Trust: very easy to say, very hard to do.

Trust: very easy to say, very hard to do.

May 29, 2017 | Governance, Leadership

Trust is the basis of our humanity, without trust, we cannot have relationships of any value, and the breach of trust once given  is an emotional wrench. The greater the level of trust given the greater the emotional pain on realising that trust has been breached.

Collaboration relies on trust, the notion that we need to put the best interests of a group ahead of our personal best interests is fundamental to success in any true collaboration.

Unfortunately, they are as rare as hens teeth.

The notion of commons, comes from medieval times, a common ground on which everyone had equal right to graze. However, if one person doubled the number of head he grazed, he gets a short term benefit, to the detriment of the others, and the foundation of the commons, trust and mutual obligation, is broken.

Trust is also something that is highly individual.

People can learn to trust each other, while not having any trust in the institutions they represent. This is perhaps best demonstrated by the Christmas 1914 football match on the western front between the opposing German and British forces in the trenches. The military leadership on both sides were appalled, that their fighting men were able to put aside the deadly enmity they so valued sufficiently to have a game of football in the spirit of Christmas.

We are wary of trust because it makes us vulnerable, we give it only after it has been earned, after the ‘trustee” has demonstrated that the trust will not be breached, that it will not only do us no harm, but that it is in our mutual best interests that we trust each other.

This presentation by David DeSteno on the psychology of trust is well worth watching and absorbing into  the way you consider your relationships.

 

8 human impediments to genuine business renewal.

8 human impediments to genuine business renewal.

May 25, 2017 | Change, Governance

Why are these  changes so hard?

Why can they not see that continuing on will be a disaster?

These are two questions that I often ask myself working with businesses in distress, or often just underperforming, and looking for some sort of renewal.

Neither is possible without change, as the old saying goes ‘do what you have always done and you will get what you always got’

Pretty common sense, so why is it so hard?

Over the 40 years of working with businesses that need change, first as one of those at the bottom of the tree wondering why the monkeys at the top could not see it, and for the last 22 as an adviser, I have seen a lot.

The first thing that seems prevalent is that change only happens with a significant catalyst of some sort. Usually it is the person at the top who finally commits to the changes, often someone new, who is prepared to push very hard, and to break the shape of the status quo, and reshape a new one.

Then they have to address the very human emotions that combined created the situation in the first place.

Uncertainty. Human beings hate uncertainty, it is usually more corrosive and more damaging than staying in a known state of misery. Collectively, we will do almost anything to feel safe and secure by removing uncertainty.

Saying ‘No’ is easier. Following on from the avoidance of uncertainty, often agreeing to something new or even slightly different enables some level of uncertainty, so the easiest thing is to just say ‘No’. This is why the first sale is always the hardest, you have to get over that psychological predisposition to stay with what is known and understood. As the other  old saying goes, ‘nobody ever got fired for buying IBM’

Loss of control. We like to feel we are in control, even if it is just our immediate environment, and the prospect of losing any of that control is painful. In a world where things are changing around us at apparent logarithmic speed, this loss of control of personal space can be alarming.

Loss of face. Losing face in some cultures is a horrendous possibility to face. Even in those cultures where it does not matter so much, we all want to be liked, to be respected, and by conceding change is necessary, conceding we may have even just condoned sub optimal  practises carries personal risk.

Competence.   Again, conceding that what has gone before is not good enough calls into question the competence of those who allowed it to continue, and in some cases, created the circumstances in the first place, and very few of us are happy to be labelled incompetent.

Change is hard work. Hard work is not just keeping your head down for an extended period, it is also the work of being prepared to suffer the stress of change. Much easier to avoid it, particularly as in most situations where change is necessary, everyone is already working hard, even if it is to fight all the stupid fires, so there is no time left to fix the causes of the fires.

Skeletons reappear. Most of us have a few skeletons buried somewhere, and while all sails on undisturbed, they will remain hidden, but once things get turned over, there is a risk of the ghosts of past stumbles being revealed to a whole new group.

The harsh reality. Sometimes all of the above may be in play, but the biggest link to the status quo is that in a change, people know they will be left behind. In a world of rapid technical changes, this infests many organisations as they set about dealing with the implementation of technology and productivity tools generally.

In my experience, there is no easy way to generate change, and make the new reality stick.

You can either do it progressively, piece by piece which requires leadership, persistence, and a preparedness to communicate, communicate, and communicate some more about the reasons change is necessary.

Alternatively, you can employ the ‘baseball bat method’, and force the change. This is painful, and leaves a lasting scar on not just those who get ‘batted’ but on the survivors as well.  Whichever course you choose, be committed, as the status quo is the most elastic and resilient thing in the known universe, hugely resistant to change and able to recover from a succession of near death experiences.

Change is absolutely inevitable, the very best thing you can do is embrace it.

How many baristas do we need to drive growth?

How many baristas do we need to drive growth?

May 24, 2017 | Change, Governance, Strategy

Coffee shops seem to be the harbinger of our growth patterns, they are popping up everywhere, staffed by baristas (has that become a profession?) with cutting edge hairstyles and tattoos. They all add to the GDP numbers in some tiny way, but are they all we need?

When you look at economic history, sustainable growth always comes from manufacturing, not services. Ok, some comes from agriculture, as we all need to eat, and I guess someone has to grow, transport and roast the coffee, but it pales into insignificance beside the society changing impacts of manufacturing.

When growth happens, it is as a result of manufacturing, and the changes that manufacturing drive.

Look at the culture changing manufacturing innovations of the past: The printing press,  steam engine, and the first wave of automation in the 70’s.

Now we are moving inexorably into the next wave, of  Virtual Reality, Machine learning, advanced robotics, additive manufacturing, and the changes will be profound.

In the past, we have always looked for productivity by building scale. In a manufacturing operation, the more you make of any one item, the longer the runs, the lower the marginal costs.

However, we are now approaching the point where we can create the next big change, shape the major technologies emerging.

Manufacturing robots that can be programmed to do the tasks that are not just the repetitive tasks they currently do, but the robots will start to learn, it is happening now

The next step is not just better smart products, but customised specialist products that combine the abilities of robots and additive manufacturing  to immediately create the products that you need.

The outcomes are that factories will move back closer to markets, they will be smaller more flexible and reduce the time frames of the chain, the products will be much cleaner and better for the environment, and will create growth in areas hard to imagine as I sit here in the middle of 2017

This does not happen by rote, we need to teach the new stuff at the universities and stop strangling TAFE, and importantly we need to teach these kids how to think critically and analytically so they have the intellectual tools to adapt, and we need to engage with the changes to ensure they are accommodated within our economies

The new manufacturing revolution will drive manufacturing and  consumption back to the smaller regions. China will become as expensive as Australia in 10 years, and the trade patterns will follow and I suspect  will accelerate regionally with lower barriers and shorter transit times,  rather than being international

We are reaching the point where increasingly challenging manual tasks can be taken by robots. This delivers a potentially huge productivity increase, but it also delivers one of the key questions of the 21st century: what happens to those displaced? Particularly skilled workers in their middle and later lives when retraining might sound nice, but has proven to be a mirage despite  the billions thrown at it.

However, there is a confluence of hardware and software happening at Moore’s law speed. The take-off will vary by sector and by economy, logically it will occur first in high cost developed nations and filter down

This will lead to a productivity surge, further reducing the disparity of costs between economies, leading to a change in the ‘offshoring’ that has occurred. It will no longer  be better to outsource  to China, outsource it to the bloke down the road, where when  necessary you can get our hands around his throat, and/or collaborate in a meaningful way that is very hard across borders, languages and cultures.

So how do you prepare for this?

Understand and be engaged with the developments occurring in your and adjacent domains globally. This is a big call, but putting aside some time for the reading and understanding of the relevant material by authorities and the those on the leading edge can make it a highly productive expenditure of that most valuable resource.

Normally I dislike the term benchmarking, as it leads to copying processes and programs that worked for others, but by the time you have implemented, usually less than 100% effectively, the trend setters have moved on so you are always playing catch up. However, in the case of keeping current, recognising the things the leaders are doing is pretty important, and modelling the best bits that suit  you can be very worthwhile.

Prepare your stakeholders, particularly the employees for the  changes to come. There  is nothing  so unsettling as uncertainty itself so my advice is to communicate extensively, encourage feedback and comment as well as input to the conversations.

Prepare the organisation for the changes that will evolve in the business models and supporting areas such as capital and human capability development.

As a final note, those that will survive do not have the luxury of time. The  average life of enterprises is shortening annually, it is really a commercial Darwinian process, and incumbents who are not willing or able to adapt quickly will go the way of ‘Lonesome George,’ the last of the Pinta island sub species of Galapagos turtles that dies almost on camera with David Attenborough.

 

Richard Nixon casts a long shadow

Richard Nixon casts a long shadow

May 22, 2017 | Governance, Leadership

 

In 1974 when Richard Nixon delivered his resignation speech, just before the inevitable impeachment, I was sitting in the home of Harvard Professor  Jim Hagler just outside Boston.

I was seeing first hand the implosion of a presidency from the perspective of a 22 year old Aussie who had by that time a pretty good education, but absolutely no experience beyond the surf, meat pies, beer  and university shenanigans that had been my life.

And yet, here I was seeing the anguish of Americans as they struggled with a presidency that had failed on the two counts that really mattered to them.

  • The personal qualities that it took an individual to be their President,
  • The  rule of law and order, let alone the constitution in which so many Americans are invested in a way alien to Australians.

The world has changed somewhat since 1974, but our expectations and hopes of leadership have not, despite the evidence of  the past 43 years, in both America and here in Australia.

However we still fervently hope and believe that our leaders are worthy, and when they prove not to be, we feel betrayed.

Trump has sowed the seeds of his own destruction via twitter.

He seems to think that behaviour that drives ratings as the host of a shock jock TV show is transferable to the office of the President.

Thankfully, it appears there is a difference after all.

Part of Trump’s appeal was I suspect that he was able to sell himself as a successful business leader and entrepreneur. Those skills that made him good at business would suit him to run the biggest enterprise in the country, the government, and bring some accountability to the bloated bureaucratic processes, without any of the baggage that comes with political and government experience .

Has not gone so well so far!.

If Congress was acting as a company board, as they should be, after all they are the representatives of the shareholders, they would be insisting on his resignation about now. The current rumblings of  an impeachment that will never happen because you need a 2/3 majority in the senate to ‘convict’  would be replaced in corporate life by one of those terminal conversations so loved on the ‘Apprentice’ TV show.

No CEO  of a competently run public company could survive the apparent conflicts of interest, loose mouth, inconsistent and shambolic behaviour, clear contradictions of positions taken almost in the same sentence, and outright lies that have characterised the first 4 months of the Trump white house.

We are better off here in Australia, but perhaps only just.

The spectacle during the week of various non entity politicians, along with several of some political status personally bagging Ken Henry as chairman of NAB when he dared to disagree with them, and articulate what any sensible person already knew, is a disgrace.

The treasurer a few weeks ago was encouraging political debate, encouraging the expression of views, and the first time it happens afterwards he and his colleagues go immediately for the language of personal vilification, ignoring the arguments.

On balance, I prefer it here, but what would we give for some genuine leadership without the shadow of self interest, power for its own sake, and sheer bloody-minded hubris?

7 ways to avoid a hiring failure.

7 ways to avoid a hiring failure.

May 3, 2017 | Governance, Small business

The small and medium businesses I work with are usually pretty wary of the recruitment consultants that chase them, promising to deliver the ‘Perfect ‘ hire for just 20% of their annual salary. They are usually seen, usually rightly, as just short term  ‘body shops’ that add little lasting value.

As a result I often get to have some input into the hiring decisions they make, as the ‘go-it-alone’ strategy using one or more of the on line job boards is becoming more common.

Taking on a new employee is a significant decision for a modest business. When it is a senior management decision it can be a make or break choice, and more often than not, once the gloss of the interview and enthusiastic references from the candidates friends masquerading as referees wears off, there are holes.

Making that right choice has two parts:

  • You need a realistic and detailed understanding of the job you are filling, its frustrations and challenges, along with the technical skills necessary to get the job done.
  • You need a good understanding of the underlying emotions, attitudes, and perspectives of the person you are considering.

Sounds simple, but we all know it is  not.

Over the years I have developed through experience and observation a set of personal criteria I look for when involved in this exercise. It is important for me to help get it right, as my clients rely on me for  the advice that is improving their businesses, so making a mistake can badly damage my position with them, and more importantly, compromises their efforts to change, and evolve the business.

The list has 7 elements, after the technical parameters of the job have been adequately addressed. All are hard to assess in an interview type Q&A, but can emerge in a more casual conversation, that is less about the role, more about the person.

  • Curiosity. In a world changing as rapidly as ours, domain knowledge cannot be static, so being curious about what is going on around them, about other people, technologies, environments, is a core part of a person who will continue to learn by absorbing new information, and keep being able to contribute.
  • Absorb blame while passing on praise. We have all seen the destructiveness of someone who does the opposite.  The ability to give credit for success, while making others feel ‘safe’ to experiment, think laterally, and risk failing is a powerful leadership quality.
  • Action oriented. There are those that talk, and those that do, and we all know which is the better. Being prepared to take decisions, often without perfect information, recognising not all decisions will be right, but doing something, learning as a result, and adjusting as necessary is way better than waiting for perfect information. Mixed in is a recognition that due diligence in risk assessment is crucial, the widely accepted ‘failure porn’ is to my mind destructive.
  • We all want leaders, but we usually hire managers, to get stuff done, to exercise organisational power. Far better to have a group who are able to lead without the authority, who inspire performance, and create an emotional commitment.
  • Prepared to prepare. Generally, the more preparation that is done, the easier things look. Playing football (Rugby, the heavenly game) in my youth at University, we had a coach who used to drive us into the ground at training. He used to say at least 10 times a session, ‘train hard, play easy’, a lesson that has served me well.
  • ‘CUR’. My personal acronym for ‘Cock-Up Recovery’. Everyone makes mistakes, except perhaps those who do nothing, so the measure of the person is the manner in which they recover, address the situation, and as the saying goes, ‘get back on the horse’.
  • Operate well under pressure. Let’s face it, life is a roller coaster of deadlines, demands, and crises, so being able to operate optimally under pressure is critical to good and consistent performance.

Keeping the conversation casual is important, and I usually end by asking something like, ‘what have you accomplished that makes you proud?’ In most interviews, no matter how casual, people default to what they do, or have done.  ‘Accomplished’ is a bit different, the word elicits a more personal response, something that may offer an insight into the person, and what is important to them.

 

 

 

Will your O-ring kill you?

Will your O-ring kill you?

Apr 10, 2017 | Governance, Leadership

We are all familiar with the notion that a chain is only as strong as its weakest link, it makes absolute sense.

However, not a lot of us have ever considered the idea that our weakest link could kill us, and yet, it can.

On January 28, 1986, the spaceshuttle ‘Challenger‘ exploded 73 seconds into its flight, killing the 7 aboard.

Challenger exploded due to a known fault, something that engineers had been warning about for some time, a faulty O-ring design. What is in effect a cheap rubber piece, a simple part of a hugely complex design proved to be the weakest link, and caused the catastrophic failure.

Everything else in the launch worked absolutely as per expectations and specifications.

The simple known problem, a cheap part, was the weakest link and  brought it all undone.

As you remove potential sources of variation from a process, the average level of reliability and repeatability of increases, and the tension in the system increases as a result. Therefore, when one link fails, the failure becomes more painful, obvious, and sometimes hard to fix. The management task is to identify the potential problem before it becomes one, and remove it.

That is why, at the core of the Toyota Production System, you have an ‘Andon‘ system, which enables anyone to bring a halt to a production process to fix a potential problem before it becomes a failure.

The Rogers commission set up to investigate the Challenger disaster, amongst a raft of findings was highly critical of the NASA culture that prevented the well known and documented concerns with the performance of the O-rings being addressed. Of particular concern was the performance of the O-rings in the cold weather that occurred during the night before the launch. The temperatures experienced on the night of January 27 were way below specifications, and there had been no testing done to gather data on what might happen under those conditions, and serious concerns had been formally expressed.

Had there been a simple Andon system in place, rather than a Byzantine hierarchical culture, the launch would not have proceeded, and the disaster been averted.

Your production processes may not be as life defining as those  in the NASA space program, but the principals remain the same.

Identify the weak points in the chain, and ensure there is explicit go/no go, or Andon points, that enable the inevitable process failures to be caught before they do any real damage. It may cost you some time in the short term, but will pay huge dividends in your ability to reliably and cost effectively deliver to your stakeholders.