Posts Tagged ‘Independence’

Dissent Without Reprisal – a key to company longevity

all in jestIn strategic planning there’s a strong forcing function that causes the organization to converge on a singular, company-wide approach.  While this convergence can be helpful, when it’s force is absolute it stifles new ideas.  The result is an operating plan that incrementally improves on last year’s work at the expense of work that creates new businesses, sells to new customers and guards against the dark forces of disruptive competition.  In times of change convergence must be tempered to yield a bit of diversity in the approach.  But for diversity to make it into the strategic plan, dissent must be an integral (and accepted) part of the planning process.  And to inject meaningful diversity the dissenting voice must be as load as the voice of convergence.

It’s relatively easy for an organization to come to consensus on an idea that has little uncertainty and marginal upside.  But there can be no consensus, but on an idea with a high degree of uncertainty even if the upside is monumental.  If there’s a choice between minimizing uncertainty and creating something altogether new, the strategic process is fundamentally flawed because the planning group will always minimize uncertainty.  Organizationally we are set up to deliver certainty, to make our metrics and meet our timelines.  We have an organizational aversion to uncertainty, and, therefore, our organizational genetics demand we say no to ideas that create new business models, new markets and new customers.  What’s missing is the organizational forcing function to counterbalance our aversion to uncertainty with a healthy grasping of it.  If the company is to survive over the next 20 years, uncertainty must be injected into our organizational DNA. Organizationally, companies must be restructured to eliminate the choice between work that improves existing products/services and work that creates altogether new markets, customers, products and services.

When Congress or the President wants to push their agenda in a way that is not in the best long term interest of the country, no one within the party wants to be the dissenting voice. Even if the dissenting voice is right and Congress and the President are wrong, the political (career) implications of dissent within the party are too severe.  And, organizationally, that’s why there’s a third branch of government that’s separate from the other two.  More specifically, that’s why Justices of the Supreme Court are appointed for life.  With lifetime appointments their dissenting voice can stand toe-to-toe with the voice of presidential and congressional convergence.  Somehow, for long-term survival, companies must find a way to emulate that separation of power and protect the work with high uncertainty just as the Justices protect the law.

The best way I know to protect work with high uncertainty is to create separate organizations with separate strategic plans, operating plans and budgets.  In that way, it’s never a decision between incremental improvement and discontinuous improvement.  The decision becomes two separate decisions for two separate teams: Of the candidate projects for incremental improvement, which will be part of team A’s plan? And, of the candidate projects for discontinuous improvement, which will become part of team B’s plan?

But this doesn’t solve the whole challenge because at the highest organizational level, the level that sits above Team A and B, the organizational mechanism for dissent is missing. At this highest level there must be healthy dissent by the board of directors.  Meaningful dissent requires deep understanding of the company’s market position, competitive landscape, organizational capability and capacity, the leading technology within the industry (the level, completeness and maturity), the leading technologies in adjacent industries and technologies that transcend industries (i.e., digital).  But the trouble is board members cannot spend the time needed to create deep understanding required to formulate meaningful dissent.  Yes, organizationally the board of directors can dissent without reprisal, but they don’t know the business well enough to dissent in the most meaningful way.

In medieval times the jester was an important player in the organization.  He entertained the court but he also played the role of the dissenter.  Organizationally, because the king and queen expected the jester to demonstrate his sharp wit, he could poke fun at them when their ideas didn’t hang together.  He could facilitate dissent with a humorous play on a deadly serious topic.  It was delicate work, as one step too far and the jester was no more.  To strike the right balance the jester developed deep knowledge of the king, queen and major players in the court.  And he had to know how to recognize when it was time to dissent and when it was time to keep his mouth shut.  The jester had the confidence of the court, knew the history and could see invisible political forces at play.  The jester had the organizational responsibility to dissent and the deep knowledge to do it in a meaningful way.

Companies don’t need a jester, but they do need a T-shaped person with broad experience, deep knowledge and the organizational status to dissent without reprisal.  Maybe this is a full time board member or a hired gun that works for the board (or CEO?), but either way they are incentivized to dissent in a meaningful way.

I don’t know what to call this new role, but I do know it’s an important one.

Image credit – Will Montague

Innovation as Revolution

Revolutionary war reenactmentWhether you’re a country, company, organization, or team, revolution is your mortal enemy.  And that’s why the systems of established organization are designed to prevent impending revolutions and squish those that grow legs. And that’s why revolutions are few and far between. (This is bad news for revolutionary innovation and radical change.)

With regard to revolutions, it’s easiest to describe the state of affairs for countries.  Countries don’t want revolutions because they bring a change in leadership.  After a revolution, the parties in power are no longer in power.  And that’s why there are no revolutions spawned by those in power.  For those in power it’s steady as she goes.

Revolutions are all about control.  The people in control of a country want to preserve the power structure and the revolutionaries want to dismantle it.  (Needless to say, country leaders and revolutionaries don’t consider each other good dinner company.)  And when the control of a country is at stake, revolutions often result in violence and death.  With countries, revolution is a dangerous game.

With regard to revolutions, companies are supposed to be different from countries.  Companies are supposed to reinvent themselves to grow; they’re supposed to do radical innovation and obsolete their best products; and they’re supposed to abandon the old thinking of their success and create revolutionary business models.  As it turns out, with regard to revolutions, companies have much more in common countries than they’re supposed to.

Like with a country, the company’s leadership party is threatened by revolution.  But the words are a bit different – where a country calls it revolution, a company calls it innovation.  And there’s another important difference.  Where the president of a country is supposed to prevent and squelch revolutions, the president of a company is supposed to foster and finance revolutionary innovation.  The president of a country has an easier time of it because everyone in the party is aligned to block it.  But, the president of the company wants to bring to life the much needed revolutionary innovation but the powerful parties of the org chart want to block it because it diminishes their power.  And it’s even trickier because to finance the disruptive innovation, the company president must funnel profits generated by the dominant party to a ragtag band of revolutionaries.

Where revolutionaries that overthrow a country must use guerilla tactics and shoot generals off their horses, corporate revolutionaries must also mock convention.  No VPs are shot, but corporate innovators must purposefully violate irrelevant “best practices” and disregard wasteful rigor that slows the campaign.  And, again, the circumstances are more difficult for the company president.  Where the country president doesn’t have to come up with the war chest to finance the revolutionaries overthrowing the country, the company president must allocate company profits for a state-funded revolution.

Just as revolutions threaten the power structure of countries, innovation threatens the power structure of companies.  But where countries desperately want to stifle revolutions, companies should desperately want to enable them.  And just as the rules of engagement for a revolution are different than government as usual, the rules of engagement for revolutionary innovation are different than profitability as usual.  With revolution and innovation, it’s all about change.

Revolutions require belief – belief the status quo won’t cut it and belief there’s a better way.  Innovation is no different.  Revolutions require a band of zealots willing to risk everything and a benefactor willing to break with tradition and finance the shenanigans.  And innovation is no different.

Image credit — Lee Wright

Organized For Uncertainty

dog snapper schoolThere are many different organizational structures, each with its unique set of strengths and weaknesses. The top-down organization has its strong alignment and limited flexibility while the bottom-up has its empowering consensus and sloth-like pace.  Which one’s better?  Well, it depends.

The function-based organization has strong subject matter expertise and weak cross-function coordination, while the business unit-based organization knows its product, market and customers but has difficulty working east-west across product families and customer segments.  Is one better than the other?  Same answer- it depends.

The matrix organization has the best of both worlds – business unit and functional – and isn’t particularly good at either.  And there’s the ambidextrous organization that I don’t pretend to understand.  If I had to choose one, which would I choose? It depends.

The best organizational structure depends on what you’re trying to do, depends on the environmental context, depends on the organization’s history and biases and the general state of organizational capability, capacity and profitability.  But that’s not the whole picture because none of this is static.  All of this changes over time and it changes in an unpredictable way.  Because the best organizational structure depends on all these complicating factors and the factors change over time, there is never a “best” organizational structure.

Constant change has always been the dominant fundamental perturbing and disturbing our organizational structures.  But, as competition turns up the wick and the pace of learning builds geometrically, change’s ability to influence our organizational structures has grown from disturbing to dismantling.

Change is the dominant fundamental, but its real power comes from the uncertainty it brings to the party.  Our tired, old organizational structures were designed to survive in a long-dead era of glacial change and rationed uncertainty.  And though our organizational structures were built in granite, the elevated sea levels of uncertainty are creating fissures in our inflexible organizational structures and profitability is leaking from all levels

If uncertainty is the disease, adaptability is the antidote.  The organization must continually monitor its environment for changes.  And when it senses an emerging shift, the organization it must move resources in a way that satisfies the new reality.  The organization structure shifts to fit the work.  The structure changes as the character of the projects change.  The organizational structure never reaches equilibrium; it survives through continual evolutionary loop of sense-change-sense.

I don’t have a name for an organization like this, and I think it’s best not to name it.  Instead, I think it’s best to describe how it behaves.  It’s a living organization that behaves like a living organism.  It wants to survive, so it changes itself based on changes in its environment.  It’s an organization that self organizes.

Directionally, organizational structures should be less static and more dynamic, and they should evolve to fit the work.  The difficult part is how to define the explicit rules on how it should change, when it should change and how it decides.  But it’s more than difficult to describe explicit rules, it’s impossible.  In domains of high levels of uncertainty there can be no predictability and without predictability a finite set of explicit rules will not work.  The DNA of this living organization is implicit knowledge, evolutionary experimentation and personal judgement.

I’m not sure what to call this type of organizational structure, and I’m not exactly sure how to create one. But it sure sounds like a lot of fun.

Image credit — actor212

Gifts Are For The Giver

giveI’ve read emails from engineering students telling me I whipped them into a fervor over engineering.

I’ve received notes from engineering leaders that, based on a single line of a post, reinvented the cost signature of their products.

I’ve been sent messages from folks who were stuck in a rut, and after reading my post, were able to work through their self-imposed constraints.

My inbox has let me know a reader, after thinking about my thinking, tried something that truly scared them.

They all thanked me for what I gave them, but, really, I want to thank them for what they gave me.

They listened; they thought; they changed their behavior.  There can be no bigger gift.

I know not everyone celebrates my holiday, but, nonetheless, I want to share it with you.

Merry Christmas, and thanks for your gifts.

On Independence

young and oldWhen I think of independence:

I know I can speak my mind, but must remember others have the same right.

I know how lucky I am, but must keep in mind others are not.

I think of my wonderful rights, but steep in the huge obligation that comes with them.

I sometimes forget I have first world problems, and know I cannot truly comprehend third world problems.

I know I didn’t have to sacrifice anything, but others willingly sacrificed everything.

I must remember that I have it good, and I have an obligation to give back.

I must remember that my independent thought isn’t necessarily right, it’s just independent.

I want to keep in front of me we’re all immigrants, we just differ in when we arrived.

I must remember that independence is fueled by diversity, and our differences must be respected and validated.

I know my kids take for their independence for granted, but so do I.

On Independence

Independence for a country is about choice. A country wants to be able to make choices to better itself, to control its own destiny. A country wants to feel like it has freedom to do what it thinks is right. Hopefully, a country thinks it’s a good to provide for its citizens in a long term sense. We can disagree what is best, but a good country makes an explicit choice about what it think is right and takes responsibility for its choices. For a country, the choices should be grounded in the long term.

Independence for a company is about choice. Like a country, a company wants control over its own destiny. A company wants to feel like it has freedom to do what’s right. A company wants to decide what’s right and wants the ability to act accordingly. There are lots of management theories on what’s right, but the company wants to be able to choose. Like it or not, the company will be accountable for its choices, as measured by stock price or profit.

And with children, independence is about choice. Children, too, want control over their own destiny, but they score low on the responsibility scale. And that’s why children earn responsibility over time – get a little, don’t get hurt, and get a little more. They don’t know what’s good for them, but don’t let that get in the way of wanting control over their own destiny. That’s why parents exist.

Independence is about the ability to choose. But there’s a catch. With independence comes responsibility – responsibility for the choice. With children, there’s insufficient responsibility because they just don’t care. And with employees in a company, there’s insufficient responsibility for another reason – fear of failure. I’m not sure about countries.

Independence is a two way street – choice and responsibility. And independence is bound by constraints. (There are unalienable rights, but unconstrained independence isn’t one of them.) For more independence, push hard on constraints; for more independence, take responsibility; for more independence, make more choices (and own the consequences).

Happy Independence Day.

Mike Shipulski Mike Shipulski
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