It is not innovation that matters, it is agreement. And we might need innovation to reach agreement.
NYtimes does well in its interview with Dr Tachi Yamada, the CEO of the Melinda & Bill Gates Foundation. It’s worth a ten minute break to read the words of a warm person who tells us how he leads and manages an organization and not how we should do it!
(No irony intended, of course. I’ll be reading it again.)
Leave a CommentI am tidying up and I glanced through a notebook from 2 years ago. I was utterly fascinated by ‘emergence’, the phenomenon where a flock of birds, for example, emerges from simple behaviour of birds. With three very simple rules – join the flock, keep up and keep a respectable “stopping distance” – birds individually, and probably without thought, create a flock that looks as if someone did think it up.
We are fascinated with “emergence” in a business context because a naturally-forming flock undermines the idea of the all knowing and ominiscent leader. The planning, leading, organizing & controlling management theory of Fayol goes ‘for a loop’.
At first, I was puzzled that university departments hadn’t taken up this idea more vigorouosly, and more practically.
Two years on, I’ve found my thinking has drifted. Yes, it is certainly true that the role of managers is probably exaggerated (with their pay). But the project of changing management is unnecessary. Overmanaged firms will self-destruct, possibly at great cost to themselves and others, simply because managers have to be paid for and management that is not necessary simply makes a firm unweildy, inefficient and unprofitable.
The real issue is where our better understanding of organization is emerging in business. The best example that is written up is the motorcycle industry of China. The best example where an industry is trying to use similar processes is the aerospace industry in UK and the production of the Boeing 787.
The challenge now is to understand the variations of self-organizing networks.
I think, perhaps, the basic principle is that emergence, by definition, is not willed.
But in real life, the probably the best we can do is create conditions for it to happen. What are those conditions?
The time has come when management is making one its momentus periodic shifts in thought. The textbooks might take a little time to catch up. Most university textbooks don’t do Toyota yet. And after all, as we all know, Toyota is passed its zenith. But as ever, the world moves on, and we learn from engine-makers and manufacturers.
This time it is Chinese motorcycles. How do they make them quite so cheap?
I have been looking for good references to understand the phenonmenon of “local modularization”. At last, I have found a good paper the motor cycle industry in Chongqing where this practice emerged. It is a pdf document presented at Davos 2006 by Hagel & Brown who are now part of Deloittes.
As ever, I’ve made a working checklist for my own good. I imagine it might have been superceded by know, though. 3 years is a long time in today’s management practice.
The key to this thinking is ‘supply chain’ not the assembly line. Now there are specialized master’s degrees in supply chain & logistics. It is a serious business. I have a very amateur take of what we can learn generally about where business is going but this is what I make of it.
Look for networks where people are asking you to do things. Avoid networks and people are trying to ‘push’ services and products (spam you in other words). You are looking for networks that are based on people putting up their hands and calling “I need . .” You can go back to them saying “I can do X at this price.” Then neither you nor them have to say “Please buy . . .” and waste time and money on marketing. I haven’t seen any writing, other than a reference that I’ve listed below, on how networks make the change from push to pull. Please tell me if you have!
Outsource strategically rather than tactically. That is, form an alliance that changes the game. Don’t just buy in finished goods. A strategic alliance
When you are calling for assistance, begin with the long term relationship. Have a discussion about your long term goal. The British aerospace industry have a cracking questionnaire on the questions to ask. It’s worth a look.
At the same time, be loosely coupled. Don’t try to specify the entire process or lock people in. It’s a scary thought at first but every person and every supplier is redundant. That is the natue of pull systems. Utterly redundant.
This feature may seem sem to contradict the second point and this is how the contradiction is resolved. A long term relationship comes from discussing the long term goal. In the past, one person specified the goal and others had to fall in in lockstep. Now long term goals are jointly agreed but if a partner doesn’t deliver, the network simply closes over, just like the internet, and moves on. The ‘self-healing’ of networks, ruthless as it is, is the biggest guarantee of quality (and also a worry for people who study exploitation).
Choose networks where you are one specialist link in a network rather than a dominant player. You don’t need to dominate the network; you need a good network. And good networks are full of people at the top of their game where the network, not just the members, gets better every day.
The British aerospace industy even have a programme to switch the whole industry over to strategically thought out relationships which though not quite pull, go in that direction. I can imagine this point worrying people. Certainly I would like to see work on how we protect ourselves from people who do try to dominate the network.
Hagel and Brown also gave me this checklist for managing our futures strategically. It might be sufficient to answer my two unanswered questions. How do we make the shift and how do we protect ourselves from ‘powerful pirates’?
I need to explore Hagel and Brown’s work more, on their own site and Deloitte’s. These lists are pretty rough but hopefully you’ll find these two lists useful in some way. Comments?
One CommentI listened to Warren Buffet speaking to MBA students a few nights OK. Lest I forget them, here are some of the pearls of wisdom that I jotted down. They work as a healthy reality check.
I picked up a reference to a job description for a Social Network Manager in the White House. I don’t know if it is a spoof. I repeat it here because my first reaction was, “Hey, this is a good job description. I’ll file it away.”
Then I looked at it more closely. It is not really a job description. It is a person specification.
And it is not a good person specification. Each line refers to an expectation that observers may have of the job holder and to a standard that is unanchored. “Excellent”, “Strong”, and so on are intuitive standards that are believed to be commonly held but are obviously not as the writer was unable to articulate them.
If you want to be happy with you staff, then it is up to you to describe the job. Let them see what they have to do. They will have a fairly accurate idea of whether they can do it or not.
Person specifications are useful under one of two conditions.
Scenario 1. The mammoth unchanging organization. You have hired and filled the job over the decades and have objective records of the measurable qualities of the applicants and their subsequent job performance. The measurable qualities are likely to be in the form of psychological tests. After all, how else would we keep bureaucratic records spanning thousands of people and dozens of HR managers?
Scenario 2. A rich leading organization. In this scenario, it is extremely unlikely that the applicant has any idea how to the job. You are recruiting ‘noobes’ and you have the time and resources to train and give a grace time of several job cycles to learn and perfect the job. Under these conditions, we extrapolate (preferably with the help of objective records or otherwise with commonsense) to qualities that allow a person to learn to do the job that we will show them how to do. This technique is especially useful when we want to diversify the people in our organization and recruit people who would not normally consider working for us.
When you are in neither scenario, just write out an accurate account of what you want done. Let people see it. They will self-select.
#1 If you are left with no takers, maybe rethink what you want done.
#2 If you are left with a handful of takers, interview each one and confine the discussion to what you want done. You will soon find out who has the strongest knowhow. Leave other discussions for your security check and get a third party to do that (with your preferred candidate’s knowledge and cooperation, of course).
#3 If you are overwhelmed by competent people wanting your job, then use social media! Start a forum and let the applicant discuss the job with each other. You may learn a lot. To be sure, when they think more deeply about the position, many will recuse themselves. Add some voting too like they use on Stackoverflow. The candidates will quickly tell you who is competent. So will their pattern of voting. You will spot gaming in an instance.
Maybe it is spoof. I didn’t check. Follow
* Excellent writing and editing skills with strong attention to detail; your writing is strong, sharp, and personable
* Strong organizing and campaigning instincts; you can craft messages that move people to act, and you know what actions will achieve the right impact at the right time
* Strong familiarity with social networks such as Facebook, Twitter, MySpace, etc.
* Ready to work hard; this isn’t a 9-5 sort of job
* Ability to work under deadline pressure
* Ability to manage multiple complex projects
* Passionate about engaging millions of Americans in advancing President Obama’s agenda and changing the country
* Candidates must be willing to relocate to Washington, DC
Preference given for experience with:
* Online organizing experience with an electoral campaign, advocacy organization or non-profit
* Complex project management
* Experience using social media for organizing
UPDATE: Here is the link to the original on mybarackobama.com. It follows the format we might expect beginning with the wider picture and then a two sentence description of why the job exists. Again it leaves the exact parameters of the job in the shadows. HRM for organizations with ‘strong internal labour markets’ [when everyone is promoted from within] is quite different from HRM for organizations who have ‘weak internal labour markets’ and appoint from without.
The wheel has turned.
Twenty years’ ago, I put together a corpus of English Language with the help of the English Department at Birmingham University. Books were scanned by hand and we culled the misreads by hand working through the night wearing every item of clothing we possessed to make our computer budgets stretch further. We used several mainframe computers switching from one to another to complete different tasks.
Then we moved the whole bang shooting match back to Zimbabwe on computer tapes and carried on analysing the content using UNIX.
I had forgotten the word grep. Well youngsters don’t grep anymore. They search for ‘regular expressions’. They’ve never heard of computational linguistics. They talk about the semantic web. They munge.
And they are doing fine work using HTML mark up and linguistic markers to search the web for information such as the schools attended by Conservative MPS or the names of officials who have signed off large grants to private companies.
Open data has surely begun though it still seems to be at a hobbyist level. While academics are moving (wisely) from analysis to design (synthesis), hackers want the cut-and-thrust of a quick sortie – a raid on the establishment.
One of the growth areas on the next few years will be learning how to test the quality of answers provided by hackers.
In the meantime, learn to hack. Because if you don’t, you’ll be hostage to the views of the world they put forward.
I always read the questions asked by my MP in the House. If you don’t follow your MP, you might find yourself impressed. They Work For You will send you emails directly to your inbox.
I quickly learned though not to bother clicking through to reading the reply. But today I couldn’t resist.
Mark Lancaster (Shadow Minister, International Development; North East Milton Keynes, Conservative)
Can the Secretary of State estimate how many pages of guidance his Department has issued to teachers in the past 10 years and tell the House whether he considers it sufficient?
Edward Balls (Secretary of State, Department for Children, Schools and Families; Normanton, Labour)
I think that the answer to that is no-I have never sat down and counted all the pages of guidance. What I have done is reform the national curriculum to reduce the burdens on teachers and give them more discretion over the primary and secondary curriculums. It is a great pity tha.t, rather than support the national curriculum, the Opposition propose to abolish it.
Early in my career, I worked for a company whose CEO insisted that if those of us in HR wanted to change a page in the manual, then we need to walk around and change the page ourselves. Physically walk from office to office. Do you know how many manuals you printed and where they are exactly? When did you last check that there is a manual at arm’s reach of every one who might need it?
This dictat taught me important truths about ‘being staff’.
If we believe a policy is necessary, it is incumbent on us to show that it is necessary, effective and costs considerably less than the problem we seek to solve.
I know we have intranet these days. That simply makes the challenge harder. Do people know that we have changed the page? Will they be able to find the page in a fraction of a second when they need it? Are the steps that must be followed laid out from the point of view of a person on the spot? Is the rationale clear? Can an intelligent person understand the principle?
Is our advice good enough to make a difference? Is our advice good enough to last a reasonable length of time?
If we were in the situation ourselves, would we be able to implement our own advice or would we find it wanting?
Yes, indeed. How many pages and do we regard them as sufficient? Wonderful British humor.
No, the Minister is not reviewing the effectiveness of his policy or his policy machinery. But then I didn’t think he might be. I just needed confirmation that our MP, who does bomb-disposal in his spare time, is really this droll. He is.
To the accountants who read my blog, this post won’t tell you anything new, except possibly the details of muddled-thinking that the rest of us bring to corporate valuation. If you spot anything egregiously incorrect, please do say.
For the rest of us, let’s begin with the basics of valuing a business. There are three times when we want to know if a company is healthy or not.
The first step is to “think company”. Accountants do this all the time. Their job is to worry whether the company is a “going concern”. Will the company still be there tomorrow?
Corporate financiers ask a slightly different but related question. If I put $1 into the company, will I get back 10c a year, or 20c, or nothing, and moreover find that when I sell my share I get back 85c not $1?
Can lay people really judge the value of a company?
We might ask whether it is so easy to do this. After all, look at all the people who mistook sick banks for healthy banks.
One thing is for sure, though, if we don’t start paying attention, we will get bitten again. We as employees, suppliers, buyers and citizens will pay the price of not paying attention.
Yesterday, I came across an article valuing companies in the shipping industry. I am not particularly interested in shipping but the article was well structured and it provided a checklist that we can use as a starting point for understanding any business.
The answer will tell you a little about the pressures on the company. Who are they answerable too? And what for?
This question about dividends looks as it is for investors who buy stocks & shares. And so it is. If I buy a share for $1, how many cents can I expect back in each 6 monthly dividend?
We can also ask the question more broadly. Where does the money go in the business?
Have a look at the director’s offices & vehicles? Check out their bonuses. Company’s like to flash money around in a rather school boy manner and it is a bad sign not a good sign. Flash means money is being used to show off and not being used to run the business.
An agricultural economist once said that he could see on arrival at a farm whether or not it was viable. If they had more vehicles than drivers, then they were in trouble because their money wasn’t being used well.
So look around and followed the money. Use some common sense. Sound business people don’t skimp on the necessities, and they don’t allow money to sit around unproductively either.
If they must have to have ‘flash’ assets to impress people in the business they are in, are they really flash, or are they copies, and do they look after their assets. Do they protect their re-sale value?
If they give high bonuses, do they look after their staff, or do they exhaust their staff and then wastefully buy more expensive ones from the market.
It can be tough to separate the appearance of money with sound business. When money is being chucked about, quite naturally we would like to get our hands on some of it. Just stop to do a proper evaluation. How long is this money-wasting going to last? And when it goes bang, will you be sucked down with it?
In a shipping company, this is easy. Which ships de they own? In a mining company, we can ask what mines do they own?
In some businesses, they organization owns very little. Is it the John Lewis Shops who deliberately don’t own the buildings they use? Holiday Inn and Coca-Cola are the same? They own some of their hotels and some of their bottling plants but they generally stay out property business.
Universities are the opposite. Their wealth is usually in their real estate and you can see immediately the problem. The need to protect their real estate value might become more important than anything else.
With banks in recent times, and indeed now, we have to ask what exactly do they own. This is the ‘mark to market’ debate. The value of their assets is volatile.
But let’s keep it simple for now and ask, what exactly does this company own and how do the assets impact on the business?
Now if you see you career as a business, will your career make you money? Would it be better to start a business. Let’s compare two scenarios.
Let’s take a young person who leaves university and goes to work. The 4 questions apply equally to them.
They have one more intangible item which is “career capital”. But I’ll leave that to another post.
Now let’s take a young person who leaves university and starts their own business (or who prepares to while they are taking some starter jobs to get some experience).
So there you are. Here are your choices.
That’s not hard, is it? Now why didn’t we understand the banks were in trouble? Because we confuse consumption with wealth. Consumption is the opposite of wealth. Look twice when someone is living large. Something is wrong. At best, they don’t know of any way to make their money work for them.
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