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My new article on the value of being connected to the core business of organization has been published by Techrepublic.com
Here is how it starts:
“There is a reality TV show called Undercover Boss, where a senior executive of a large company takes a position at the bottom of the corporate pyramid. The executive discovers daily operations at the level of detail unknown in the executive suites. Epiphanies abound.
While the show is highly staged and predictable, and its entertainment value is questionable, few viewers are surprised that senior management knows so little about their core business. How do they run the company? Shouldn’t executive decisions be based on the knowledge of operations?
The distance between the executive suites and the front lines is often of galactic proportions. Because customers are found at the front lines (if you want to order a meatball sandwich or open a savings account, you don’t call head office), being light years away from the front line translates into being light year away from the customer.
The way I see it, the demand for management consulting services is not likely to go away any time soon.”
Nine out of ten business cases that cross my desk contain material errors, which often lead to incorrect recommendations worth tens of millions of dollars. If you ever wondered why two thirds of change initiatives fail, here’s your answer: many of them are based on a fallacy, a case that does not exist.
The issues run the gamut from poor understanding of objectives to complete disregard for the established methods of economic analysis, from strategic ignorance to financial ignorance.
Decisions on outsourcing and insourcing are also not immune from this flawed approach. In fact, many of them are deficient for one specific reason which I will outline here.
Later this year, I am conducting a webinar on the art of dispute as a part of the Excellence in Leadership series. If you have ever been in a situation where you knew that your opponent was wrong but couldn’t effectively argue his point of view, you know why this is a highly valuable skill. This morning, I was jotting down some most salient points for this session and thought that I should share one with you today.
We make decisions on a daily basis, many times a day: how to get to Memphis, what to have for dinner, what to wear, which espresso maker to buy and so on. Similarly in a business settings, people make operating and investment decisions: which project to select, how to enter a new market, who to hire, and so on. Why doing so, in life and in business, decisions are influenced by recommenders – friends, family, experts, employees, superiors, vendors, consultants, and others.
Although not a debate per se, a recommendation is similar to it in that the other party offers an argument to support their point of view. A decision maker listens to recommendations and makes a decision.
Here is my point. Never ever accept a recommendation or an argument that you don’t understand.
I see a lot of people in a lot of organizations all charged with making decisions. It’s a commonplace occurence that they make decisions to the tune of millions of dollars based on recommendations they don’t understand: a financial workup, results of a marketing survey, sales projections, etc. It only so happens that the financial workup contains errors, the methodology behind the marketing survey is flawed and the sales projections are based on best case scenario assumptions.
The resulting decision cannot possibly be sound. The result: wasted resources, lost time, overlooked opportunities.
I think the following is in order when listening to what recommenders have to say:
- if you don’t understand something, ask for an explanation. It is not a weakness but a sign of a confident decision maker
- probe and examine the recommender’s data and assumptions carefully
- understand the recommender’s interests. What do they stand to gain from your following their recommendation? Does it influence their recommendation?
- in cases where you are not in a position to validate an argument (e.g. a financial cost-benefit analysis), ask an authority on the subject to do it for you.
- never let yourself to be forced into the thinking that there is only one alternative to be considered
- think critically and ask critical questions.
In my observation, accepting the argument that is not well understood is even more of a problem in a group setting, such as a meeting. There is an implicit pressure to agree and no one want to look ignorant by asking for an explanation. (Since everyone else is quiet, they MUST understand it. I don’t want to look stupid, so I will pretend that I do too.)
Don’t let this to happen to you. Ask questions, make the right decisions, and thrive!
This is a repost from the same day a year ago. All of these still apply.
1. It is best not to share the project plan with the project team as it leads to unnecessary and usually incredibly stupid questions.
2. Mandate that team members submit task duration estimates as precisely as possible: two decimal digits (e.g. 17.36 days) are usually sufficient but some projects may require three digits.
3. Strive to disperse project team over multiple locations: it greatly reduces the time people waste mindlessly chattering with each other.
4. In this economy, everyone ought to be able to work harder. Schedule tasks based on 10-hour days.
5. Involve the Steering Committee in day-to-day running of the project. They will tell you how much they like it.
6. When briefing the Steering Committee, it’s a good idea to declare all nearly completed tasks as completed. Ninety per cent is awfully close to 100 per cent and the Committee Members will feel encouraged.
7. Try to surprise your Project Sponsor every now and then. Rescheduling the implementation date, firing half of the team or changing the vendor half-way through should all be considered.
8. Status updates clutter mailboxes, so avoid them.
9. Get rid of those team members who disagree with you. You are in charge of a critical project and the last thing you want around is some worm questioning your decisions.
10. Don’t waste any time trying to understand the business domain. It is unimportant and is not your job.
11. A list of typical project risks can be easily obtained on the Internet. Don’t waste precious time developing it; this is merely a formality.
12. Act professionally: don’t engage in unrelated conversations with your staff and certainly avoid socializing with them. It is important to maintain a distance.
13. Information Technology is an exact, predictable field. If your programmers cannot write code without any defects, replace them.
14. To speed up negotiations with vendors, just sign their canned contracts.
15. Details are unimportant; the job of the project manager is the overall supervision.
16. Once the scope of the project is determined, ensure that it is impossible to change it.
17. A lot of people may claim to be project stakeholders. Feel free to ignore those you don’t like.
18. Encourage team members to decide for themselves what their tasks should be.
19. The best way to gauge the skill of a fellow project manager is to ask them about the largest project budget they’ve ever been responsible for.
20. Plan to release the project team on the day of implementation, to save money.
21. (Bonus) Forget that it’s April Fools’ Day and start typing an angry letter to the Editor. Remember that it’s April Fools’ Day when you’re on the third page of it!
The Winter Olympic Games of 2010 are over. The last few days were dramatic for the host nation, Canada. The flurry of gold medals, the unfortunate silver in women’s curling (Cheryl Bernard was a breath away from the gold), and, of course, the amazing win in the hockey final against the USA… what a performance!
In four years, the best athletes of the world will reconvene in Sochi, Russia, to compete, to win, to rejoice, to, alas, lose, and to persevere.
Speaking of Russia, it finished 11th in the medal tally, an unusually low placement. The heads of sport apparatchiks are starting to roll: President Medvedev has publically called for those in charge of the national team to “make the courageous decision and hand in their notice,” lest “we will help them.” World class performance and leadership is seen as a high strategic priority there, and far be it from me to judge whether this is right or wrong.
There is a point in my talking about the Games and the Russians, so read on.
Let’s look at this holistically. Here is what we have going for Russia:
- World class performance in sports is a strategic priority.
- Performance in Vancouver was subpar.
- Host of the next Winter Games; it would be embarrassing to do poorly
- The poor performance has been attributed by many experts to the gradual disappearance of the “Soviet school.” As older coaches retire with no one hand over to, training methods become lost.
- The funding is not an issue as inordinate amounts of money is invested in amateur sports. Consider, for instance, the size of the bonus the Russian Olympic Committee had established, compared to other countries.
The assessment of experts is that while there is a significant amount of investment, there is no systematic approach to it.
What does it remind you of? Isn’t it something we see so often in the corporate world: former glory, riding the wave of the past accomplishments for as long as it can carry you, then recognizing that there is a problem and throwing money at without any system, in a piecemeal fashion?
This won’t do, not for a corporation, nor for a country aspiring to be a world leader in sports. The right place to start is to establish the objective clearly. I will continue with the Russian example to illustrate that.
Ostensibly, there are two possible distinct goals here for Russia:
- To do well in Sochi in 2014; and
- To become a world leader in winter sports.
Why are these goals separate? The first one is specific and has a well-defined timeline. It is a short term goal akin to making an annual projection or delivering a new product on time. Once it is achieved, there isn’t necessarily a lot of residual value left.
It can be achieved by assembling a star “project team” of subject matter experts to find the talent, put it through the state-of-the-art prep program and selection, whittle the team down to the desired size and do incredibly well in Sochi. Once done, you will have a bunch of great athletes, a bucketful of medals and perhaps a few lessons learned, but I no lasting effect. There won’t be a methodology, a succession of coaches, a sustainable selection “funnel”.
The second goal is long-term. To become a leader in something (sports, innovation, design, service, growth, efficiency, productivity, etc) you need to build a “school” to replace the vanishing legacy. You need to create a system, which, in this case, should consist of:
- Judicial, systematic investment within well established guidelines.
- Sponsorship at the top level, to maintain focus and momentum.
- Right people – exceptional coaches, scientists, athletes, technical support, and administration
- The system of incentives to reward the desired behavior,
- The culture of amateur sport participation – just look at Australia – to allow the talent to realize and to grow the pool of potential star athletes
- Facilities to enable this participation with low cost of entry
- Heuristics and methods (which should with time become self-correcting algorithms) of identifying and selecting talent, preparation and training, nutrition, and so on.
- Knowledge retention and amelioration.
This will take time, perhaps 8-10 years to see the results, but these will be long-lasting, repeatable, sustainable results. Perhaps, Russia should pursue both objectives at the same time, with the full understanding of the expectations attendant to each goal.
This example is a terrific illustration to a common issue in the corporate world. Too often, organizations are so anxious to see a change that they embark on it in earnest without first establishing their goals clearly and determining the best way to address them. These issues pop up all over the organizational map: investments that generate now ROI, failure to define a clear strategic direction, misguided projects, fixing things that don’t need fixing, lost time, lost productivity, “feel good” initiatives that have no value… If only the decision makers took the time to think it through.
Are the Russians coming? I don’t know, but they better get their act together if they want to be a force to be reckoned with.
This short video is a great illustration on how IT departments often communicate with other functions within their organizations. Same language, same office, same coffee… yet a world apart…
I am happy to announce collaboration with a media outlet dedicated to outsourcing, in particular nearshoring. My articles will appear every couple of months.
In the first article I share my thoughts on three strategic errors in decision making on outsourcing. Read on…
My article named among the top three blogs of 2009 by Techrepublic: http://bit.ly/8ClV0l
Dan Pink discusses motivation and refers to some of Dan Ariely’s surprising results.
Frederick Herzberg and David McClelland have done a significant amount of work in this area and if motivation is of interest to you, I suggest reading about their work. Herzberg’s hygiene theory, in particular, is absolutely solid
What Pink describes supports my own findings. For a practitioner, the gap between the scientific findings and the regular management practices are both apparent. The lack of volition among the vast majority of managers to change their practices is disconcerting. I am posting this to inspire enough people to reflect on their work and find their way to new exciting heights.