”, 2016 -> On organizational learning that is built on individual growth

…and all the other books found on the Source page.

 

 

 

 

0 comments on “Book Review: Principles. By Ray Dalio”

Book Review: Principles. By Ray Dalio

Ray Dalio has founded and leads one of the worlds largest and most successful hedge funds, Bridgewater, worth 150 Billion$. Last year, and with great media fanfare, he launched his book to explain to the world his management philosophy. It’s a best seller, which is not surprising, given Mr. Dalio’s stellar reputation in the dominant business sector of our time: The guys making huge piles of money out of money: Hedge funds. Does all this money make Hedge funds or investment banks the real rulers of the world? You bet. The US government, the Senate, the Fed, International Institutions, the European Central Bank, the World Bank  – all full of ex-Investment Banker in leading positions. Even the former FBI director James Comey was a Bridgewater employee. The Masters of the Universe – and Dalio is one of the Grand-Masters of the Universe.

If a Grand-Master speaks out, you better listen. So I did. I read the book already a couple of months ago and did write a post about Bridgewater’s practices:  The World’s Leading Hedgefund is Relying on Key Principles of Self-Managed Organizations. But I delayed writing a full review: I was befuddled by what I read.

Outlandish, Orwellian Management Practices

Mr. Dalio is spelling out over 200 principles of “Work and Life,” principle by principles. Like the great Roman Emperor Marcus Aurelius did in his “Meditations.” How fitting.

Irony aside, I actually like the clarity and to read about the accumulated wisdom of thoughtful people. And Mr. Dalio is very thoughtful. He is driven by his worldviews, especially on management, and he share’s it with us. I think that’s grand, mainly because the management practices he employs are often so extreme and apparently over the top:

  • Video Taping all Meetings. All.
  • Giving performance feedback in real time during a meeting of every participant to let the person know how she is doing
  • The “Pain Button” app where people can describe their emotional stress and share it with others
  • The “Dispute Collector” app where people can mediate their interpersonal conflicts guided by a machine

Orwellian speech is rampant in “Principles.” Mr. Dalio talks of “tough love,” or “shoot your friend,” – all for the service of the collective.

The Rule of the Fittest

My favorite example of all those management practices is to let people vote on decisions while weighing these decisions with the “believability” of the person: An “Idea Meritocracy” where every person is eligible to vote, but only the most knowledgeable votes carry decisive weight. The believability is determined by their track records, test results, and other data. In other words: The reign of competence, instead of a reign of populists. Wow!

If only the standards that determine believability can be kept “objective” and free of corruption. Mr. Dalio doesn’t explain how to do that, but my hunch is Discipline. Adherence to formal systems, to the principles underlying the believability algorithm. Adherence to the formal system is prominent in Mr. Dalio’s business empire. Comply with the system or be fired. The attrition rate of new and very carefully selected employees is about 30% within the first year. And Bridgewater is very Elitist in selecting candidates in the first place.

Psychological safety, i.e., a safe place to speak up without the fear of retaliation, is a key feature of learning organizations or any organizations aiming at achieving innovations. Dissenters need to be encouraged. And yes, Bridgewater is a safe place to speak up, with even brutal honesty, as Mr. Dalio writes. People may even raise dissent with the system, and principles might evolve in consequence, if its ruling hierarchs choose to adopt them. But chances are that fear is rampant. Not the fear to speak up, but the fear of acting in a dissenting way, which is not in compliance with the ruling system, the principles. If everything is taped and visible to everyone, political correctness rules, and human fallibilities are suppressed. But control is maximized, too.

The central metaphor for the business which Dalio uses right at the start of the book is the machine. And as cogs in a machine people got to be kept inline, disciplined. Add to that that Mr. Dalio is very close to central figures of China’s ruling party, a country where a  lot of experimentation in social control is ongoing, and the pictures become genuinely, outlandish dystopian.

And whats more: His practices are actually embraced by Robert Kegan, a Harvard Professor of Psychology and one of the worlds leading proponent of the “learning organizations”. Money, Power, and Academia united to create a Dystopia. A possible future where the Rationale, Analytic, Performing runs Amok creating a new super-collective of connected super-minds, where the apparently “dumb” are ignored by the (believability) algorithm. This is can be labeled and sold as “Intelligent Democracy”: The rule of the one with the most merits. Not far from Darwins “The rule of the fittest”.

A Great Experiment

Let’s look at the bright side. It’s is a great experiment based on many of the principles of movements like Agile, Lean, the Learning Organization, Leading Management thinkers and Behavioral Organizational Psychologists propose:

  • Build more reflection into daily work routines in order to enable learning
  • Trust more in the power of the collective than in individual decisions makers through structured exchanges that drive out biases, to come up with better decisions
  • Give everyone a voice and a place and time to speak out
  • Use data gained from objective and subjective sources extensively
  • Address all level of the Organization simultaneously:  Mind-Sets, Principles, and Practices
  • Seek organizational growth in the inert, personal growth of individuals

Looking at Mr. Dalio’s work this way, there is a lot to learn about Bridgewater. Therefore reading “Principles” is absolutely recommended.

Long live Hierarchy & Control!

The most remarkable thing is, Mr. Dalio has added all these routines on top of the traditional management hierarchy.

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(For more on Management Practices and Maturity Level check out some of the previous blog posts 76 Agile Workouts & A Fish and Let a Thousand Nerds Blossom!)

In all of the 539 pages, he does not write a single line about self-managed teams. But the other times he uses the prefix “self” is revealing: Self-accountability, self-discipline, self-reflection, self-accountability. It is the individual how needs to better herself. By sticking to the collective rules set by, well Mr. Dalio. Or the Chinese communist party…

Mr. Dalio trusts the individual to get better under guidance, he trusts collective, believable weighted votings, as long as

  • Superiors may veto any decision and
  • Mr. Dalio (or a governing elite) sets the rules

At the heart, Mr. Dalio’s vision is not about liberation. It is about performance. About making money. If what it takes to make money is to develop individuals, so be it.

But Control is central. Full stop.

Bridgewater might be a great Place for Fawning Alphas

I like organizational designs more that give space for autonomy (a word not found anywhere in the book) and non-mainstream people – call them beta if you want.

Whats more, true innovativeness will not come from an environment that is purely ratio driven and relegates fun to an emotion that is to be reflected on and analyzed – all in the service of big performance equation that is to be solved.

The featured sentence on the promotional page of “Principles” is “Principles are ways of successfully dealing with reality to get what you want out of life“.

A bigger car, I guess. This Hedgefond even wants to exploit life itself. Putting such a line in front of the whole work shows what Frederick Laloux would call intensely “orange” beliefs, beliefs bred in the industrial revolution: It’s about getting things, about scarcity, about accumulating, and finally about consuming life itself.

I am a bit harsh, though. It’s is worthwhile reading:

 It shows how the application of Agile/Lean/ Behavioral Sciences while being stuck in a Mindset of scarcity and control – instead of abundance and exploration- may quickly lead to dystopia.

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This is what I think. What do you think?

 

Sources

 

 

 

 

0 comments on “The Main Managerial Fallacy and the Full Stack Manager”

The Main Managerial Fallacy and the Full Stack Manager

The way most managers do their job is rather dull. It all begins with the very basic assumptions that managers have about their job. Most managers frame their job as being three things:

  • to lead some people
  • to make most decisions
  • to balance the organizational needs of performance with the needs of the ones performing

Basically, they think they are in charge. Which is perfectly right, only that they picture themselves to be in charge of the wrong things:

The Managerial Fallacy

Managers usually think of themselves as being in charge of a performance mission …but they are really in charge of getting people to do things.

This difference between these two frames is far from being subtle.  Being on a performance missions triggers you to think in terms of the mission, to dissect it into its component parts, to reassemble it into a better organizational machine, and to place the workers to operate that machine. It triggers a rational process of solving a performance problem.  This is exactly the thing we have been trained for at school and at universities. This way of working feels natural and comes easily to us. The frame is: “I am in charge of running this”. But it is wrong.

Analytical analysis is an optimal method to solve a mathematical equation, a physical, mechanical or most problem in natural sciences. Given sufficient information, you can rely on the stable causality of the natural laws to come up with an optimal solution. But an analytical approach does not work in social sciences. Here you never have all information, as the information does not lend itself to being measured well. Plus causalities are always hidden and unstable. You can’t predict individual behavior.

In such a much less predictable, social environment the best method to proceed is not an analytical one. It is an empirical one.  You need to try things to find out the best way of doing things instead of assuming that you found the optimal solution. In social systems there is no thing as an optimal solution, there are only solutions that work better at a certain point in time. People and organizations are volatile. The whole business environment is more and more volatile in this digital age. A stable optimum needs to be replaced by neverending tinkering to always try to come up with a better solution.

Therefore the much superior frame is: I am in charge of getting people to do things.

This frame prompts a manager to:

  • tinker for a better solution, continuously
  • to lead people in such a matter so that they can do things better
  • to consider oneself as a manager of a socio-technical system, the performing organization, not of a mechanical device with measurable in and outputs
  • to understand the work of a manager as a craft. A craft that is to be perfected over time, through tinkering, try, error and learning

After all, management (or leadership) is about this:  Getting people to do things. It is not primarily a problem to be solved by the manager. It is not constantly firing a barrage of orders or motivational messages, as this would be tiring and therefore ineffective. But it is about creating an environment where people do those things that need to be done because they want those things to be done.

Dwight

That environment is built from of Management Practices which are often unlike the ones we commonly take for granted. Here is a comparison.

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Management practices are the building blocks of the craft of management. There are hundreds or even thousands of management practices available. Many of those practices have their origins in the Agile or Lean Movements. But the goal is not to adopt as many advanced practices as possible. First, these are not necessarily better than existing ones in the context of a specific organizational challenge. Second, adopting too many practices means creating a highly regulated work environment. This is contra productive. The target is to create an environment where people do those things that should be done because they want to do those things.  Keep it simple – allow freedom.

The Full Stack Manager

Let’s summarize this modern understanding of a more clever way to manage. A manager is:

  • the builder of environments
  • the provider of freedom
  • the one who connects the performance missions of an organization to the calling of the individual
  • the one who experiments with different management practices in order to find ever better ways to engage groups of people

If you continue on this line of thinking, an optimal scenario to run a sociotechnical system may be to even delegate designing, building and running this system more and more to its component parts, i.e. the people doing the work. By going down that path you end up with a self-managed organization, that has left behind the hierarchical way most organizations are organized.

While this is attractive to more and more companies – even parts of the likes of Daimler, Porsche, Unilever, and Michelin – not to talk of AirBnB, Netflix, Haier etc. – this is not a natural given end state. Hierarchy, as an easily understood, time-proven coordination mechanism has its merits.

Nobody can say where the optimum is for your organization. Nobody can say which management practices are best for your organization. But you can find it out: Tinker, you Craftsman!

A Master Craftsman in the trade of Management is what I would call a Full Stack Manager. One who knows how to run meetings, to know how to create transparency, to know how to make decisions, to know how to create a feedback and learning-rich environment etc.

So, why are managers (so often) dumb?

There are a number of explanations:

  • Peter principle: Everyone is prompted to her or his level of incompetence. Only the competent get promoted. But their career stalls when they are incompetent. This leaves most managers incompetent. This logical argument is a heuristic, that is hard to prove or to disprove.
  • Principle-Agent Problem: Managers may appear to act incompetent, but they really have their own agenda. This agenda might entail risk minimization (or – less often -risk-taking), personal enrichment or aggrandizement, or just having a good time. They should be taking care of the organization, though. Alas, the amount of information that the principal (a superior or shareholders) is always less than the information the agent (the manager) has.
  • Getting things done is more important than doing things great: Success in business is a function of doing the right things on a strategic level, good execution and a good dose of luck. It’s not fully correlated with good management practices. In fact, there are studies that suggest that just 10% of a companies performance is related to good management practices.In other words: You do not necessarily need good management to succeed. Survival is mandatory, performance is optional.
  • Human Nature: Power corrupts. We tend to warm ourselves in the shine of it, making us blind to things going bad and feeling entitled to the status quo.

All of this is true and there is not much we can do about it.

But what we can do to decrease our dumbness as managers is to reframe management from “a solver of performance equations” to a “Gardner of socio-technical performance systems”.

Or to say it in simpler terms: From a Scientific Manager to a Gardner of Sociotops.

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Let me know what you think.

Sources:

I am such a sucker for recency bias. So here is what I read last and which therefore didn’t fail to influence this post:

  • Nissam Taleb, “The Black Swan” and “Antifragile“. Both great book if you want to learn the differences between physical and social systems
  • Phil Rosenzweig, “The Halo Effect“. If you want to know why 95% management literature are stories, but not science, read this. The bad thing is, you will be deeply depressed. The good thing is, re-read this article to cheer-up: Experimentation is the way to go, not dogma.
  • The other books I happened to rate highly on the Sources page

Other than this have a look at

0 comments on “Great Individual Performance needs a Serendipitous Work Environment”

Great Individual Performance needs a Serendipitous Work Environment

We attach the label “great” to persons who achieved outlying performance in certain areas through their efforts and talents. Malcolm Gladwell has analyzed such stellar performance in his best-selling book “Outliers” (see Sources ). He found that three conditions explained a lot of an individual’s success.

The Three Conditions for Great Individual Performance

  1. Upbringing & Support: Few great persons would have been great without being raised in an education rich environment and without the support of others. Bill Gates, for example, had access to an advanced IBM computer at the age of 13, already in 1968, and his mother has been a director for IBM
  2. The 10.000 Hour rule: It takes about ten thousand hours of deliberate practice to become a world-class achiever in a particular area. Bill Gates was able to clock those 10.000 hours quite fast, due to his early exposure to computers in 1968
  3. Sheer circumstance, especially the type of selection process used to identify talent. Take elite Canadian hockey player as an example. They are disproportionally born in the first half of the calendar year, as the cut-off date to select players is the 31stof December.  Players are selected by pro teams at an early age, being born is a substantial physical advantage that turns into a career advantage just because some administrative organization set the cut-off date arbitrarily to the last day of the year.

Only the second factor, 10.000 hours of deliberate practice is fully actionable. By practicing hard, challenging ourselves every day, we might achieve greatness. That is a message that aligns well with meritocratic and protestant work ethics: It is a call to work hard.

Working hard does not help in Business

The problem is: Working hard does not always help. More exactly, the truth depends on the field where one aims to be great at. If you aim for a career in gaming, music, and sports, deliberate practice is the key to greatness. According to a 2014 study[1]deliberate practice is by far the most important factor, the factor with the strongest link between the input (deliberate practice) and career success.

But deliberate practice would not help you much less if you seek a career in education: The strength of the link between deliberate practice and success is just about a fifth of what is sports or music. Other things are just more important, presumably, the upbringing and support, which might explain why being poor is such a sticky social condition.

Plus, the relationship between deliberate practice and professional career success is even weaker. There is still this positive relationship, but it is weak, about 1/20thof the relationship in Sports and Music and one-quarter of the one between deliberate practice and Education.

Seek Advice and Show-up to a Place where Opportunity is

So, if working hard not help, are we helpless to influence our chances to become an outstanding achiever? We are not. Statistical analysis is instrumental in telling us something about average probabilities. But everyone human being is unique and can influence probabilities through actions. While changing personal performance or fortune is hard, it is by no means impossible. Working hard still counts for something, if not as much as one would think is “fair” – if judged from a moral point of view. Here is what can be done to influence the other two factors that Malcolm Gladwell come up with:

  • Upbringing & Support: It is never too late to ask for support by others, be that individuals or organizations. It requires courage and the humility to listen to advice and take it in. The ability to listen to advice is a mighty asset. How many people have you met that were impervious to any advice and went on ahead anyway? If you met that kind of people, chances are that, whatever they went after, it did not end well. Even if you are a contrarian and do your own thing anyway, knowing the challenge what you are up against is an advantage.
  • Opportunity is not as God-given as one might think. If you lock yourself up in your four walls, if you do not show up and engage with others, the number of opportunities you will discover is limited. In sociologist, self-help and spiritual literature, there is the notion of serendipity. According to the dictionary “Serendipity is the occurrence and development of events by chance in a beneficial way. A random event that happens in the absence of any obvious project, which is not relevant to any present need, or in which the cause is unknown.” Serendipity cannot be forced, but it can be helped by moving into an environment “that gives luck the chance to occur.” Moving into such an environment can be a conscious step: “Luck favors the prepared mind.”[2]

p491fig3

The 4 Layers of Serendipity

Improving yourself through deliberate practice alone is unlikely to increase personal effectiveness in a business career. It helps a bit, but it is not decisive.[3] One is tempted to conclude that hard work is not critical for the advancement of a career either. But that would be pushing Malcolm Gladwell’s findings too far. After all, he explores the condition that allowed top performers to prosper in any domain, not just in business. He wasn’t out to give career advice for the ordinary business professional.

Being Effective in Business

The more relevant question is: What makes a person effective in a business context? That is a question that HR professionals ponder a lot. In order to hire the optimal candidate, HR professionals need to forecast the candidate’s success inside the organization. That is an arduous task. Personal effectiveness is very hard to measure. An excellent effort to do this measurement and forecasting in an academically sound manner has been described by Lazlo Bock, a director of HR at Google, in his book “Work Rules.”[4]The complexity of this subject does not lend itself well to generalization. But what is clear from Bock’s work is that it is not a list of characteristics that is a good predictor of success, but the results of a series of structured tests. Work sample tests deliver the best results for structured tasks with few dependencies. Cognitive ability tests, psychological tests and structured interviews, varied by the type of job, are instrumental in predicting performance for any kind of job.

There is no list of character traits that make a great coworker. There is only a list of tests that ensure that the mental abilities that are needed to succeed in an organization are there. These tests give the data points, that can be used in an elaborate hiring process that manages to weigh the data with subjective inputs from reviewers in a disciplined process.

A hallmark of a proper hiring process is that the odds that a candidate will succeed in a given organization are maximized. The tests devised by HR center around skills and cognitive abilities, as HR can only ensure that the personal endowments that a new hire brings into an organization are what is needed. But these two endowments are just a fourth of what is required for a person to succeed in an organization once hired. Based on a slightly adapted model of Malcolm Gladwell’s model, outstanding performance in a business can be pictured to be a function of:

A. The Endowments

  • Skills
  • Cognitive ability

B. The Organization

  • The richness of opportunity & support that a business provides
  • Personal motivation – as a precursor to deliberate practice, to engage and thereby investing time and personal cognitive abilities fully in the organization

C. Randomness: Sheer Circumstance

Stated this way, each person arrives in an organization with given skills and cognitive ability. These, in turn, have been determined by Gladwell’s three factors: Upbringing & support, deliberate practice and chance. But once a person enters the organization, her or his performance level will be determined by the organization. Consciously designed or not, organizational design and management practices will determine the richness of opportunity and support. And organizational design and management practices determine the ways that employees can find their personal motivation and tie that to their service of the company.

The Serendipitous, Learning Company

A company designed in such a manner can increase the odds that things happen serendipitously, as it allows its members to grow. To grow skills, to sharpen cognitive ability, to find new sources of motivation.

What is needed is an organization that is designed in a way to harness the power of growing individual capabilities. Not just a design to harness the individual capabilities that one has at a given point in time. Rather a design that recognizes the potential of human growth.

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This is what I think. What do you think?

Suggested Reading

Sources

[1]Case Western Reserve University’s assistant professor of psychology Brooke N. MacNamara and colleagues have subsequently performed a comprehensive review of 9,331 research papers about practice relating to acquiring skills. They focused specifically on 88 papers that collected and recorded data about practice times. In their paper, they note regarding the 10,000-hour rule that “This view is a frequent topic of popular-science writing,” but “we conducted a meta-analysis It found that deliberate practice explained 26% of the variance in performance for games, 21% for music, 18% for sports, 4% for education, and less than 1% for professions. We conclude that deliberate practice is important, but not as important as has been argued.”

http://journals.sagepub.com/doi/abs/10.1177/0956797614535810

[2]https://en.wikiquote.org/wiki/Louis_Pasteur

[3]Shockingly, the most important factor for professional greatness, to advance your career and yourself might be the company you joined. A company that provides you with opportunities to learn, grow and advance.

[4]Bock, Lazlo “Work Rules,” see Sources

 

0 comments on “My CV of Failures”

My CV of Failures

Unless we try, we do not learn. But if we try, we will fail from time to time. I tried a few things in my business life which did not work out. Things that are never mentioned in any official setting. Here are what I consider to be my biggest blunders.

My CV of failures

  • 2000/2001 Not sustaining the Startup I co-founded for longer than a year
    We wanted to build a cloud solution for managing B2B contracts (Links2U.com) on marketplaces. Then the 2001 dot.com bubble burst. We were forced to earn money doing services and not building the product.  But I guess the dot.com bubble is not really to blame: Our business idea was a bit too early & a bit too academic
  • 2008/200Not being promoted to Vice President at Capgemini: Despite all my success in managing projects – my skill and interest in sales have been found wanting. I guess these observations are still correct.
  • 2011 Not getting a Culture of Experimentation going: Who is to blame for today’s sales? Always the weather! I wanted to move beyond that and use experimentation and statistics to help to guide our efforts to run our European Store network. But the methods I used didn’t stick across the organizational silos – all reverted more or less back to the status quo ante after a year. There were always other things to take care of.
  • 2014 Costly negotiation with Microsoft: In negotiating an important group-wide contract on Office365 I failed to invest enough time in building my next best alternative. The skillful negotiators on the other side saw through the veils I employed to obscure that fact. We overpaid.

Failures are embarrassing…

We all have been groomed for faultless performance. That is what schools, universities, and businesses aim for. We have, consciously or not, transferred the basic performance ethics of the machine to the human social sphere: If only everyone would do the assigned job without any fault, the organization would enjoy success. Cogs in a machine doing their jobs.

Therefore we hide failures instead of learning from them. We might reflect on failure silently but rarely choose to talk about them with other people in the organization.  For the sake of keeping our outward appearance shiny and clean, we miss out on a great learning opportunity.

..but vulnerability is a must in high-performance organizations

We fear to be vulnerable. But Vulnerability is one of the core features of truly agile, innovative, liberated organizations.  One can only truly engage with others, if it is safe to speak up and if ego is not in the way of a better solution.

Looking back, one can argue that I did not fail enough: I should have tried more often and aimed higher. I could respond to that: I did try often and aimed high, but I just had success more often than I failed. Alas, that would be a lie. Careers in traditional businesses are made more by avoiding failure than by seeking success:

A failure makes a powerful narrative that may destroy careers. A success is often not more than a statistic.

So the better, time-tested career tactic is to not try too much.

Battles not picked

A second, lesser class of failure could be those times where I might have picked a battle but did not. These are more numerous.

  • Not pushing the envelope in a major global implementation. Instead, I choose to support it but husbanded my energy.
  • Not facing up to a company crisis and help to turn around the company at all costs. Instead, I choose to cut losses and leave.
  • Not transforming a company into a fast, real-time driven business with a masterful supply chain. I weighed benefits, costs, and risks and walked away from this vision. I still deem it feasible, but not in every circumstance.
  • Not driving google cloud adoption all over the company. Instead, I choose to focus on customer demands, which might have been short-sighted.

Success lies in the skill of knowing which battle to fight, and which to avoid. I might have been clever to avoid those battles. Or not. One will never know until one tries.

Failures are Silent Evidence

I think that people should not only be described by the things they have done and succeeded. Failure is an integral part of what a person is. Failures are silent evidence. Being open about it, without “humblebragging”, might be beneficial for everyone around.

Are you willing to be vulnerable?

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This blog is about finding better ways to manage organizations in this more and more digital age.

Sources