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Female guru alert: Amy Edmondson in July/Aug HBR

Wednesday, July 2nd, 2008

Amy Edmondson of Harvard Business School appeared on our recent list of Overlooked Female Business Gurus, and she has also published an article in the July/August Harvard Business Review. Titled “The Competitive Imperative of Learning,” it’s a blockbuster that will cement her position on the guru list for some time to come.

Edmondson persuasively argues that a focus on efficiency in most companies chokes off resources for innovation and learning and creates an environment of harried, fearful employees rushing from task to task. Sound familiar?

In such an environment, given that the business, market and competitive playing field are changing continuously, the certainty is that the company will lack the learning, vision and insight to adapt itself to new realities. In essence, it will become a highly-efficient producer of last year’s products and services. The market will have moved on.

Edmondson’s work complements that of Dave Snowden and Mary Boone on the Cynefin Framework. Snowden & Boone describe simple and complex business contexts and the challenges these different contexts pose to managerial decisionmaking. In simple contexts, best practices and efficiency are the tools for success. But in complex contexts, learning, experimentation and adaptation are key.

As Edmondson points out, “the influx of knowledge in most fields makes it easy to fall behind.” In other words, the space where competitiveness is created today is the complex space.

Three key inhibitors to learning environments are time, safety and review. Efficiency-based companies don’t allow time to think and reflect–the emphasis is on processing and dispatching tasks quickly. (Gary Hamel discussed this issue nicely in “The Future of Management.”)

And few companies provide the psychological safety required in a learning environment. Learning requires failure, failure is stigmatized, therefore people try to avoid it. Or if it’s unavoidable, it is covered up or played down.

I can tell you based on my work to date on The Mistake Bank that psychological safety is a big issue. I have had numerous dialogues with colleagues, members, mentors, etc., which have involved the ramifications if someone were to discover the mistake the person has contributed to The Mistake Bank.

[My position on that matter is this: people who admit mistakes are more valuable to companies, customers and colleagues than those who don't--because we all know that everyone makes mistakes. No exceptions.]

Finally, Edmondson emphasizes the need for disciplined reflection and review. By evaluating, discussing and communicating the results of new ways of doing things, companies achieve the payoff of experimentation. My experience is that most companies don’t like to look back.

There’s a lot more to the article than I’ve discussed here. Read it when you have some time to think and reflect! (Better yet, talk about it with a colleague.)

Tags:
complexity, decisionmaking, teamwork, collaboration, innovation, learning, Harvard Business Review

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An important definition of sensemaking

Saturday, June 7th, 2008

In trying to talk to companies about using narrative techniques and other ways to mine the non-quantitative data they have but never make use of, especially for strategy and innovation, this post from Dave Snowden will be a significant asset.

Sensemaking is the alchemical step where the mess is sorted through and the themes, threads and weak signals are detected and clarified. From there, people can make decisions and act.

In other words, it’s the most important step.

Tags:
complexity, decisionmaking, leadership, narrative, innovation, strategy, sensemaking

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To progress in complex environments, experiment

Friday, May 16th, 2008

I was talking to my wife tonight about a discovery I’ll call the “Mistake Bank Manifesto” which I’ll post about later. The upshot of what I was saying is that the folks who wrote the Mistake Bank Manifesto (I named it, others created it) asserted that learning from mistakes, while exceptionally useful to senior leadership teams, is often highly unnatural for very successful leaders.

I disagree, said my wife. Most of the successful people I know are very good students of failure.

So I faced a conundrum. The experts from Harvard and the Hay Group said one thing, my wife (the Vice President of Common Sense) said the opposite. So I thought on it a moment. Then: aha!

I said, successful entrepreneurs tend to be students of failure. But those who rise through a corporate hierarchy don’t confront failures often (usually the results of corporate initiatives are ambiguous at best, and invariably termed successes of some sort), so for them learning from failure is unnatural. That’s what the book was saying.

OK, I’ll agree with that, said the VP of Common Sense.

This is an exceptionally long prelude to a post today from Dave Snowden at Cognitive Edge (Shawn Callahan at Anecdote has already posted a thoughtful reaction to this post) on “Coherence and Uncertainty” or, as I interpreted it, when the outcome is uncertain, try something to aim you toward your objective–in other words, experiment. (Dave calls these safe-fail probes.)

Experiments are probably worthwhile, according to Dave, when they are “coherent” (or consistent with what has happened or could happen), relatively cheap, and will provide useful learning even if they don’t succeed.

Which brings me back to the entrepreneur/corporate question. Entrepreneurs tend to have an objective, may be willing to use many different ways to reach it–but in the service of some coherent vision. Experimentation is natural for them. They usually don’t have much money. They are resilient. And they hunger to learn. Safe-fail for them is a way of life.

Corporate types? Well, no. The whole safe-fail approach is alien to the corporate environment. Heard the phrase “paralysis by analysis”? If you work in a large company you’ll hear it weekly. Creating the environment for creative experimentation will require a cultural shift in how companies view their workers and vice versa.

Who’s ready to get started?

complexity, experimentation, decisionmaking, leadership, management, organizational behavior

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Multiplayer games lessons #2 – embrace of failure and iterative learning

Wednesday, May 7th, 2008

I posted yesterday on the recent HBR article “Leadership’s Online Labs,” in which the authors discuss the results of a study of high-performing users of Massively Multiplayer Online Role-Playing Games (MMORPGs), like World of Warcraft. In these games, participants worldwide take on roles and participate in quests and adventures–requiring the players to act in concert to achieve their objectives, planning together and using their varied capabilities to, for example, storm and take control of a castle against determined adversaries.

The article focuses on how the lessons learned by the MMORPG standouts could be applied to business. One passage in the article was very relevant to the Mistake Bank concept:

Trial and error play a big role in accomplishing game tasks. Failure, instead of being viewed as a career killer, is accepted as a frequent and necessary antecedent to success.

In one incident that we recorded from EverQuest, seven guild members prepared for a brand-new quest that required them to get their team across a large lake protected by a gruesome and hostile creature. Although they had formulated a strategy based on information gathered in advance, everyone seemed comfortable with the high likelihood of failure, at least initially. After a first attempt, in which the whole team nearly drowned and was forced to retreat, members quickly began plotting a new strategy in the spirit of a fundamental gamer maxim (one not heard very often in business): “Let’s try that again.”…

Frequent risk taking allows players to practice the art of weighing odds calmly in uncertain environments. Confronting risk routinely and with a level head will be an important leadership skill as the real-world business environment becomes more uncertain and as success comes to depend more on innovation than on execution. Organizations can help prepare leaders by fostering a culture in which failure is tolerated. They can expose leaders to risk by mimicking the structure of games, breaking down big challenges into small projects. Failure, after all, is clearly more palatable for the individual and more affordable for the organization when it happens at the project level rather than on a larger scale.

“Failure is a frequent and necessary antecedent to success.” These few words illustrate one of the major systemic failings of companies today: instead of encouraging and learning from failures and mistakes at the project and small-group level, and adjusting course or changing behavior as necessary, they repress failure, refuse to acknowledge it, and don’t learn. Resulting, of course, in a larger-scale catastrophic failure that everyone could see coming yet no one could acknowledge or do anything about.

Tags:
Mistake Bank, mistakes, failure, learning, uncertainty, decisionmaking, Harvard Business Review

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Top 5 Harvard Business Review breakthrough ideas

Tuesday, January 29th, 2008

In which we select the best of the annual Harvard Business Review list of twenty breakthrough ideas (free link) for the benefit of time-constrained executives everywhere. This service is provided at no extra charge.

1. “Here Comes the P2P Economy,” by Stan Stalnaker. Web 2.0 is accelerating a shift to an economy with many, many small sellers.

2. “Task, not time: Profile of a Gen Y Job,” by Tamara Erickson. Young workers are not tied to the clock, or the office. Give them specific tasks and let them do them when, and where, they see fit.

3. “A Doctor’s Rx for CEO Decision Makers,” by Jerome Groopman. A relatively new technique–intensive peer review of failures–allows physicians to detect and understand decision biases that contribute to misdiagnoses. Such a process can help business decisionmakers as well.

4. “The Gamer Disposition,” by John Seely Brown and Douglas Thomas. People adept at multiplayer computer games have qualities (such as desire to improve, appreciation of diversity, and results-orientation) that businesses should be seeking in their employees.

5. “What Good Are Experts?” by Michael Mauboussin. Research and experience with decisionmaking tools such as prediction markets is showing that expertise has a more narrow application than previously thought. Good businesses will assess which tool works better for the problem at hand–prediction markets for probabilistic problems, computers for rules-based problems, and experts for the remainder–and act accordingly.

Bonus “I really didn’t know that” item: “Islamic Finance: the New Global Player,” by Aamir Rehman and Nazim Ali. Despite the seemingly-restrictive rules of Sharia, Muslim law, on investing and charging interest, a vibrant and growing Sharia-compliant financial marketplace has emerged in the Islamic world.

strategy, decisionmaking, finance, learning, mistakes, organizational behavior, Harvard Business Review

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More on using the Cynefin framework

Friday, November 16th, 2007

If you found value in Dave Snowden’s and Mary Boone’s recent Harvard Business Review article (discussed in an earlier post), you should read Dave’s post on “safe-fail probes”–it’s sort of a second chapter to that article focusing on applying the Cynefin framework.

business development, complexity, decisionmaking, leadership, management, organizational behavior, sales process, sales, Harvard Business Review

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HBR article demonstrates that leaders need to manage complexity

Thursday, November 1st, 2007

“We need to document our processes!”

I heard this again and again at various companies I worked at over the years. And that’s a fine goal, to document processes. But the thinking–that if processes are documented then we will be able to perform high-quality work and be successful–is flat-out wrong in many circumstances.

Why? Because many (and many of the most important) business problems can’t be reduced to a repeatable process. This view is described in an article in the November Harvard Business Review, “A Leader’s Framework for Decision-Making,” by Dave Snowden and Mary Boone (link – $$). (Prior references to Dave Snowden’s work can be found here: 1, 2, 3.)

In it, Snowden and Boone describe the Cynefin framework, a model that helps put business situations into a context that guides how they should be addressed. The framework has four primary segments:

Simple – repeatable processes that can be described by best practices (e.g., how to determine whether a mortgage applicant is qualified)

Complicated – “the domain of experts,” according to Snowden and Boone; where complete data is available, and issues can be solved with analysis (e.g., finding underground oil deposits)

Complex – where multiple variables interact unpredictably – “the realm of ‘unknown unknowns,’ …the domain to which much of contemporary business has shifted.”

Chaotic – where no manageable patterns exist, “the realm of unknowables” –e.g., September 11, 2001. In this case, the best response is to do something and assess what happens.

So, back to documenting processes. Simple processes and their best practice should be documented and followed. Complicated processes, too, can benefit from discipline, though there is value in dissent and dialogue. Documenting complex processes doesn’t do much of value–repeatability is impossible and in fact counterproductive to attempt.

Here are some business processes that would fall into the complex domain:

new product development (how people learn about and use products can have a significant effect on how the product evolves)
entering a new market or geography
making an organizational change
a B2B sales pursuit

So how to manage these if they can’t be boiled down to a cookbook? Boone and Snowden recommend involving more people in decisionmaking (sounds a bit democratic); setting some rules or guidelines to channel behavior (i.e., in a sales pursuit, we will never respond to a tender that we didn’t know was coming); encouraging dissent; creating an environment where good things can emerge, and nurturing those things.

In my experience, managers are still trying to shoehorn all their business problems into the simple or complicated domains. The more quickly they accept the complexity of many critical areas, and manage them appropriately, the sooner we’ll stop wasting human resources and start achieving better business results.

And that’ll be something worth documenting.

(graphic: the Cynefin framework from Cognitive Edge via Wikipedia)

business development, complexity, decisionmaking, leadership, management, organizational behavior, sales process, sales, Harvard Business Review

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Why I don’t hate US Airways right now

Wednesday, August 22nd, 2007

21 August 2007, 2:30pm UK time. I just arrived in England on US Air Flight 734, five hours behind schedule. The plane was two hours late getting to the departure gate from the maintenance hangar. We then boarded, and sat for nearly two hours while the pilot periodically told us about the progress the mechanics were making on the problem with the brakes. Then we got off the plane, moved down the concourse four gates to get on the other plane. While waiting to board, we heard that the mechanics had fixed the first plane. Finally we reboarded the original plane and took off at around 2:00 am.

Throughout the long wait, I’m saying to myself, “I’ve been reading about these horror stories all year. Now I’m in one.” I waited for the passengers to start to melt down–first the small kids, then the adults, the flight attendants, and finally the crew. We’ll be reading about this in the Wall Street Journal Middle Seat column soon, I thought.

So how come it didn’t happen?

I’ve been thinking about this the whole flight. And the only explanation that makes any sense to me is the attitude and poise of the flight attendants, gate agents and crew.

They kept calm during the whole ordeal. They provided as much information as they had, when they had it. They apologized for the inconvenience, yet never got defensive. And once we got on the flight for the last time, it was all business.

Example: I asked for a glass of wine with my dinner, and fully expected them to charge me for it. I was ready with an obnoxious comment. But the flight attendant handed me the cup and the tiny bottle, and moved on without a word. She knew, the whole crew knew (and I should’ve known) that drinks were on the house for that flight. It didn’t need to be advertised.

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