Behavior and Brilliant Bastards

October 1, 2014

Behavior is a funny thing. We usually take it for granted because it seems to be something personal. It seems part of someone’s personality, not to be meddled with. And can we even influence or change it?

But then, on the other hand, it is too important to just let it go. It can be one of the most powerful assets in a company, if the collective behaviors of people work towards a collective ambition and common goals. And if not it can turn into a very destructive instrument.

Another reason why behavior cannot be ignored or in all cases accepted is that there is a clear relation between behavior and Company Culture.  Because of this relation it can influence culture and thereby have an effect on other people’s engagement and performance. This in turn of course has an effect on the chance of implementing your strategy and being successful. A mouthful, of course. But everyone knows this.

Our Qhuba Leadership team had a diner last week and we had asked the twelve participants to do an Erika. Remember Erika? She was the first streaker, throwing off all ballast (more specifically: all her clothes) to focus on her goal (whatever that may have been, probably five minutes of fame).

erika

 

 

 

 

This was in the eighties so I think she got what she wanted.  The reason I mention her is because of the “Erika Principle”, which might help you focus. It stands for:

  • Erase
  • Reduce
  • Increase
  • Keep
  • Add

So we asked everyone what not to do (or do much less) and what to start doing (or do much more) to implement our Strategy. we expected discussions about focus, markets, services, strategic directions, or activities, but what we noticed was that many of the things people mentioned were behaviors.

The relation between behavior and culture, as mentioned before is a direct one, but not a one-on-one relation. There are many definitions of what a company- or a corporate culture is. They range from “the way we do things around here”, to “the collective attitude of all the people”. I prefer a more specific definition: a Corporate Culture consists of shared ambitions, behaviors, shared values and shared assumptions of all who play a role in the company.

 The tricky thing is that even if some of the ambitions, behaviors, values and assumptions are shared explicitly, a lot remains below the surface. Mental picture: the Iceberg. What is visible is usually in documents that no one reads and in behaviors that everyone sees. That is why I believe that the influence of behaviors is large, which is exactly why as the leader of a company you cannot accept disruptive or destructive behavior and should do everything you can to promote behavior that is in line with your ambitions, values and believes. And sometimes that hurts.

Some people in key positions can be very good at their jobs in the sense that they have all the intellectual capabilities and the experience to succeed, but they can still be unsuccessful and even damaging to the company because of how they behave. We call them Brilliant Jerks. Sorry for the title of this blog, I could not resist the alliteration. Some have limited social skills which might alienate especially those they have a hierarchical relationship with. Even more serious is negativity, sarcasm and disputing as a way of participating in conversations. This behavior is often seen in College fraternities – in fact the Dutch word for Fraternity is Dispuut. It  has no place in a professional environment, though. Still, you will see it everywhere. The colleagues who can not sit and listen to anyone or any presentation without interrupting every few minutes. And when that does not have the desired effect or kickstart a heated argument, they will up the ante and by taking remarks or even words out of context to pin someone down that way.

We do not accept this. Instead we ask them if they are aware they do this, and if they are, why they do it. Explaining how it destroys any exchange of information, as well as cooperation, creative processes and decision-making sometimes helps. If it continues, we confront them, and as a last resort: we remove them.

Of course the best way to influence behavior is by setting the example ourselves,  and expect the same from our (Leadership) team.

 


Paradoxes and Dilemma’s

July 2, 2014

Last Sunday, for the first time in five years, Qhuba had a Beach Party: we had Beach Volleyball, a Sand sculpture-artist, barbecue, Soccer Championship on a big screen, and… partners and kids.

It was great. Why didn’t we do that before? Company – Family – Party,

Indeed, why did we not? Work life and personal life are interconnected nowadays, we work from home sometimes, they hear the stories, and how much fun is it when your kids and your spouse get to meet the people you work with and talk about? Great Fun! And probably I am the reason it never happened before, because work and home were different worlds me, and I kept them separate. This seemed like a good idea, and now it does not sound like such a good idea anymore. Or maybe for some people it still is, since not every attends these kinds of Parties, and not everyone who does attend brings his family. Not everyone has a family, for that matter.

Trying to think this through it becomes obvious that companies and people are constantly faced with Paradoxes.

This was an example; there are many more, bigger and smaller:

 

  • Work and Private mixed or separated
  • Command & Control, or Self Steering?
  • Customer Focus, or People First?
  • Collective growth or personal development
  • Lean, or Agile?
  • Exploitation or Exploration?
  • Management or Leadership?
  • Focus or differentiation?
  • Short term or long term
  • Cash or Value?
  • Product focus or Market orientation?
  • Network company or traditional Hierarchy?

 

The list goes on as long as you want, but first this: are these Dilemma’s or Paradoxes. I believe the difference is crucial. As far as I am concerned they are Paradoxes. In my definition a Dilemma is an “either-or” contradiction, usually the result of, or the solution to a problem. Good stuff for tough Leaders, because they need to make a choice between two alternatives that appear to be equally attractive or unattractive.

A Paradox on the other hand is an “and-and” challenge, seemingly contradictory and exclusive at first glance.

 

 

But what if the juxtaposition of alternatives is only perceived, and we do not think the challenge through, or we are not open to new possibilities as a result of our background or our worldview? Our opinions are often shaped by assumptions about what is right, and we act in accordance with those assumptions, without questioning where they came from.

If we do this, we turn Paradoxes into Dilemma’s, which we will then solve by making choices that have only losers, leading to polarization, negativism and missed opportunities.

 

Bob de Wit and Ron Meyer wrote about this in their book “Strategy Synthesis – Resolving Strategy Paradoxes to create Competitive Advantage”:

Most people are used to solving puzzles, resolving dilemmas and making trade-offs. These ways of understanding and solving problems are common in daily life. They are based on the assumption that, by analysis, one or a number of logical solutions can be identified. It might require a sharp mind and considerable effort, but the answers can be found.

However, most people are not used to, or inclined to, think of a problem as a paradox. A paradox has no answer or set of answers – it can only be coped with as best as possible. Faced with a paradox, one can try to find novel ways of combining opposites, but one will know that none of these creative reconciliations will ever be the answer. Paradoxes will always remain surrounded by uncertainty and disagreements on how best to cope.

 

So Paradoxes require effort, and learning how to deal with them, rather than killing them by making simple choices. A few simple steps might help, but it is a journey into uncharted waters.

The first step: Acknowledgement: make clear and agree on the fact that you are dealing with a paradox and not with a Dilemma that requires a “yes” or “no”, or a “left” or “right”.

Then: Accommodate a conversation, a discussion or a process. This might be the hardest part; talk about the paradox without all your preconceived notions of “how we do it”, or what is best, but instead look at the alternatives from all sides, seriously considering both their positive aspects as well as their negative aspects.

After that: Acceptance: we need to accept that for most paradoxes there are not simple solutions, and that the outcome is uncertain, as it the future. A change mindset helps. Let’s have that Family–thing and see what happens.

And finally: Creativity: look for workable ways to deal with complex concepts, systems, structures and solutions. Experiment and be prepared to turn the whole thing upside down.

 

And complexity…? If we can give each other the leeway to organize a Beach Party, to attend or not to attend, and to bring spouse and kids are not bring them, and if our kids can build sandcastles together, and decide to destroy them again, or finish them, or to play volleyball or watch soccer then we should be able to deal with the business paradoxes, too. Especially if we are able to admit that we will be wrong sometimes, or even that we want to be wrong.

 

For all who want: another Beach Event next year. With kids, Or without, Or both. I will be there.


Why we all (should) hate “How”

March 25, 2014

So much can be read from the way people talk. The choice of words is something worth paying attention to. Are they constantly talking about I rather than about We? No need to explain what it means. Although: here context plays a role, too. Are you having a discussion about Strategy and choices? Than the I-sayers might have more focus on their own agenda and personal feelings than on the collective ambition and the team. Are they we-sayers when talking about Execution, Objectives and responsibilities? Make sure people take responsibility for what they promise to accomplish, for the effort they put into it, and for the results.

I have similar experiences with the word „How”. Usually How refers to the process, and as soon as people, for instance in a Management Team, start diverting attention from the content to the process, you can conclude that they either lack the content, and have no opinion about the subject at hand, or they are stalling. Both pose serious problems for decision-making. The question Why a decision should or should not be taken is the crucial one.

When executing, it is the other way around. When someone has taken responsibility for implementing a decision, focus from his Peers or his Manager on How he should do this will most likely not lead to better results, but reduces the responsible person to someone who does not feel trusted with the task.
Not letting your employees figure out how to go about their business is an excellent way to make them stupid. Treat them like kids and you will have a Kindergarten on your hands instead of a company. or an Army – which in some circumstances (like War) has it use too.
Slide1Talking about Words, War and Companies: don’t we all love the idea of People, Planet, Profits, as sketched by Peter Frisk? Or for the realists, like Ben Horowitz: People Product Profits? And don’t we usually see the exact opposite? More along the lines of Politics, Paranoia and Pay-for-Preceived-Performance? Now that is something we want to do something about. An excellent Why (we want to do it differently).

And what about “How”? Does it have any use? Sure it does. In: „How can I help?”


How to build a business – focus

January 9, 2014

POPA new year, that means resolutions, plans and budgets. This is a confusing process, both personally and professionally, since it has to do with choices. In business of course the first choice of course is: are we going to choose – and thus focus – or are we going to diversify – and thus have more opportunities and less risk? Then there is a multitude of related choices: Clients Satisfaction first, or Employee Engagement; Command and Control or Self Steering teams, Cash or Value?

 

 

Undecided, you read a book under the Christmas tree – thank you Santa – and you stumble across the immortal quote: “It is our choices that show what we truly are, far more than our abilities”. Admittedly it was not Seneca or Socrates who said that, and not even Jim Collins or Michael Porter. It was Harry Potter. He did not do too badly for himself, did he? So that is decided. We choose. We choose why we do things, and what we do. And on a personal level how we do them. Professionally we let others decide how they do the things they are supposed to do. Or we should, if we can resist the urge to manage, or at least: to micro-manage. There we go again. More choices: do we Strategize, do we Lead, or do we Manage? Zappos gets rid of managers this year  but not of all hierarchy, and it might work for them. We tried it at Qhuba, too, last year but were not too happy with the results. A lot of time got wasted on… making choices. Time that could have been spent on clients, or on communication, or on learning, or on employee engagement, building trust and celebrating successes.

 

The answer of course is: we need to do a lot, for different purposes, and at the same time we need to focus and filter out the distractions.

 

As a Business we will focus on what we do best and where we can make a real difference: Business Technology Management. If there is no Technology component we won’t do it. Better to build on an established reputation, network and organisation than trying to establish new ones. Saras Sarasvathy  would probably call this the Bird in Hand principle. A treat she recognized in expert entrepreneurs.

 

As Leaders we will focus our attention, too. That seems easy enough, but after some searching, researching and soul-searching, this is also a subject with several dimensions. Most things come in three’s (even airline crashes). In this case: focus on yourself, focus on others, and focus on the wider world.

 

The inward focus, usually associated with authenticity, self-awareness and self-control (or: willpower) is an important characteristic for leaders, if in balance with the focus on others.

 

The focus on others does not come natural to all. It is usually associated with the term Empathy, which is often misunderstood as “being overly sympathetic”, “soft” or “compassionate”. It is none of those, but has more to do with (of course) three things: how we can explain ourselves to others and understand how they perceive us (cognitive empathy), being able to understand how other people feel (emotional empathy) and being able to sense what other people need from you (empathic concern). Being able to do all that, and especially in emotional empathy some of us, including myself, could still learn a thing or two, enable us to decide if we want to meet the other person’s need. And hopefully that is a deliberate, and sometimes tough, decision.

 

The focus on the outside world – and this is where the distraction lurks in the shadows – is a balance between focus on the job at hand: taking advantage of what we have and what is working now (exploitation), and all the people, information and opportunities out there, that might be crucial for your future success (exploitation). The problem is that there is so much out there, and the minds of the curious easily wander off. Or maybe exploration is just much more fun than exploitation. Still, more is not always better, and more than forty years ago we have been warned that “a wealth of information creates a poverty of attention”. The original text of Herbert Simon’s “Designing organizations for an information-rich world”   is fun and gives an interesting perspective on where we came from, if you can spare the time and attention.

 

 

And as a person? Well: get back to the my New Year’s resolution:

Focus your attention, pick your battles, plan your travels and pop your bottles.

Oh yes and I have just sent in my registration for a coaching course. Questioning, ok. Listening: to be improved. Emotional empathy: might need some work. Happy New Year.

 

POP with Power


How to build a business – Strategy Execution Cycle

August 3, 2013

Building a Business starts with an idea, which is then converted into action.

Simple and straightforward, but not always enough to be successful. Libraries can be filled with books about how this conversion is done, and usually the terms Strategy and Management are introduced on the first page. It is not always clear what is meant by the terms, and the explaining usually involves many more terms, like mission, vision, leadership. Once you are sufficiently confused you are lucky if you can understand where the author is taking you. Bullshit Bingo is never far away.

What is a Strategy really: is it a statement, or a plan, or just a hypothesis about value creation?

And what about Management? Sometimes you are introduced to the world of let it all run it’s course, your people will know what to do, the collective will manage itself (as Ricardo Semmler does), and sometimes to give every single employee a specific responsibility and task, and constantly measure how the task is performed, with Key Performance Indicators (Robert Kaplan).

Unless you want to turn into a one-man show, it is important is to be able to share your idea with others: Why do you want to do it, what do you want to do and for whom. And how will you be successful: Can you identify what the success-factors are, decide which of the underlying activities are vital and are you able to measure if they are performed up to the standard you have set for yourself and your business?

There is no single truth of course: are we talking about a bar in Berlin, a multi-national enterprise run from the United States, or a Production Plant in China? Hardly the same thing. Where you do it matters a lot: Context is crucial.

Equally important is who you have around you. Can you inspire them and share your vision and some of your responsibilities with them, delegate some of the vital activities to them? Time to get organized.

This requires planning and probably money. Decisions are needed on what initiatives have priority are and how they are funded.

Once you are in business the execution of your idea needs constant evaluation and adjustment, just like a hypothesis needs testing and change.

We believe these are five steps that not only reflect common sense but are also universally crucial to bring a business idea to fruition. We have called this approach SCOPE. An acronym where each letter represents a stage in the process of Strategy Execution:

Strategy – Context – Organisation – Planning – Execution

For Qhuba and its clients we have taken the “buffet approach”. You will pass all the five stations, but what you use from the process and the templates depends on your needs and appetite. The full cycle looks like this:

Slide2

In the middle the basic templates for communication:

  1. The Business Blueprint, which describes the building blocks behind the idea: the values, and the vision, the words you want to own and the x-factor you think you have. In short: the success-factors
  2. The Strategy Map, which describes the value creating activities through series of cause and effect linkages, clustered per success-factor
  3. The Scorecard, which describe the objectives per activity per success-factor.

Nothing is new here, nothing is revolutionary. The Plane, the Crew with the Flight Plan and the Cockpit, if you like analogies.

The only aim is to make a clearly defined approach with unequivocal terms and definitions and some practical tools available for all.

In five short articles we will describe the five steps, as well as the three tools, and then we will go through the whole sequence for our own company.

If you like the approach you might want to do the same for yours.


How to build a business – Agility and Innovation

March 24, 2013

Recently someone drew my attention to the report NL2030, published by BCG. The authors believe that in the Netherlands, to enable further growth of our prosperity and wellbeing we need to adopt a radically new business model. That raises some interesting questions, such as “Does something like  Dutch business model even exist?”, “what would it be based on?”, and: “why does it need to change?”.

The premise of the argument of the authors seems to be that country specific advantages that we used to have in the past, such as geographical location, infrastructure, and the associated foreign language skills and commercial spirit, no longer give us a any benefits. Thus, we are dependent on business benefits.

The World is flat

Ok. What do companies have to deal with? They are faced with an accelerating speed of change, mostly through technological innovations, with customers who have more and more specific wishes, and with a world that becomes flatter. I assume the authors are referring to Friedman’s idea of a global marketplace and almost realtime access to data, information and ideas from virtually anywhere

At first sight it seems to me that those are circumstances in which good companies could flourish.

The final step in the reasoning of BCG: If changes take place faster and faster we need innovation talent and social adaptability. People that love change and a society that facilitates it. And unfortunately – says BCG – those are not qualities that The Netherlands excels in.

The World Economic Forum, by the way, does not agree. In their “Global Competitiveness Report 2012-2013” they rank The Netherlands in the top ten, and they say: ”

The Netherlands continues to progress in the rankings, moving up to 5th place this year. The improvement reflects a continued strengthening of its innovative capacity as well as the heightened efficiency and stability of its financial markets. Overall, Dutch businesses are highly sophisticated (4th) and innovative (9th), and the country is rapidly and aggressively harnessing new technologies for productivity improvements (9th). Its excellent educational system (ranked 5th for health and primary education and 6th for its higher education and training) and efficient markets—especially its goods market (6th)—are highly supportive of business activity. And although the country has registered fiscal deficits in recent years (5.0 percent of GDP in 2011), its macroeconomic environment is more stable than that of a number of other advanced economies. Last but not least, the quality of its infrastructure is among the best in the world, reflecting excellent facilities for maritime, air, and railroad transport, ranked 1st, 4th, and 9th, respectively.”

WEF Framework

For this ranking the WEF not only considers the traditional country-specific conditions such as infrastructure and education, but also markets as well as “Business Sophistication and Innovation”.

True or not, BCG makes a number of recommendations that are valuable, such as: Find opportunities in international niches, instead of catering with a broad portfolio of products or services, exclusively for the domestic market. And another one that makes sense: Based on expertise, focus on process orchestration (from design to production to sales and distribution) and not on performing all the activities yourself.

Finally they sketch the agenda for the Dutch government, and frankly I got a little confused here. Of course, good education is important, and of course we must educate scientists to conduct fundamental research. And naturally talent should be encouraged, and for some students we need to accommodate more generic international courses such as those offered by University Colleges. But how is that different from what our education system offers already and why not leave those choices up to young people? They will choose what they want, and what the market needs.

The labor market will become more flexible much faster than the government can take measures to stimulate this. Professionals trade historic rights for autonomy, relevance and networks of peers. Unions are becoming increasingly irrelevant.

The government should just step back. Buy-in from society, changing laws and regulating the labor market? No idea how that would help anyone. De-regulation would help, but if making laws is core business, what can we expect from a government.

Companies can orchestrate processes, but the government cannot orchestrate businesses. Entrepreneurs will.

The most useful recommendation is perhaps: to use more English as business language. The size of our own market is the limiting factor, but now the world becomes easily accessible; many markets are global, technologies enable shorter go-to-market times, and there is no reason why we should address these opportunities as a country, or why companies should be chauvinistic. And we don’t. In our company we have been communicating in English from day one. We have employed people from the US, South Africa, Australia and other countries.  Starting a business in The Netherlands is not difficult, and many of the best-educated and most innovative people are independent, or are willing to accept positions in those companies where their talents are appreciated and developed.

Business Sophistication and Innovation are the key enablers for success in a rapidly changing world: Agility as a strategy. Most large companies have been mainly striving for efficiencies, and cannot adapt or adopt change.

So, that brings us back to Thomas Friedman (The World is Flat) and John Kotter’s article in the Harvard Business Review (“Accelerate“).

This last article has received quite a bit of attention in the industry. Kotter explains why change is unnatural to large hierarchical organizations, and why a better approach, which he calls a dual operating system, is needed to be both agile and efficient.

He proposes the creation of a volunteer (self steering) tribe drawn from people from all corners of the organization, at all levels. These people will form a network that works in parallel with the existing hierarchical structures.

The two entities form a Dual Operating System, each contributing to the vitality and viability of the organization in a different and complementary way. The network’s task is to propose and co-creation the strategies of the future, while the hierarchy continues to operate as efficiently as possible. Exploration and exploitation as two sides to the same coin. Highly aligned, but loosely coupled.

The network strategy will involve no additional costs or overheads, as staff are invited to volunteer their time, knowledge and ideas to contribute to the future of the organization in a capacity that differs from the date-to-day work.

Good companies in the Netherlands and in other countries understand that besides Exploitation Exploration is crucial. That changes are opportunities and not always threats. For years we have been calling this the power of the Network, of Intrapreneurship and of Effectuation – and we have never needed the Government (or BCG) to help us with it.


How to build a business – demotions

March 14, 2013

There has been a lot of publicity lately about demotions and salary cuts for older employees in IT Services companies like Capgemini, whose market value does no longer justify their salaries.

 

Like they did not see that one coming.

 

What is this fuss all about?

 

Of course people are aware that the number of years you are with the company and the number of times you had your salary raised has no correlation to the value you will bring to the clients. Many years with the company? Maybe that has given you insights in the internal organization, or maybe you can manage or coach younger colleagues. That is not very interesting for a client, who wants practical knowledge, results and tangible benefits.

 

 

Especially now, with a much more dynamic and flexible labour market, clients are much more critical and service providers see rates that feel the pressure of the crisis. So how could they have put themselves in this situation? Probably everyone has always been focused on the short-term, because collective labour agreements have dictated that salaries be raised every year, because clients were never the most important stakeholder in companies like this?

In The Netherlands we have almost four hundred collective labour agreements. In only six of them demotion as an instrument is part of the agreement. Unions, whose members are to be found under the older employees, have every intention to keep treating demotions as a taboo.

 

The whole idea of demotion is not new of course. In 2000 the Wetenschappelijke Raad voor het Regeringsbeleid published a report suggesting that “the salary profile and the productivity profile” are getting out of sync. Their solution: more flexibility in salaries, no automatic correlation between age and salary increases, and ultimately demotion.

 

So what is the alternative and how could they have prevented this?

 

First of all, is seems more logical to correlate pay directly to productivity or market value. This can be done by paying basic salaries, plus additional components for both individual market value (measured through billable revenues) and company performance.

 

The question both companies and their employees will have to start asking themselves is how they can influence revenues per employee. Market value is determined by what clients are willing to pay based on the perceived benefits – although most people seem to think rates are determined by smart sales people. The employee feels he has limited influence on his market value. This of course is not true.

It can be increased by development though experience, training and smart matching. The first two are up to the professional. Matching – placing the professional on the assignments where he or she can add most value – is usually done by sales people. Unfortunately usually the match is made based on competences in CV’s and not on Character, Values, Culture and soft skills.

 

Our solution: make groups of professionals responsible for their own success and value. Self Steering teams determine what kind of professional education and training they need, and they are stimulated to build a network of clients. With some commercial training they are able to help the sales people not only with leads and opportunities, but also with better matches for proper rates.

The budget available for salaries and other compensation has a direct correlation with the revenues generated. The team members together determine their  own salaries. Demotion: a concept of the past.