Jun 5, 2020 | Governance, Leadership
Observing the virulent spread of ‘The Bug’ and the institutional responses from around the world, there is a disturbing commonality that points at a deficiency in political and ethical leadership, until the horses are running free, and the stable almost empty.
In this country, at least we have been consistent.
Consistent in denying there was anything to worry about until the crisis is upon us.
Since the 90’s there have been strident calls by scientists that we need to get off our collective arses and address the emerging human causes of climate change.
Ignored, until people die in fires, and then slowly, edged towards the backburner.
Similarly, the clusterf**k that has been the management of the Murray Darling basin, although people may not have died, water has been ‘allocated’ under dubious circumstances, natural flows disrupted, investment distorted, and money made on the ‘QT’.
Now we have the Bug, and people are dying as it spreads, and particularly in the US, the systems are now seen as having been gutted, and are grossly inadequate to manage the crisis. That crisis is now escalating beyond anything foreseen to racial violence, unleashing forces from what now appears to be a cultural pressure cooker with devastating results.
In commercial life, the situation is the same. BP engineers knew that the Deepwater Horizon rig was a bomb waiting to go off, Boeing engineers knew there were problems with the 737Max’s software, executives in Australia’s banks and insurance companies were ripping off the estates of dead people, and enabling payments to the makers of child porn, and that ‘oldies’ were dying of neglect in aged care facilities.
There is a pattern to this political and corporate selective blindness that should deeply disturb us all.
The problem is known, when it is called to the attention of senior management it is seen as ‘inconvenient,’ so it is ignored and buried in favour of short term profit. Those doing the questioning are shut down, fired, or intimidated into silence. The problem persists in the dark corners until a crisis occurs, followed by hand wringing, press releases, provision of a sacrificial head for public consumption, and promises to do better.
The only antidote is what Ray Dalio calls radical transparency.
Shine lights in all the dark corners, create a culture where those lights are not selective or optional, but core ingredients of the culture.
Jun 3, 2020 | Change, Leadership
Have you seriously considered the implications of the apparent recognition that remote working can, and will, be a greater part of the employment mix in a post corona world?
There is a loud noise that ‘everything will change’ reverberating, an echo chamber of that view amplified by digital tools. It seems to me that human beings are simply insufficiently flexible to change ‘everything,’ although it seems the trend towards remote work has been accelerated a decade by the bug.
I have worked remotely and in offices, mixed about in a pretty random fashion for 25 years. The recent past has brought into focus some of the factors that I think are worth consideration.
‘Industrial’ management, the norm for the last 100 years, made in the image of Frederick Winslow Taylor assumes that in the absence of close supervision, little work of value will be done. At the extreme other end of the scale, you have enterprises like ‘Automattic’ the parent company of WordPress, that has remote workers around the world, and no head office of any type beyond the current location of Matt Mullenweg, the CEO and co-founder. It is a continuum on which we all fall somewhere, and it is evolving quickly.
The change in management style to remote will be for some, too much, as it adds several dimensions to the task that many managers are simply not up to doing.
Managing remotely adds a number of challenging dimensions:
Tools are needed that are not familiar or easily learnt by many, so simplicity is key. In addition there is a host of newer challenges to be addressed relating to the provision of the tools from software to the hardware, and the security questions hanging over everything digital.
Behavioural norms established in an office environment have been thrown out the window. Suddenly, we need to consider things like the interruptions of children, the family dog, and flexible working hours. In particular, the move to being available at all hours which was evolving as a result of the digital connectivity we had while still working from an office, has been supercharged. Suddenly, working 24/7 risks becoming the norm, unrestrained by reasonable office hours. All of these, and many others indicate that a very different way of measuring performance will be required.
‘Meetings’ from the casual gathering around the coffee machine in the morning, to the established and regular formal meetings deliver a rhythm to the day that is suddenly absent, and needs to be replaced somehow. The formal meetings can be done using one of the many tools, but the casual, unplanned meetings that happen in an office, that can be hugely valuable, present a different challenge.
Culture. The glue that holds the workplace together, will undergo radical surgery. Human beings evolved in small groups that looked after themselves by looking after each other. While this has eroded somewhat over the last 250 years, the need to be ‘together’ is nevertheless hardwired into our collective DNA. I suspect this will be the largest hurdle for management of the remote corporations to address.
Recognise the ‘God Syndrome’ and kill it. I cannot help but wonder if the challenge of leading remote teams is no more than a light being shone on existing failures of leadership that went largely unnoticed. Those in senior positions do not have all the answers, often they have very few of them. Unfortunately, those in leadership positions are often there partly as a result of being able to convince others they are right more than anyone else, and they play ‘the game’ more effectively. The reality is that they are usually as confused and uncertain as the rest of us, they just hide it better, and sometimes ask better questions. The tide has gone out, so the rocks are exposed, the failures of leadership are more obvious. Humility is the common characteristic of every really good leader I have seen.
Deliver Psychological Safety. Everything I see and read about the psychology of human beings is that we seek ‘psychological safety’. This is the place where we feel safe to do and say things that really reflect what we think, without fear of any sort of retribution. Achieving this in any workplace is really hard, and is the result only of truly great leadership. Achieving it when many of us are working remotely, away for the ‘safety’ of those few we know well and truly trust, will be a monumental task.
When you strip it all away, the reason workers are congregated in offices is to achieve the objective of making money for their employers. It is however an artifice forced on us by the industrial revolution, and is somewhat inconsistent with the way we humans evolved. The recent past has demonstrated that this congregation may not be necessary to achieve that commercial objective. Almost certainly it is not necessary in the form that it evolved, as a means to find a way to manage operational scale. Therefore, a rational management will set about reducing costs, and expensive CBD office space has suddenly become a soft target.
Cartoon header courtesy Scott Adams and Dilbert.
Jun 1, 2020 | Leadership, Strategy
As it seems we are slowly going to come awake after the close-down, it is timely to consider the steps we need to take to ensure that we survive the revival. Over 45 years of working with all sorts of businesses, in all sorts of situations, there are a number of common lessons that may be useful for you to consider.
Lesson 1. Cash availability.
You need cash to rebuild. During the downturn in activity, hopefully you have ruthlessly husbanded your cash, sold unnecessary assets, reduced inventory, reduced your cash conversion time, and cut out the ‘fat’ that accumulates when times are not so tough. Having cash on hand offers you the agility to be opportunistic.
The best way to preserve cash is to stop doing the things that lose it.
Generating cash by increasing debt can be attractive at a time of low interest rates, but debt driven cash also works against you if the plans you have do not work out as expected. Leverage works both ways.
Lesson 2. Have a plan.
This is generic advice, but you must have a plan. In the absence of a plan that is the framework for the allocation of limited resources, you will end up chasing your tail. In summary, you actually need several ‘nested’ plans that cover the key activities, each level driven by the others, but contributing to the achievement of the overall objective.
- Strategic plan: identifies the key overall objectives for the enterprise, defining broadly which markets, customers, technologies, geographies and channels that will be the priority.
- Revenue generation plan: identifies in more detail where and how the revenue will be generated, and the resources necessary to achieve the revenue.
- Financial plan: Projects the detail of the costs and returns generated by the activity. Usually these will be expressed as an annual budget, but given the uncertainty of the future, I strongly favour a rolling three month financial plan that acts as a go/no go trigger to other activity. This provides management information on an ongoing basis that enables the people in the organisation to learn, and make better decisions as a result.
- Operational plan. For manufacturing enterprises, planning your operations is essential, as they can be significant consumers of cash. Managing inventory and the optimisation of process flows through a factory will be an ongoing challenge. Operational planning is also essential in service enterprises, but is less obvious, as the key operating assets walk in and out of the building every day, or at least they used to, now they may just log on and off.
- People plan. An enterprise cannot function without people, they are the glue that holds everything together. Therefore deep consideration of the people and capabilities they bring, and that you can help them develop, is essential to success. For SME’s, finding and keeping good people is a significant challenge, and a huge cost burden when mistakes are made. As general Eisenhower observed: ‘Plans never work, but planning is essential’
Lesson 3. Ensure everyone is aware of the ‘Money in Vs Money out’ equation. Every individual in an enterprise has some level of control over this money in/out equation. Often it will be just the recognition of the cost of their labour compared to the value of the output they generate. The greater the awareness of the equation in an enterprise, the greater the chance that cost savings that do not impact on revenue will be identified and acted upon. While you cannot save your way to prosperity, every person in an enterprise should be focussed meaningfully on the equation, and optimising the expenditure of the key resources: money and time.
Lesson 4. Continuous improvement. Every profitable enterprise is a collection of processes that deliver, in some way, value to a customer. The profitability challenge is to do so at a rate less than the cost to the enterprise to supply it. Simple. However, collections of processes inevitably generate waste in many forms, which when removed, save time and money, while maintaining enterprise margins. Every tiny improvement that can be made, should be, as improvement become cumulative, and over time delivers huge benefits.
Lesson 5. The inmates must run the asylum. The traditional model is top down by decree, but this no longer works well enough to be sustainably competitive. Part of the planning should be aimed at building the ‘engagement’ of every stakeholder at every level. We know enough about human psychology these days to know that crucial to this engagement is giving control of every individuals workspace to them, and manage by outcomes rather than by activity. The corona bug has accelerated the trend to remote working, the ultimate expression of this upending of the typical management pyramid, by a decade. The huge management challenge is to articulate the limitations of every individuals decision-making power, and for most businesses to completely throw away their existing personnel assessment processes. KPI systems are almost always based on activity, and need to be replaced with KPI’s based on outcomes linked to the overall strategy. This will be very hard for some large organisations where those that make these decisions to change owe their current position to being able to game the existing system. As a result, many will be reluctant, or indeed unable, to change themselves or the system.
It is easy to sit back and write a post such as this, based on 45 years of experience, but it is way, way harder to implement. It will take focus and determination, and some very tough choices to succeed. When you need some assistance, call me.
Header photo credit: Notre Dame rebuild. Diane Worland via Flikr.
May 27, 2020 | Change, Leadership
Social capital
Like all new things, remote work was a small outlier in the world of corporations. It was something that a few dabbled with, mostly with specialist consultants and those for whom they had statutory responsibility, such as maternity leave.
That has now all changed, as the experiment at the edges has been forced to become mainstream in the face of the Corona crisis, and the world will not return to the previous status quo as the crisis dissolves.
Not only do many workers like remote work, as a relief from the daily commute, it has put a focus on the potential of substantial savings in expensive office space, and the opportunity to extend employment to areas where there exists a pool of available labour.
The change is a radical one, not one that would have happened inside a decade without the impetus of the Corona bug, but how do we make it work?
The critical ingredient will be Social Capital.
Are Social Capital and Trust synonyms?
Perhaps. However, to my mind, Trust is something that you give to individuals, and to the extent that those individuals are representatives of an institution, there is ‘rub-off’. Social Capital to me is an idea that encompasses the resilience of the culture in an organisation as well as personal trust given to individuals, and so is a much broader definition.
Pre-Corona, social capital was a function of the daily contact with co-workers of all levels in the corridor, around the water cooler, in meetings, all face to face. It was the glue that held everything together. It is the product of ‘culture’ forged by a combination of genuine leadership, and the instinctive behaviour of individuals, and groups of individuals.
Social capital is like any other form of capital. It needs to be built, strengthened, and renewed, or it dissipates as it is used. Face to face contact is the primary mechanism for this process, and in its absence, any store of social capital will be quickly used up unless alternatives are developed and leveraged.
Those who just manage by exerting the institutional power vested in their position in the pecking order will be emasculated. They never built any social capital, often did not see the need or have the ability. Others, the real leaders amongst a group, and they are not necessarily those with the slot in the pecking order, built social capital by their behaviour and attitude towards others.
The former group will hate this remote working thing, as their ability to direct is significantly diminished. They will fight the implementation. Meanwhile, the leaders amongst us will be less impacted, and will welcome the change as it makes the life of their co-workers, to differing degrees easier, while making theirs very different, and probably harder.
You will see the leaders amongst us very quickly, they will be the ones figuring out how best to replace the drivers of social capital pre-corona with new drivers in a post-corona world, and they will be shouting from the rooftops. The others will be in the long line of those swept aside by this tsunami of change.
May 22, 2020 | Governance, Leadership
Leadership lessons from the greatest marketers in history
I do not go to church, do not believe in the god of the Bible, Koran, or any other narrative that offers a solution to the failures of our humanity.
I have however, been in awe of their collective and individual capacity for marketing.
Let’s just take the three Abrahamic religions, Christianity, Islam, and Jew. They are old, old, have persisted, evolved, and successfully transitioned through the ages to remain a major point of faith for hundreds of millions of loyalists.
Great marketing, tapping into the emotional drivers of our behaviour.
In all three, the 10 commandments are central.
The Islamic form is a little different to the Christian and Jewish, but the sentiments about what constitutes a ‘good’ life line up almost exactly.
If god was all powerful, all consuming, why would he/she (to be politically correct) restrict the delivery of rules to just those 10? Why not go further, and ensure we did not stuff up the environment, or congregate in dirty cities, or give us the rules for building a house, and a million other things?
Instead, we got a framework within which to make our own decisions, a set of guidelines about what constituted acceptable behaviour in a civilised community. Within the boundaries of the guidelines, we could behave as we wished to deliver the outcome of a ‘good life’, one that contributed to those around us, as well as to ourselves.
Sounds a bit like a successful strategic framework, does it not?
Less is more.
Lead.
May 20, 2020 | Change, Leadership
