First things first.

I've been helping a large outdoor goods company with its strategy development. The CEO has been struggling to move the process forward for a few months now, and he turned to me for outside perspective. It became quickly apparent that his difficulty was not with the process per se. The difficulty was rooted in the lack of a clear direction: what does his company represent, and where does it want to go in the next 5-10 years? You can't develop a strategy until you can answer those questions.

I'm personally fond of the approach Jim Collins described in Built to Last. He suggests that you first clarify your core values and purpose, and a "big, hairy, audacious goal" that will take you 10-30 years to reach. (Read more about it in this HBR article, and download this helpful worksheet from his website.) Now, not many companies are ready to commit to a 10-30 year goal, but there's no reason you can't modify it by setting a 5-10 year goal.

I haven't consulted to them, but my guess is that both Nike and Patagonia have absolute clarity in these areas, and as a result they're able to set -- and change -- their strategies as needed to attain their goals. Their strategies are documents designed to help them create their envisioned future. As for what particular tool or process they use to develop the strategies? Who cares. There are a host of approaches out there, any one of which will do an adequate job. And since strategy is flexible -- It has to be, since external conditions change so frequently -- it doesn't really matter which you use. The critical part is defining who you are and where you want to go.

Following a strategy without first having a core ideology and a clearly defined goal is like following a compass without a magnetic needle pointing north. You'll certainly move, but you have no idea where you'll go.

Respect for People -- Salary Edition

Salaries are an often-overlooked aspect of respect for people. We all know that money alone doesn’t make employees happy, nor does it make a lousy job or a lousy work environment rewarding. Money is considered a hygiene factor. But salaries are nevertheless important, and it’s high domestic wages that are usually blamed for the need to ship jobs overseas. However, Sophie Quinton on the Atlantic Cities website tells the story of several retail companies that are not only thriving in the US with its high salaries, they’re thriving while paying front line employees significantly more than minimum wage.

The average American cashier makes $20,230 a year, which in a single-earner household would leave a family of four living under the poverty line. But if he works the cash registers at QuikTrip, it’s an entirely different story. The convenience store and gas station chain offers entry-level employees an annual salary of around $40,000, plus benefits. Those high wages didn’t stop QuikTrip from prospering in a hostile economic climate. While other low-cost retailers spent the recession laying off staff and shuttering stores, QuikTrip expanded to its current 645 locations across 11 states.

Zaynep Ton of MIT’s Sloan School of Management points out that retailers such as QuikTrip, CostCo, and Trader Joe’s don’t view employees as a cost to be minimized:

They start with the mentality of seeing employees as assets to be maximized," she says. As a result, their stores boast better operational efficiency and customer service, and those result in better sales. QuikTrip sales per labor hour are two-thirds higher than the average convenience store chain, Ton found, and sales per square foot are over fifty percent higher.

These companies make trade-offs to compensate for their higher personnel expenses. Trader Joe's streamlines operations by limiting its product selection and seldom puts items on sale. Costco feels only slightly more luxurious than a warehouse, with products stacked on pallets. But (in my opinion, at least) consumers get a higher quality of service from friendlier, better-trained people than they do at, say, Wal-Mart.

Even if you’re not in retail – and especially if you’re not in discount retail – these companies provide a valuable lesson. Paying people a decent salary is an important form of respect. If you want to get the most out of these assets, it makes sense to show respect through decent pay.

I’ve been in many high-end sporting goods companies that don’t invest in front line staff – particularly customer service or warranty. These jobs are typically low paid, and people in these roles are often not well-integrated into the company: they’re seldom included at the start of the product development cycle, and their opinions generally aren’t solicited during the creation of marketing campaigns. Not surprisingly, turnover in these departments is high. And that’s a real loss to the companies, because these are the people with the most contact with customers.

Better wages (and better integration into the product and marketing functions) will yield surprising benefits. If it works at QuikTrip, imagine what it could do for you.

Why all those shiny products may not really be helping you at all.

  SKU over-proliferation is one of my pet peeves since I was in charge of the product marketing for running shoes at Asics. (See my March 2013 newsletter for a longer exegesis on the epidemic of product line obesity.)

Apparently, I'm not alone on this bandwagon. Andy Mooney, the new CEO of Quiksilver, just announced that Quiksilver Women’s and Quiksilver Girl’s lines were cannibalizing sales of Roxy apparel and taking space away from men’s wear in its stores. As a result, both Quiksilver and Roxy are exiting the skate business and DC (another sub-brand) has exited surf. As Mooney says,

Having fewer, better products is better for the brand than having more, average products.

This is a decision that smart -- and lean -- companies are always willing to make. I've written before about the way that Jim Collins uses his "stop doing list," and many people have reported about the slash and burn approach Steve Jobs took to the Apple product line upon his return to the company. As Matt May reports, Jobs was always proudest of the thousands of things Apple said no to.

When people think of Lean, they often think about the drive to eliminate waste from processes and systems. It's important to remember that waste can creep into your products and services, too.

The Ikea effect, and putting the power in consumers' hands.

Ed Schmults, the CEO of Wild Things, is putting power in consumers' hands. He's aggressively pursuing a mass customization model that allows consumers to design their own apparel using several base models. It's similar to Nike ID shoes: consumers can choose fabrics, colors, zippers, pocket location, etc. in order to make the item that they desire. What's really intriguing about this initiative is the prospect for reducing the waste in the design, development, and production of products that are doomed to fail.

When I worked at Asics, I invested an enormous amount of time and energy on the redesign of our best-selling running shoe, the Gel 100-series. I wanted something fresh and different from anything we had done in the past, and I decided to use jelly rubber, rather than the traditional synthetic leather, stripes on the quarter panels. I was convinced that the shoe looked great, and that retailers and consumers would reward us for our new design.

Oops. Sales actually dropped 40% -- about $4 million. Consumers hated the new design. I single-handedly destroyed the pillar of our running line, because I was so emotionally invested in the idea.

The Ikea Effect describes how people like and value things in which they've invested their own effort. As researcher Daniel Mochon explains it,

Imagine that, you know, you built a table. Maybe it came out a little bit crooked. Probably your wife or your neighbor would see it for what it is, you know? A shoddy piece of workmanship. But to you that table might seem really great, because you're the one who created it. It's the fruit of your labor. And that is really the idea behind the Ikea Effect.

This is precisely what happened to me, and to countless other companies every year. Employees at every level of an organization get attached to the things they create -- plans, policies, products -- and are unable to see the weaknesses in them. In the case of product development and marketing, this can be a particularly expensive problem.

Ed Schmults says this about relinquishing control of design to the masses:

People say consumers can't design a good jacket, but the quality is ensured by the brand. Who are you to say what is ugly?

I think he's right. And I'd go one step further: allowing consumers to design their products is not only a part of the future of commerce, it can help immunize you and your business from the dangers of the Ikea Effect.

Respect for people -- Marissa Mayer edition

Good god -- the blogosphere and the press is full of judgments on Marissa Meyer's decision to end telecommuting at Yahoo. Depending on who you read, she's either a savvy executive making the tough choices necessary to rescue the sinking Yahoo ship, or she's an industrial era luddite clinging to an old work paradigm who, not incidentally, has betrayed women. Of course, none of these armchair quarterbacks (as near as I can tell) actually work at Yahoo. None of them know what the real situation is, either in the head office or in the home offices of the telecommuters. Without actually spending time at Yahoo, passing judgment on her decision violates the "go and see" principle of lean.

I have my own opinions about her decision, but in the absence of observable fact, my opinions are based on preconceptions, personal biases, and assumptions. It would be both foolish to judge her decision without knowing what's really going on.

Before we condemn Mayer's new policy as showing a lack of respect for her employees, we should show *her* some respect by going to the gemba and seeing first-hand what's happening at Yahoo. Until then, we have no right to opine on her new policy.

Really, Hertz?

Seth Godin (and others) have written eloquently on the concept of "permission marketing." As Seth writes,

Permission marketing is the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them.

To me, the converse (or is it the obverse?) of permission marketing is the ability to retract that permission. Easily. The SafeUnsubscribe feature of most email marketing services guarantees that ability, and makes it painless and risk-free to sign up for newsletters that you're not 100% sure about.

And then there's Hertz.

Hertz started spamming me recently with promotions I don't want.  For no comprehensible reason, they've decided to make it difficult to unsubscribe from their mailing list. When I tried to unsubscribe, the link sent me to this page:

As a #1 Club member -- one of their most valuable customers -- they're forcing me to take SEVEN (7!) steps (which I've circled in red) to unsubscribe from their mailings: entering my email twice, clicking three checkboxes, and even entering my #1 Club member number. Really? They can't associate my member number with my email address? They need me to specify THREE times that I don't want their emails?

This is not permission marketing. This is "hassle marketing" -- as in, it's too much of a hassle to opt-out of your marketing, so I'll just delete the messages. Wrong.

Whatever your product or service, do you make it easy for people to *stop* doing business with you? To me, that's the unspoken flip side of permission marketing. You have to respect people's desires not to talk to you, and make it easy for them to move on.

The last thing your customer or prospect wants to deal with is a company acting like you're their first boyfriend or girlfriend, unwilling to let go and pestering you while you start dating someone else.

A 20% cut shouldn't be Armageddon

Leon Panetta notified Congress that, as a result of the sequester, most of 800,000 Department of Defense civilian employees will see their work weeks shortened by 20 percent from late April through September. Predictably, his announcement was met with dire warnings about an irrevocable loss of military readiness and catastrophic vulnerability to military and terrorist threats from around the world. I don't know nearly enough about the cuts or about how the military uses its money (except for the egregious excesses like the Littoral Combat Ship or the F-22 Joint Strike Fighter), but I do know that the 20% reduction in civilian employee work hours shouldn't really be that big of a deal. Mind you, I'm not minimizing the effect on the workers' pocketbooks, just the effect on the military.

In contrast to the sackcloth-and-ashes mood relating to these cuts, consider Jason Fried, the founder of 37signals. As I wrote before. Jason's company operates on a 4-day workweek for half the year -- not just for work-life balance, but for improved productivity:

From May through October, we switch to a four-day workweek. And not 40 hours crammed into four days, but 32 hours comfortably fit into four days. We don’t work the same amount of time, we work less….The benefits of a six-month schedule with three-day weekends are obvious. But there’s one surprising effect of the changed schedule: better work gets done in four days than in five. When there’s less time to work, you waste less time. When you have a compressed workweek, you tend to focus on what’s important. Constraining time encourages quality time.

Delivering more with less. That's a lean lesson the Pentagon -- and probably your company -- could learn from.

Look downstream before crossing.

The flight attendant on United Airlines got my name wrong three times yesterday. She checked her passenger list when she asked for my food order, but the list was no longer laid out like a seating chart. It used to be that way -- the passenger names were organized into a grid that corresponded to the seat arrangement in the cabin -- but a recent change in the IT system changed the layout. And now the flight attendants struggled to match the names with the people in the seats.

This wasn't a big deal to the passengers, but it was clearly frustrating and a little embarrassing for the flight attendants. They wanted to provide high-quality, personal service (yes, I know, hard to believe, but at least on the United PS Service between JFK and SFO this is true), but they kept calling people by the wrong name.

Presumably, someone in the IT department made a change to the way that passenger names were printed on the manifest for a reason. However, without talking to the downstream customer -- the flight attendants -- the change created all kinds of waste.

The complexity of organizations and IT systems means that changes in one area usually have ripple effects farther down the value stream. If you don't talk to your internal customers before you make the changes, you're likely to create problems that undermine larger corporate goals (in this case, providing high service levels).

Obviously, I don't know what went into this change, but it seems as though the IT folks didn't look downstream before crossing.

Intelligent design or evolution?

How good are your business processes and operations? I'm willing to guess that there's room -- a lot of room -- for improvement. Organizations are not the product of intelligent design. There was no master plan from the outset, when your company was just two engineers and a dog in your parent's basement, for how to structure the product development or the credit approval process. Those processes evolved naturally over time, sometimes smoothly, sometimes in a lurching, Frankensteinian mode. ("Quick, we need to hire an HR person to handle benefits and write a hiring policy!")

Regardless, I'd bet that if you could start from scratch, you wouldn't buy the same database software, or set up the purchasing department, in quite the same way that it exists now. The current structures and processes are simply artifacts, rather than perfectly designed tools for your company.

Take a look at your processes and ask some of these questions:

• How many handoffs are there within each process?
• How visible are the key performance indicators -- cost, quality, delivery, and safety -- to each person working in the department?
• Does each process have a clear owner?
• How much and how often do people have to rework the information that they receive from their upstream colleagues?
• How often and how long do people (or customers) have to wait for information?
• How many different ways are there of doing a job (i.e., do you have standard work for each function)?

This is not a comprehensive list of questions by any means, but they will get you started in assessing how well your company is running. You'll get a better idea whether you're succeeding because of yourself, or in spite of yourself.

Here's why productivity tools waste your time.

Yesterday's WSJ article, "How Productivity Tools Can Waste Your Time" highlights an uncomfortable fact: the infinitely expanding universe of systems, apps, books, and gizmos doesn't seem to be making people more productive.

An explosion in technology aimed at helping people manage their time and tasks may actually be making it harder.

New productivity products "have skyrocketed in the last couple of years. There is way too much out there to make sense of it all," says Whitson Gordon of Los Angeles, editor in chief of Lifehacker, a website on using technology to be more productive.

Speaking as a guy who has published his own time management book last year (A Factory of One), I can say with confidence -- and some degree of knowledge -- that most people love my ideas, but they struggle to actually implement them. As a result, they wallow in the same quagmire of email overload, metastasizing to-do lists, and behind-schedule projects as those who haven't read my book.

The failure of most people to implement classic time management ideas begs for a root cause analysis. I see two causes. First, there's the failure of self-discipline. As the WSJ article puts it,

Improving your productivity isn't about searching for a better app or finding the right software. "Ultimately it comes down to managing yourself."

If people struggle to diet, or exercise, or quit smoking, why should it be any easier for them to shed their lousy time management habits? The self-discipline required is formidable -- and most people, frankly, don't have it.

Second, and perhaps more important, is our work environment. You can try to establish new, more productive behaviors, but the ugly truth is that you'll get steamrolled by the bureaucratic inertia of your organization. Let's say that you vow, in Julie Morgenstern's words, to "never check email in the morning." (Pretty much every productivity coach recommends that.) Sounds great. But that resolution will last only until your boss chews you out for missing a critical email that she sent at 8:15am. The same holds true for running better meetings, for throwing out old/obsolete files, etc. If your work environment punishes you for productive behavior, you'll go back to the old ways of working.

So, before you download new apps or buy new books, consider whether or not you're disciplined enough to actually implement the ideas, and figure out how to get your company (or at least your boss) to change expectations.

Obsess on the customer, not the competition.

I love this quote from a recent Tom Friedman column:

“When you obsess about the customer, you end up defeating your competition as a byproduct. When you are just obsessed about the competition, you end up killing yourself as a byproduct — because you are not focused on the customer.”

- K.R. Sridhar, founder, Bloom Energy

Lean is often described as an approach to eliminate waste. While that's certainly true, many in the lean community get riled up by this simplification, pointing out that "respect for people" is a fundamental element of lean. Others point to the essential qualities of just-in-time, or standardized work, or something else. (Check out all the iterations of the Toyota Way here.)

But I think we do lean a disservice if we forget that the ultimate goal is to deliver products and services to customers at the lowest possible price -- and in so doing, we render our position impregnable.

Don't use training to fix performance problems.

Leave it to Google to bring a robust, problem-solving mindset to HR. In a recent NYTimes interview, Karen May, Google's VP for people development dismisses the reflexive approach to training that so many companies have:

Don’t use training to fix performance problems. If you’ve got a performance problem, there is a process to go through to figure out what’s causing it. Maybe the person doesn’t have the knowledge or skill or capability. Or is it motivation, or something about relationships within the work environment? Or lack of clarity about expectations? Training is the right solution only if the person doesn’t have the capability. But what I have seen in other places is sort of a knee-jerk reaction by managers to put someone in a training class if somebody isn’t performing well.

Having spent more than my fair share of time delivering training classes on time management, I can say with confidence that she's on the money. More often than I like to admit, my training classes were failures, if you measure success by sustained behavioral change. The failure wasn't due to quality of my teaching skills or the content. (At least, I don't think so!) Rather, it was due to root causes that were beyond my ability, or the ability of the participants, to fix.

As I've written before, time management problems are really just manifestations of dysfunction in one or more of the following areas: strategy; priorities; internal systems and processes; corporate cultural expectations; or individual skills. Training addresses the last area only -- but usually, the time management problem has its root cause in one of the other areas.

Remember: the performance problem you're seeing is more than likely just a symptom. And just as you'd look for root causes of defects in a manufacturing or administrative, process, you should look for root causes of "defects" in human performance. After all, your organization, and the people within it, are infinitely more complex than the products or services you provide. It only makes sense that any performance problems require at least a similarly probing analysis, rather than the simplistic fix of training.

Don't let this happen to you.

Get this: the website for online grocer FreshDirect went down for two day last month. Software problems? Cyber attacks? Data center fire? No, no, and no. FreshDirect forgot to renew their domain name registration. As the Wall Street Journal reported,

Despite being notified by Network Solutions that the domain name was expiring as early as November, the company failed to renew its domain name in time, said a person familiar with the matter.

This outage wasn't catastrophic -- they didn't go down right before Christmas or the Super  Bowl -- but it's embarrassing, and surely cost them something.

Many retailers use some sort of auto-renew feature for their web domains, but even a simple calendar reminder would have been enough to prevent this problem.

FreshDirect's goof is a perfect example of why you want to replace your cognitive systems with reflexive systems. A cognitive system requires thought and deliberation for a specific action to occur. A reflexive system is something automatic -- no thought is required for the action to occur, and therefore it's less likely to fail. (I've written about this concept before. Download the article here.)

Take a walk through your organization. Which decisions processes are driven by cognitive systems, and which are driven by reflexive systems? The more that you can switch from the former to the latter, the more robust your performance will be.

And you'll be less likely to run out of nachos on Super Bowl Sunday.

VAT taxes, tribal knowledge, and clarity

Passing through Frankfurt Airport, you'll notice dozens of travelers lining up at the VAT tax refund window clutching credit card receipts and official forms. They talk for a moment to the two staffers, look confused and frustrated, and then shuffle resignedly down a dingy corridor to an even dingier office about 50 yards away. They pull out their receipts and forms again so they can get an official stamp from a customs agent. Then they haul their bags back to the original VAT refund window. This is how you're supposed to get your tax refund at the airport: first you go to the customs office for some sort of official stamp, and then you go to the VAT refund window. The process confuses everyone -- not because it's complex, but because it's opaque.

Given that no one gets it right, you'd think that there'd be some guidance for the uninitiated. Travelers don't enjoy dragging their luggage back and forth through the airport and waiting on line at the tax refund window twice. Presumably the people in the VAT refund office don't enjoy telling passengers over and over and over again that they have to go to the customs office first. By my count, this system produces at least four of Ohno's seven wastes: transportation, motion, waiting, and defects.

All of which got me thinking: how transparent are your processes? Sure, you've got voicemail trees help your customers navigate to the right department, but what about your employees? Do they know how to do all the tasks that are expected of them? Or do they rely upon tribal knowledge -- undocumented techniques, tricks, and procedures to get their jobs done? How much waste does that create?

I'm working with a company that is taking this problem seriously. According to their own customer service staff, it takes about 6-9 months to become fully facile with the various databases they need to use. Think about that: nine months until they're fully able to address all their customers' needs, even with the standard user's manual new employees get. So now the customer service team holds semi-monthly meetings to share, teach, and document the hidden shortcuts and techniques that the experienced people use when they do their work. They're creating a robust body of knowledge that captures their tribal knowledge and institutionalizes it -- and they're shortening the time it takes to get up to speed.

My guess is that you're probably in a similar situation -- and not just with your software. You likely have myriad processes that have undocumented workarounds, shortcuts, and tricks. Navigating those processes is as difficult for your people as navigating the VAT tax refund process is for travelers. And that creates an enormous amount of waste.

The Outstanding Organization, a new book by my colleague Karen Martin, extolls the value of clarity for a company. Clarity has many dimensions (clarity of purpose, clarity of values, clarity of thinking, etc.), but one of the most important is clarity of process. (Check out her webinar on this topic.) When employees don't know how things operate, it's impossible for them to perform efficiently.

Next time you're walking around your company, ask some people how much of what they know is in their heads, and how much is actually documented. If there's a discrepancy, you can be sure that at least some of the time your team looks like the folks at the Frankfurt VAT tax refund office. And that's not a pretty sight.

Why reorganizations (almost always) fail

Reebok cut its sales forecast by 33% earlier this year. That means good news for the company that prints its business cards -- there will be a lot of job title changes. When sales forecasts decline, the typical corporate response is to lay off some people and reorganize. To that end, Matt O'Toole, Reebok's chief marketing officer, announced that

Earlier this year we announced the reorganization of the Reebok Brand team into six core Business Units (Training, Running, Walking, Studio, Classics, and Kids), designed to deliver against our ambition to become the leading fitness brand. Today, we continued this reorganization with the implementation of a new global-direct operating model between the global organization in Canton and our markets, and streamlining our satellite creation activities. These changes, which will go into effect January, 2013, will increase our effectiveness, our speed to market and our efficiency.

Now, I'm not exactly sure what "streamlining satellite creation activities" means. But I do know that reorganizing a brand team -- or any team, for that matter -- seldom results in a big increase in sales.

I've been involved in numerous reorganizations myself, and never once did they affect our sales. We moved desks, we got new business cards and job descriptions, we had different people in our meetings, but the product didn't change. And I predict that's exactly what will happen with Reebok.

Reorganization is a typical corporate knee-jerk reaction to a problem that's poorly understood. If you approach the problem of falling sales from an A3 mindset -- really trying to understand the nature and root causes of the problem, and to design a suite of countermeasures -- you'd see that that changing people's seats has about as much chance of improving the situation as changing the Weather Channel has of improving your actual weather. Why? Because consumers don't give a damn how you're organized internally. They buy products that meet their needs and wants, regardless of who works in what department or what their title is. And I can guarantee you that the product isn't going to change just because Classics is now a "core Business unit." The countermeasure doesn't tie back to the root cause of the problem.

Moreover, you may not even have the right people and necessary skills to staff the new organization. In one company that I worked for years ago, we split our product marketing team into business units to increase focus and sales in each category -- but we didn't have enough people to completely staff each business unit. The result? After a few months, we ended up doing pretty much the same work as before, and within 18 months, we reorganized again right back to where we started.

Let's also not forget the destruction of relationships, experience, and tribal knowledge that helps expedite decision-making and improve productivity. Reorganizations bulldoze those accumulated assets into oblivion, ensuring that for six months at least, the company will be operating much less effectively.

Reorganizations that work best don't just reshuffle the boxes on an org chart. They're strategically designed to take cost out of a process, or bring products to market faster, or expedite decision-making. Most of all, they're precisely targeted to address the root cause of the problem.

Otherwise, the only company that will see a sales increase is the one printing the business cards.

2012 Management Improvement Blog Carnival

I’m very proud to say that John Hunter kindly gave me the reins (for one day, at least) for the Curious Cat 2012 Management Improvement Blog Carnival Annual Roundup. This is my third year to contribute to the Carnival, and it’s a not only a chance to share some of my favorite posts, but to revisit and reflect upon their lessons for myself.

What I’ve tried to do this year is select posts that gave me a new perspective about the world around me, and how improvements could be made to the current state.

First up is Kevin Meyer’s Evolving Excellence blog. I love this blog because of the range of topics Kevin and Bill Waddell cover, and because of their strongly voiced opinions. Nothing politically correct here, and perhaps for that reason, powerful lessons about improvement, value, and excellence.

Just Observing, Sir: Kevin has a real talent for unearthing lessons just about anywhere he goes. In this post, Kevin notices that at the Four Seasons Hotel there is always someone watching the customers. Always. Their uncanny habit of appearing the moment you need something is no accident, nor is it magic. Excellent service, it turns out, comes from discipline and standardized work.

Kevin and Bill both penned more than a few pieces on Apple and its reliance on outsourced Chinese labor. This piece, Apple Is Not a Manufacturer, does the best job of explaining that Apple’s vaunted product design does not make it a model manufacturing company—or a model company, for that matter.

In The Difference Between Leading and Wonking, Bill takes on the politicians (shocking!) and makes powerfully makes the following point: that the best road map and the maximum buy-in comes from letting people closer to the ground work out the details. As he says, “So long as the path they come up with effectively moves the group in the right direction there is little to be gained and quite a lot to lose by having the boss meddle with the details.”

The Wall Street Journal published a story on how companies are increasingly leaning on software to help them hire new people that are less likely to quit within six months. Bill skewers the management mentality that has generated a $3.8 billion industry—or as he says, $3.8 billion in pure waste. Read all about it in It’s All About People and Relationships.

Disruptive Management is an outstanding piece on the absurdity of only looking at innovation through the lens of end products. The management fad of analyzing how existing companies tend to resist “disruptive innovation,” as articulated in the Gospel of Clayton (Christenson), ignores the long-term, sustainable value that management innovation provides.

Finally, for all of you that have suffered through the deployment of lean tools and seen those improvement efforts come to naught, Kevin’s post—Sustaining, Leadership, and Why—on the necessity of understanding why you’re adopting a tool is as pithy as it gets. Read it in conjunction with this analysis of Sony’s demise and the absurdity of blaming Deming for their fall: Blaming Deming, Lean, and Six Sigma and the Importance of Why. (Don’t worry: both of these posts are far better written than their inelegant titles would indicate!)

Brad Power’s regular contributions to the HBR blog are seldom written about in the lean blogosphere, and I think that’s a real mistake. While not a regular contributing member of the lean community, Brad has been researching business process innovation for the last 30 years and has valuable insights to share. His posts are invariably well-written and filled with terrific stories and case studies.

Brad’s post, Understanding Fear of Process Improvement, is a perfect example. He posits that fear of change is the root cause of failures to create a culture of continuous improvement, and suggests three countermeasures: get people involved in the improvement; remove the downside risks and provide upside; and hire people who are committed to the organization’s larger mission.

If you’ve ever been involved in process improvement activities, you know the drill: map the process, identify improvement opportunities, and make an implementation plan. You also know that the momentum from these events usually fizzles out after a few months. In Get Your Team to Work Across Organizational Boundaries, Brad argues that the most important outcome of these activities is actually development of the team itself, and describes how social networking technologies offer new ways to support teams, especially process teams that cut across organizational boundaries. As he says, “constancy of purpose matters more than one workshop's flash of brilliance.”

Why Doesn't HR Lead Change? is Brad’s analysis of why the human resources department, which ostensibly should be at the forefront of any improvement process, typically lags, or actually acts as a brake on innovation and change. Brad believes that there are three root causes for this situation. Although he doesn’t provide countermeasures in this post (he does in other posts), the points he makes are seriously thought-provoking for leaders from all departments in your organization.

Those are my suggestions for valuable, pithy, and thought-provoking reading for the holidays. I hope you enjoy these posts as much as I did.

You can read the 2012 annual management carnival summary here, and you can follow John's semi-monthly carnival posts here.

Missing the forest for the (electronic) trees.

I've written many times before (as have many others) about the perils of constant electronic connection in the workplace. Now legendary professor Henry Mintzberg has published an interesting take on this problem, in the Winter issue of Strategy+Business. Leaving aside the issue of multitasking, Mintzberg points out that information-poor media like email and text messages take away the nuance and subtleties that can only be conveyed in face-to-face conversation. Mintzberg argues that

Managers who believe that they can learn about their department through email — rarely walking down the hall, let alone getting on an airplane — may find themselves in trouble . . . By giving managers the illusion of control, the rapid flow of information through new technologies threatens to rob them of real control. As demands pile up, managing can become more frenetic and superficial.

Recently I've seen companies with processes that aren't functioning particularly well. The problem, however, isn't necessarily that the process is poorly designed or broken. Rather, the breakdowns occur during handoffs that are communicated exclusively through email or some other electronic medium. Sometimes, one party lacks perfect understanding of the process. Another time, a simple request via email is interpreted as a peremptory demand, triggering intransigence or foot-dragging. Both situations cause a process to bog down, with finger pointing and blame the ultimate result.

The demands on your time -- and your managers' time -- are formidable. Email is a necessary and valuable communications tool. But it isn't, and shouldn't be, the only tool in your armamentarium. Otherwise, as Mintzberg says, "you'll gather the facts, but you may miss the meaning."

We are creatures of our environment

Stories about rotting garbage and table scraps aren't the place you'd expect to find powerful lessons about running your business. However, a story the other day on NPR about food waste in restaurants (about 10% of the food a restaurant buys ends up in landfills) provided this interesting insight:

The hardest part for many restaurants may just be getting the workers to become aware of how much edible food they waste every day. A few years ago, when [Chris Moyer of theNational Restaurant Association] was managing a big chain restaurant, he wanted to show his cooks there were plenty of opportunities to reduce waste. So he took away the garbage can.

"You'd be surprised, once you take away the garbage cans, if people have to ask permission to throw something away how little you throw away," says Moyer. "It was really quite amazing."

Let's put aside for the moment the issue of whether taking away garbage cans demonstrates respect for people. (It doesn't.) What's striking is how behavior changes in response to environmental conditions. If taking away garbage cans results in less food thrown away, what might happen if you took away the comfy chairs in the conference room? Or required that all meetings are stand-up? Most likely they'd end on time or early. (And, in fact, there are plenty of stories about companies doing precisely that.)

What if you rearranged where people sat in an office? I've been working with a company that complains about poor communication and coordination between the various groups involved in the product development process: the R&D and manufacturing engineers get last-minute changes dropped on them by the product marketing team. Perhaps not coincidentally, the marketing team sits at the other end of the building from the engineers. While it wouldn't be a panacea, I guarantee that if they mixed the marketing and engineering teams together, communication would be better.

Many years ago when it was still in start-up mode and cash was tight, the employees at Giro bike helmets asked Jim Gentes, the founder, to install a shower in the office. Gentes was afraid that he'd pay $5000 to put in a shower, and people wouldn't use it that much. So he came up with a simple solution: he put a piece of paper next to the shower showing the cost, and told employees to put their names down when they showered, and calculate the average cost of each shower. In other words, the average cost of the first shower was $5000; the average after two showers was $2500; after three showers, $1667; etc. By making the cost and the usage of the shower, Gentes ensured that people didn't take it for granted, and probably increased the usage, as people were motivated to drive the average cost down.

Think about it: what environmental changes can you make to improve the coordination, collaboration, and effectiveness of your teams?

What problem are you trying to solve?

NPR reports that Virginia's new set of education goals are higher for white and Asian kids than for blacks, Latinos and students with disabilities. According to the story, Virginia's state Board of Education

looked at students' test scores in reading and math and then proposed new passing rates. In math it set an acceptable passing rate at 82 percent for Asian students, 68 percent for whites, 52 percent for Latinos, 45 percent for blacks and 33 percent for kids with disabilities.

Winsome Sears, one of the Board members, explained the new goals this way:

"So why do we have these different subgroups? Because we're starting with black children where they are. We can't start them at the 82 percentile because they're not there. The Asian students are there. And so the real question is why aren't black students starting at the 82 percentile? Why? Why are they not there? That's the problem the board wants to solve."

Perhaps it's because I've spent much of the last week with a client working through A3 thinking and root cause problem solving, but the inanity of the Board of Education's decision really struck me. I mean, what problem are they trying to solve? No offense, Mr. Sears, but how exactly does lowering the bar to 45% help you fix the problem of black kids missing the 82nd percentile?

If they really want to improve educational performance, lowering the standards hardly seems like the right countermeasure. That's like lowering food safety standards and claiming that the food is now safe because only 1 out of 1000 hamburgers are tainted with salmonella instead of 1 out of 100. Or saying that a car has achieve the highest quality rating because it didn't exceed the 25 "allowable" defects.

It seems to me that the Board of Education is solving an entirely different problem: how to avoid getting penalized for failing to meet the academic goals of No Child Left Behind. If that's the case, then this countermeasure -- changing the standards -- is wonderfully effective.

Now, you can make a good argument that No Child Left Behind is a heavy-handed, poorly designed, ineffective tool for raising academic achievement. (And as a former teacher, I'm more than happy to make that argument.) However, if Winsome Sears and the rest of the Board want to solve the problem of why black kids aren't starting at the 82nd percentile, it's difficult to see how re-jiggering the standards is going to help.

The truth is that most problems have multiple root causes and require a suite of countermeasures to improve the situation. Developing those countermeasures requires a deep understanding of the true problem, and a great deal of time, effort, (and possibly) money. It's so much easier to just change the standards.

For me, one of the great powers of an A3 analysis is that the format makes it easy to read your argument "backwards." Because the analysis is laid out on one page, you can look at the proposed countermeasures, see whether they address the root causes you've identified, and decide whether they really help you close the gap you've identified in the problem statement. The Virginia Board of Education decision clearly fails that test:

Lower academic standards -> Help under-achieving kids -> Get all kids to 82nd percentile. I'm missing the logic.

And my guess is that if you look at many of the countermeasures your company puts into place, you'll see similar gaps.

What does your calendar say about you?

In contrast to instant messaging, text messaging, or email, communication time through traditional (snail) mail is measured in days and weeks. You'd think that too much time spent in that world would lead to a lack of sensitivity to how long things take and where time goes. (It flies, of course.) And yet Moya Green, the CEO of Britain's state-owned Royal Mail, can track the way she spends her time with a degree of precision that most businesspeople can't match.

In a McKinsey interview last month, Green demonstrates that she's cognizant of exactly where she invests her time and attention:

McKinsey: How do you strike a balance between the many demands on your time, particularly when driving change?

Moya Greene: I try to think about my agenda as divided into big blocks of time that I actively monitor. I recently did a diary analysis, which showed I spend roughly 15 percent of my time managing and understanding our employees. Another 25 percent of my time last year was devoted to changing the fundamentals of the company. . . . Next, I spent 15 percent of my time seeking to change the conversation inside Royal Mail so that we put the customer much closer to the heart of what we talk about and do. . . . A further 10 percent was taken up with what I call strategic realignment, helping people understand that we're going to make our money in future in parcels and packets, in media, and by selling our data assets in a more commercial way. That left 35 percent for everything else: organization, recruitment, managing the board, and crisis management.

I've worked with many senior leaders, and I seldom see this kind of clarity about how they spend their time. They always have a clear idea of where they want to focus their attention, but they rarely take the time to actually do a diary analysis to see whether they're acting on their intentions. In lean terms, they're excellent at the Plan-Do phases of the PDCA cycle, but not so good on the Check-Adjust phases. As a result, they have a very difficult time assessing their role in the organization's successes and failures -- did they spend too much time on a strategic initiative? Not enough time? Were there other issues? Who knows?

I've written about this topic before, of course, but I think Tom Peters says it best: you are your calendar:

"There is only one asset that you have and that asset is your time.

[Imagine you're a boss of a distribution center and] you say that this is the year of extraordinary attention to quality. Then at the end of the first month, I sit down with you and we go through your monthly calendar day-by-day and hour-by-hour. And we discover that with all the meetings that occur and all the surprises that come up in the course of that month you spent 6 hours directly on the quality issue.

Well, guess what: quality is not your top priority.

The calendar never, ever, ever lies.

If you say something is a priority, then it must be quantitatively reflected in the calendar.”

Can you analyze your calendar? What does it say about you?