Swinging the Pendulum of Change

I am listening to Lou Gerstner's book - "Who Says Elephants Can't Dance" and am struck by the similarity between his account of his leadership and IBM, and that of every other CEO-turns-around-company book I have ever read.

This is not to say that the recording is boring, which it is not. It's just that there is a common plot behind each of his stories.

In the same way that all operas have 3 parts (I think) and all cricket matches revolve around batting and bowling, I have come to believe all successful turnaround CEOs basically have the same story to tell.

In essence, all companies that are unsuccessful fail because a gap develops between them and their customers. Often, the gap is created when what they have always done successfully stops working.

At a very basic level, the company could just "stop doing it." With simple changes, this is easy enough to do.

However, for complex changes involving hundreds or thousands of people who are entrenched in decade-long practices, the insight that change needs to happen is only the first step. What is much harder to bring about is the large-scale change in thinking that each individual must undergo - a change that cannot be forced into happen with carrots and sticks.

Instead, it must be articulated repeatedly until people are able to convince themselves.

To perform this kind of miracle, CEOs need to be able to identify the frameworks that underly the weak positions that companies fall into.

Imagine that the culture of a company as a huge collection of pendulums. Each swings very slowly from one extreme position to another. Each pathway is distinct from the other. Only a subset can be seen clearly at any given time.

What do the pendulums represent?

Each pendulum describes a particular dimension of awareness.

For example, some companies are market-driven while others are driven by innovation. Neither position is absolutely better, but it IS possible for a company to get stuck in one extreme or the other without knowing it.
Some of the other extremes include :

• ethnically monolithic vs. diverse
• revenue vs. expense driven
• centralized vs. decentralized
• diversification of products vs. consolidation
• faster processes vs. quality processes
• incentive pay vs. base pay
• individual vs. group measurements
• reengineering vs. process improvement
• job security vs. talent turnover
• focus on strengths vs. focus on weaknesses
• strategy vs. tactics
• vision vs. execution

In his book, Gerstner mentions that the quote most attributed to him is the one in which he said "The last thing IBM needs right now is a vision."

Basically, he was saying that the company had gone too far in the direction of visioning, and that, for the time being, it needed to swing the pendulum back to the more practical matters of doing business on a day to day basis.

It is the job of every CEO (and every manager) to swing pendulums.

However, based on experience and training, no 2 managers are the same - they "see" different pendulums. There is, after all, some truth to the notion that if you give a man a hammer, he is likely to see every problem as a collection of nails.

A manager will always attempt to solve a business problem by looking at the pendulums that he can see most clearly. Indeed, he must.

It is also the job of CEOs to point out, and distinguish new pendulums for the executives and employees in a company, so that they can see what he/she sees. Without this ability, a CEO is stuck trying to change a company on their own, and are unlikely to be successful.

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Ultimate Consulting

I recently read a book whose protagonist was what I might call the ultimate consultant.

Her role was essentially to perform a single act, which was to say Yes or No.

Essentially, she would look at a design of something like a logo, and decide in a split second whether or not it would work, according to her intuitive understanding or marketplace trends. Written into her contract was the fact that she would give no explanations, no advice and no further comment on the matter.

For this she was flown around the world, and paid very well, which was testimony to her instinctive and unique ability.

She is the ultimate consultant in my eyes, providing maximum value in the few seconds it took her to do what she did. At the same time, the many hours that she spent studying fashion trends around the world were done at her own expense, which hopefully is something that her clients understood!

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JobSmart: The Young and the Restless

This is my most recent article in the Online Jamaica Gleaner.

I thought this title was better than the one I came up with, whatever that was!

http://www.go-jamaica.com/jobsmart/view_article_details.php?id=113

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An Opposable Mind

Reading an article today reminds me of why I love new ideas.

Usually, it’s not because the notion is absolutely foreign to me. Instead, the best feeling is when I am able to recognize some piece of thinking I have already done, taken to an entirely new level by someone obviously much smarter than I am.

In the July 2007 Harvard Business Review, an article entitled “How Successful Leaders Think” stopped me in my tracks. I realized upon reading it that the author had articulated for the first time in my understanding the way I try to think, when I do my very best thinking, or designing.

Roger Martin, the author, starts by quoting F. Scott Fitzgerald, who said that “the ability to hold two opposing ideas in the mind at the same time and still retain the ability to function” is the sign of a truly intelligent individual.

His modern day research of successful corporate leaders backs this up.

He compares the importance of this kind of intelligence with the evolution of the opposable thumb. Human beings have the most developed opposable thumbs in the animal kingdom, and have been able to create magnificently simply because of their ability to maintain a sustained and precise tension between the fingers. Without it, there would be no ability to write, build, paint and use tools.

This mechanical tension is likened to a certain mental tension – the ability to hold competing ideas in mind at the same time, without discarding one or the other prematurely. In other words, an “opposable mind,” according to Martin.

With an opposable mind all sorts of magic can be created, and the good news that he delivers at the end of the article is that it can be learned, grown and deepened through practice, just like any other skill.

We are born with this kind of mind, he says, but often become anxious because we prefer simplicity and clarity to ambiguity and complexity. This leads us to develop simplistic answers, and to cling to them as if they were gospel truth.

My grandfather did not believe that man really landed on the moon. It was just simpler to believe that it was all a hoax.

Many believe that the earth was created in 7 days, that Eve ate an apple in a garden, that Noah built a boat that saved all creatures from a flood and that Jonah was literally swallowed by a whale which somehow happened to be a fish.

Over time, mankind has progressed in many ways, but not without a fight.

Our tendency is to seek the right answer and discard the wrong – quickly and permanently. Education systems that encourage this kind of thinking even into the college years don’t help the situation.

Martin notes that what he calls “integrative thinkers” welcome complexity, and are therefore able to see the entire problem at once, without trying to break it into small pieces. They also question cause-and-effect relationships that are over-simplified e.g. “if we pay people more money then they will be more productive.”

He gives the example of Red Hat, the software manufacturer, whose CEO was able to abandon the conventional thinking of his industry to create a new revenue model for itself, allowing it to stay ahead of its competitors.

If there is one thing that I aspire to bring to my clients, it is solutions that are based on opposable thinking. At the times when we have been able to achieve these kinds of breakthroughs, it truly has been a collaborative effort that pulls the best from their direct experience, and a fresh look at their issues that I sometimes bring.

While it’s not the easiest path to take, it usually is the most fruitful.

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The Difference an Engaged Employee Makes

In a recent Trinidad Newsday article, a colleague of mine, Kwame Charles, makes the following observations:

Research findings:

The SHRM article highlights several research findings on employee engagement that demonstrate its link to competitiveness. Some of these findings are as follows:

• Highly engaged employees perform 20% better than disengaged employees and are 87% less likely to leave their organisation.
• Engaged employees work harder, are more loyal and are more likely to “go the extra mile” than disengagement employees.
• Engaged employees have been found to be five times less likely to have a safety incident and seven times less likely to have a lost-time accident than disengaged employees. In one study, the average cost of a safety accident for engaged employees was US$63, while the average cost for disengaged employees was US$392. This company was able to save over a million US dollars by increasing employee engagement.

Interesting, especially given my estimate that some 60-80% of Caribbean employees are disengaged.

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Gone Fishing

For the first time in a very long time, I will be away from the internet for 9 days.

Be back after that!

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Steve Jobs Speech at Stanford

I write a lot about doing what one loves to do.

I am fortunate to say that I wake up each morning being able to say this, and apparently so does Steve Jobs:

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Re-establishing Trust Requires an Apology

I found this great post in a blog from an Australian company that seems to be Framework's lost twin.

It speaks to the need to restore trust by apologizing, an action that I implicitly reiterated in my post about cleaning up a company's promisphere.

Click here to be taken to the blog.

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The 60-80% that are Resigned

I want to make a crazy estimate.

I am guessing that some 60-80% of Jamaicans are in jobs that they dislike.

I have no idea if this is a true estimate, but I think it might just be in the ball-park.

The reasons?

• An impossible education system that forced decisions at 16 about which 3-4 courses to take at CAPE/A' levels.
• The narrow range of options available at UWI.
• The way jobs are structured
• Our moribund economy
• The lack of information about opportunities

They all combine to create a mindset of scarcity in which a job becomes something to hold onto at all costs. People get stuck in careers and in positions for which they are ill-suited, by virtue of their lack of motivation or skill.

The effect on a company's productivity is cumulatively disastrous, as is the effect on our economy.

I'd be interested in hearing what other opinions are on this topic, and what might be done about it.

I'm not sure how this fits in with books such as Michael Carter's "Why Workers Won't Work," except to say that I think he was focused on studying rank and file workers.

(A copy of Framework's 2-page summary of the book can be obtained by sending email to fwc-whyworkers@aweber.com or by visiting our website under the Ideas section.)

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Why Aren't They Working on My Strategy?

This Framework white paper from 2004 illustrates the reason why employees in Caribbean companies find themselves so divorced from the strategic thinking that occupies most executives' time.

To obtain a copy, send email to fwc-whystrategy@aweber.com.

For a full list of our white papers, visit our website www.fwconsulting.com, under the item: Ideas.

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JobSmart Series: Staying in Touch

This week's edition of the Jamaica Gleaner's JobSmart series: Staying in Touch.

Written by me.

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Shaping the Space -- part 8

An intervention is intended to target is what we call the "space" or environment that a group of participants happens to be in.

This space is not a physical space, however.

It is more of a mental/social/emotional space that exists around the individuals. It is more clear when they are physically together, but it exists even when they are apart.

Before an intervention starts, a team or group of participants is operating inside of a particular space, most of which they are generating sub-consciously.

The overall intervention is meant to shift the space not once but several times in the course of a meeting, event or interaction of some kind.

The end-result is defined by the Outcome - described in an earlier post.

Defining the intervention is a matter of figuring out the actions that will shift the space from the starting point, through several intermediate states, until the final Outcome is achieved.

For example, the most common space that all groups of Caribbean people start in when they don't know each other is a space of "Who are you, and who are they, and do you know who I am?"

Once this question is addressed, the most common subsequent space is "Why are we here?"

This is often followed by "What role will I play?" which in turn leads into "What is the agenda and the time requirement?"

Once these are squared away, along with any other logistics, the next space is "What is the first step?"

At this point, the actions vary according to the Outcome wanted from the intervention.

P.S. I did a search for prior posts in this blog on the topic, and found one that I wrote on my wedding day 2 years ago. In that post I wrote about how my wife and I used an Outcome-based approach to design our wedding day.

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The Outcomes of an Intervention -- part 7

(This article is the 7th in a free-wheeling series of ideas around Interventions as practiced by Framework Consulting. Click here to browse the series.)

Once the need for an intervention has been established, the first and perhaps most important step is to design what we call the Outcome.

This activity follow the principle of what Stephen Covey calls "Beginning with the End in Mind."

In other words, when the intervention is complete what will the end result of all it look like and feel like? What frame of mind will the participants be in? What will they have experienced? What emotions will they be feeling? What will they have learned?

The purpose of an intervention is to cause a shift, or a change in the environment surrounding a group of people. It usually includes a critical call to action to make progress in some new direction.

An easy intervention might be one that involves creating a new set of goals for a well-functioning team.

A more difficult one might be to spur a team to resolve a problem that seems insurmountable, and the team-members have been avoiding.

But they all start with a stated Outcome.

An example, in the case of the easy intervention, might include the following lines:
"The goals created tap into every single member's commitments"

In the case of the more difficult one it might be:
"The conversation is open and free, and allows all the upsets of the past to be addressed."

Usually a full Outcome runs 3-5 sentences, addressing different aspects of the final result.

These Outcomes are the bedrock of the design, as they are used to inform the different actions that are taken at different points. This includes what is said, what is done, what information is shared, what exercises are done -- everything down to how the facilitators are dressed is tailored to produce the outcome intended.

It operates as the guiding light for the entire exercise.

Defining the Outcomes takes a certain degree of rigorous thinking, as design team members share their views on what is usually a complex situation with no clear cut definitions.

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Coke Prices

I recently heard that a US$500 kilo of cocaine in Colombia can be sold for US$10,000 in Jamaica.

By the time it gets to the US, it fetches a price of US$30,000.

If it reaches the UK safely, that goes up to $35,000.

Given these prices, and our location right between Colombia and Miami, it does seem as if we have a problem of geographic proportions.

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This flies in the face of Caribbean Practice

The following excerpt was used as the basis for an article to be published in next week's issue of JobSmart: follow the link www.go-jamaica.com/jobsmart.

To add a comment on the JobSmart article, click on the link below this article saying "0,1,2... comments."

From an article in HBR, August 2003, by Larry Summers, ex-President of Harvard University:

"But what is most special about the American research university is that it is a place where the authority of ideas, rather than the idea of authority, reigns supreme. At Harvard, we consider it an extremely important accomplishment when a 25-year old graduate student who has been here a mere 18 months makes a discovery that disproves the pet theory of a 55-year old professor who has been here 30 years. Indeed, the professor whose theory has been disproved might be the first to congratulate that graduate student."

Hmm... food for thought, as this applies so far and wide in Caribbean societies -- in business, academia, the church and elsewhere.

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Study on Workplace Engagement

I found this study astounding, although not altogether surprising.

It was published in the 2003 HBR in an article entitled Fair Process: Managing in the Knowledge Economy, by authors Kim and Mauborgne.

Their central finding is that employees will commit to a manager's decision -- even one they disagree with -- if they believe that the process the manager used to make the decision was fair.

In other words, employees care as much about the process used to derive the outcome, as they do about the actual outcome themselves. This says much about how Caribbean managers need to manage, in order to gain the buy-in that is needed to change behaviour and produce a positive culture.

For example, in the case of the Jamaican workforce, the book Why Workers Won't Work as well as our project report from the Trinidadian Executive in Jamaica both describe the importance of respect in the local workplace. (A summary of the book can be downloaded by sending email to fwc-whyworkers@aweber.com, and the Trinidad report can be downloaded by sending email to fwc-triniexec@aweber.com.)

In coming to decisions in the Jamaican workplace, it is critical that managers go the extra mile to demonstrate a certain kind of respect for the workers. The following paragraph from the HBR article seems to fit in perfectly:

"Fair process responds to basic human needs. All of us, whatever our role in a company, want to be valued as human beings and not as "personnel" or "human assets." We want others to respect our intelligence. We want our ideas to be taken seriously. And we want to understand the rationale behind specific decisions. People are sensitive to the signals conveyed through a company's decision-making processes. Such processes can reveal a company's willingness to trust people and seek their ideas - or they can signal the opposite."

The authors mention 3 basic principles of fair process:

• Engagement -- involving individuals in the decisions that affect them by asking their input and allowing them to refute the merits of one another's ideas and assumptions
• Explanation -- everyone understands why final decisions are made as they are. All inputs were considered impartially in the interests of the company. This helps people accept the decision even if it runs counter to their own opinion.
• Expectation clarity -- once a decision is made, managers state clearly the new rules of the game. What are the news standards, and how are people to be judged?

The authors also make the case for 2 psychological kinds of justice, distributive and procedural (which I will simply refer to as Model A and Model b.)

In Model A, the idea is that when people get what they deserve (compensation or promotion) they feel satisfied with that outcome. They will reciprocate by fulfilling their obligations to the company to the letter.

In Model B, trust and commitment are built, which produce voluntary cooperation, which in turn drives performance, leading people to go beyond the call of duty by sharing their knowledge and applying their creativity.

I remember a funny story told to me by a good friend of mine over 15 years ago, that illustrates the difference between the two (thank you Tom B.)

---

Some kids used to pass by an old man's house that had a zinc roof on the way from school each day. It was the kind that made a very loud sound when it rained.

One day, they decided to pelt his roof just to hear the sound it made, and sure enough it was loud like gunshots!

The old man, who had a reputation for being crotchety, ran out, and shouted at them and waved his stick, looking quite upset. The kids ran away laughing.

The following day, they told their friends, and even more of them showed up to stone the old man's roof, hear the loud sounds it made, wait for him to come out, watch him wave his stick and have a good laugh.

On the third day, even more showed up, and the same thing happened, except that the following morning, the old man woke up with an idea.

Once again, the kids showed up, but this time he was there waiting outside. He called them over, and told them that he would pay each of they $1 to pelt stones on his roof that day.

They cried with glee- was was not only crotchety, he was also insane!

They pelted, he paid up and they ran off happily.

The following day, they showed up again, and this time he apologized, as he only had a quarter for each of them. They pelted his roof, and took their money and ran.

The next day they came, he again apologized and said that no he had only pennies to give.

They refused -- he couldn't expect them to pelt stones on his roof for that little money! So they left in a huff, never to return.

---

In summary, the old man was able to manipulate the kids into adopting Model A, when they had in fact started out by using Model B. Once they moved to Model A, he could take control of their desires.

So it goes for many employees, who respond to their managers using Model A because their managers are using it themselves.

The authors presented the following summary in the form of a chart:

Model A

• Tools: resource allocation economic incentives, organizational structure
• Attitude: Outcome satisfaction "I got what I deserved"
• Behaviour: Compulsory cooperation "I'll do what I'm told, or else"
• Performance: Meets expectations

Model B

• Tools: Fair Process (engagement, explanation, expectation clarity)
• Attitude: Trust and commitment "I feel my opinion counts
• Behaviour: Voluntary cooperation "I'll go beyond the call of duty"
• Performance: Exceed expectations (self initiated)

The authors make the point that fair process is rare in companies. When managers are asked for evidence that they are fair, they point to equitable treatment, authority and freedom given, resources provided and rewards earned.

The authors say that these answers confuse fair outcomes/results with fair process.

Most managers are loathe to get too much into engagement, explanation and expectation clarity for reasons that I find particularly pertinent to managers in the region.

The first reason has to do with power. Some keep the rules for success and failure vague as a way to keep control. Others use memos, speeches and purely one way communication to keep away direct challenges. For these managers, fair process is a threat to their authority.

The second reason comes from an unconscious belief that people will only care about what's best for themselves in the very narrow, short- term sense. However, the research shows that people will go along with decisions they disagree with, and might impact them negatively as long as they perceive the process to be fair.

In other words, they can understand that short-term sacrifices are sometimes needed to advance long-term interests -- if they trust the process.

N.B. The authors note that fair process is not the same as consensus, compromise or democracy.

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The Put-Down: A Guy Thing

I read the following excerpt of an article on humor from the 2003 Harvard Business Review that I find interesting.

"Female executives in this research consistently used more humor than their male counterparts, but men used more put-down humor. Women were more likely than men to use complimentary humor or humor that otherwise expressed caring, warmth, and support; they used significantly less humor that put down subordinates and marginally less that put down superiors.

Researchers have shown that in interpersonal relations, men tend to assert rather than downplay status differences, while women do the opposite.

Although people of both sexes use humor largely to build bridges, some organizational psychologists believe that for men, put-down humor may also be a way to establish and maintain hierarchical status.

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Following the Lines of Trust

What is the most effective way to hire an executive in a different Caribbean country?

Is it a matter of finding the right newspaper to place the best advertisement in?

Or does it have something to do with finding the best online employment job board to use?

I have found myself giving a different kind of advice to different companies across the region.

The reason why an advertisement might work in-country is that there already exists a certain amount of trust between the reader and the company. The company that tries the same approach, however, will easily run into problems when they apply it to a different country.

What should be done?

My hypothesis is that Caribbean professionals change jobs when they believe they can trust the company, board and the executives that are doing the hiring. I think that there is a threshold of trust that must exist for a top executive to change jobs, and the better the executive, the higher the threshold.

The two exceptions are not attractive ones. A desperate executive might take an job that looks half-decent. A greedy one may take be willing to work for anyone who bids the highest.

(This is where Jamaica may be very different from Trinidad and Barbados, both now and in the foreseeable future. Both Barbados and Trinidad are virtually at full employment, and there is no shortage of executive opportunities given the barriers to entry that exist for professionals. Jamaica's economy remains in the doldrums, yet it remains a relatively easy country to gain entry to work.)

I have been advising clients and colleagues who are engaging in job searches to conduct the search through warm channels, using people that they already know, and friends of friends. In other words, follow the lines of trust.

These lines of trust run through each of our countries, and in the smaller countries, they play an even more important role.

Perhaps hiring the right executive is all about following the lines of trust until they reach the right person.

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