Technology and Organizations

Dan and Chip Heath, authors of Made to Stick, have a new book “to help you change things,” Switch. They build off University of Virginia psychologist Jonathan Haidt’s The Happiness Hypothesis with an analogy based on an elephant (our emotional side) and the elephant’s rider (our rational side). The rider on top tries to direct the elephant, but a 6-ton elephant can go wherever it wants. People may rationally want to change, but their emotions, habits, and instincts may have control. They’ve filled the book with clear examples (that stick!) and extend the elephant/rider analogy to note that while we can direct the rider and motivate the elephant, we also need to “shape the path” the rider and elephant follow by adjusting situations to provide clarity around the change. This acknowledgment of the need to manage all three factors at once is a demonstration of their systems savvy — their ability to weave together three separate strands to create a stronger and more effective outcome.

I generally talk about systems savvy in terms of technology tools, organization practice, and basic human attributes. Systems savvy is the vision to acknowledge options across each of a situation’s technology, organization, and people — and the wisdom to weave them together into new and powerful outcomes. Switch doesn’t speak to the general capability of systems savvy in these terms, but the Heath brothers provide us with many examples of people who are successful at influencing change because they have found a way to do this essential weaving. They provide us with a deeper understanding of how change is perceived and the related human motivations.

We’re building a powerful library: Switch helps us understand the people strand while the previously reviewed IT Savvy ties together technology and organizational practice. Do you have other suggestions for systems savvy reading?

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Not all TOP Management stories start with a success. Technology projects can develop a life of their own, sometimes to the detriment of what is best for the organization and the individual teams involved. Brett Colbert, now VP of Enterprise Architecture at McAfee, gave me a great example from his early management career at Cisco. This is a story of how it is much more difficult to kill a project than to make the adoption decision — but when the killing is done well it can demonstrate an example of TOP Management by all involved. This is a story of how people and organization/management are tied to the heart of technology development, death, and resurrection — A Phoenix Project

Brett’s story:

A mentor suggested that Brett take on a new assignment: eContact. The project would give him a bigger role and broad visibility given the diversity of sub-teams involved.

I started doing some analysis and saw that pretty much every category related to general project management was broken or in the red: Quality component that’s being managed – No; Code being saved with source control – No; Right level of exec buy-in or change management – No. After about 2 months I went back to Andy [the mentor and overall manager] and said, “Each individual problem is solvable, but altogether it’s not. It’s a death march and we’re way off course.” Andy replied, “I was afraid you were going to say that, I agree with you. A rare occurrence, but we have to stop.”

They were 20 Million USD into this project at the time.

If you were talk to each person individually they’d say yes, kill it. But when you brought people together there was this strong desire to meet the culture of stretch goals that’s embedded at Cisco. People could not resist but to say, “We can fix anything! We can do anything!”

Even the most rational people, when you tried to put the breaks on things, pushed back — even though deep down they knew it wasn’t fixable. It was a big epiphany for me in terms of the desire for people to be able to prove or stay on course with these incredible stretch goals. They lose the ability to judge what’s reasonable, what’s impossible, what’s stretch [doable, but challenging].

Generally when management scholars talk about “escalation of commitment” it’s to say that tons of good money was thrown after bad (think Denver Airport baggage handling system). Not so in this case, though it wasn’t easy:

It took eight weeks to put the breaks on it… with a lot of analysis. Went back through the criteria that make a good project. This is where it got politically challenging. You want to be honest of how bad things are but you don’t want to focus on the people. The people are trying their hardest. You don’t want them to feel bad. We built a lot of collateral around why we were red in so many places. We’d over stretched as a company, group, team.

What was more important than finding a scapegoat was doing a reset. Tried to separate the people from the failure…. They were busting their butts, giving up holidays. Generally the team was doing what it was being asked.

Next came a request to present at the World-Wide IT Managers’ Conference. Brett’s boss said, “This is such an awesome example of success.” Brett replied, “I just killed a 20 million dollar project….” Boss, “Get up in front of 500 IT managers and tell the story of how you killed this thing.” Brett gave presentation and says his friends still laugh about it. Remember, this is at the beginning of Brett’s career. The amount of support from management was critical. They said, “you never learn when things are going great.” Smart management.

Ironically, a year later, after rebuilding their reputation, the same team went after the same problems — structured it right from the beginning. Focused on all of the lessons learned: starting off with change management, managing scope, exec support. Hugely successful. They will harken back that those were some of the greatest days: On time delivery, camaraderie, hitting stretch goals.

I asked Brett, “Given that most escalation of commitment stories end badly, what would you say made this one different?” His answer was the aforementioned management support and the follow-on:

Ultimately jumping back into the same problem and solving it: Having the right people, right roles, right player position…. You may want so badly to solve problem X, team may want to take it on, the business is there — but if you don’t have the right people stop until you do…. If you don’t have an org change management plan, it really isn’t the individual contributor’s problem. If you haven’t managed scope, it really isn’t the individual contributor’s problem.

I opened by saying that this was an example of TOP Management by all involved. It was a technology project with all the risks of technology projects everywhere: scope creep, complexity, etc. What made it TOP Management was the clear understanding that the problems weren’t about the technology. The problems were about the goals (organizational issues) and extreme motivation and commitment (peoples’ responses to the goals). Killing the project required being about to see all three aspects (technology, organization, and people) at once — seeing that there was no hope given the three aspects as they stood — and making a tough choice. Resurrecting the project was also TOP Management. The basic technology goal was still sound. Managing the organization and people issues with the lessons learned from the first go-round tied the process together.

More on Escalation of Commitment:

• Barry Staw: Knee Deep in the Big Muddy (pdf)
• Mark Keil & colleagues: Why Software Projects Escalate (pdf)

I’m always looking for examples of success or failure that demonstrate the tight ties between technology, organization, and people.  Contact me directly or post a comment below — I’d love to hear your story.

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Jennifer Kenny, CEO and co-founder of Social Thought Matters, is a geologist by training.  She notes that geology is systems thinking at its most fundamental.  She’s spent the last 25 years integrating technology and business and this systems background has been critical to her success.   I had the pleasure of interviewing Jennifer this week about her experiences.  (Thanks for the connection, Queene!) We focused on how to help others understand and practice systems thinking, or in my words, how do you help them become TOP Managers – managers able to weave technology, organizations, and people together for effective solutions?Jennifer made it very clear that people don’t learn TOP Management via training.  Training is typically about information people are supposed to learn – you know some information and they’re supposed to learn it.  Systems thinking is better demonstrated through helping people “mobilize their own ideas.”

I asked Jennifer if she could give me an example of how you would do this in a real work situation.

Her story:

A friend had taken a new job managing a several-hundred person loan processing support group at a bank. Things weren’t going well with the workflow and the group was working to implement a multi-million dollar workflow technology to solve the problem.  The project was having a rough time and her friend was frustrated with their progress.  She asked Jennifer’s team to take a look as consultants.

Jennifer asked, “What would happen if the people were involved?” Given the friend wasn’t happy with the current work the loan processing group was doing, she wasn’t sure that participation would have much to offer — but ok, give it a shot.  They put a hold on the technology implementation work and instead looked at human cooordination.  About 10% of the group were asked (and agreed) to attend workshops on how to design their own processes.  Note that these were workshops about taking different perspectives (loan processors’, salespeoples’) and learning a new process (how do you learn about the different organizational roles and the related performance goals that people in the different roles work with?). This was not training focused in learning facts/information/details that someone else had prepared.

Next step was for the full group to meet with the Senior VP of the group and Jennifer’s team.  The SVP was clear: unanimous support was needed to move ahead, or the consultants would be out and they’d go back to the earlier approach. …let the tension build…  Did the subgroup that went through the workshops really believe in the new approach?  Was the subgroup able to convey the same enthusiasm to the full group of several hundred?

Unanimous approval.  The participative approach was rolled out to the full group and later on to three other groups.  They kept the hold on the technology and ended up with a minor modification to what they already had.  ”350 people came back to us and said ‘I’m enjoying work I’ve always hated before.’”

Helping this group practice TOP Management wasn’t about training — Jennifer says these workshops were,

joint design sessions… We knew that they knew a 1000 times more about their actual work than we did — training wouldn’t make sense.  Instead, we helped them tap into their knowledge using the common language about their work — mobilization of their own ideas.  Joint design, metrics and analysis.  Collaboration and co-invention is what’s going on. We were precipitating versus leading…  Doing systems work is being able to listen.  Deep listening.

Deep listening was being demonstrated and supported.

[We showed that] the way that they’ve been trained to do was input-process-output.  They had no understanding of the bigger game they were playing in.  We [helped them see] that was how their work had been designed and that was why the handoffs were problematic, no context.

For example, the loan processing group hadn’t understood that the sales part of the business had quotas.  Only by listening did this part of the context become clear.

We also brought the sales folks into design with them. Up to then sales had been the people who screamed when they didn’t get what they wanted.  Next was to show all of them working across an entire system, rather than each person as a single cog.  Then they saw context upon context and why it all connected.  Once people begin to get context, they start looking for it themselves. Gave them the bigger picture.

The results speak for themselves (as measured by the bank’s own customer satisfaction team):

• 13% increase in customer satisfaction in a 3-month period
• 4% increase in responsiveness
• 10% improvement in quality of service for performance in documentation, credit and collateral

This was the first interview where I focused on how you teach others to be TOP Managers.  In prior discussions (here, here, & here) I’ve been more concerned about specific examples, or how people learned to become TOP Managers themselves (here & here).  My take away from Jennifer’s story is that you don’t train people to be TOP Managers — you help them develop their own systems savvy by suggesting new lenses for seeing their own role, the situations of the people around them, how the policies and practices of their organization link to their role and those of others, and how technology can be intertwined — or not.  Please comment below with strategies you’ve practiced or seen for helping others develop the systems savvy needed for TOP Management.

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Transparency is the concept of the quarter. Transparency has always been an important management topic (how much, with whom, about what). But I think we’re entering an era where transparency may have a chance of going mainstream. Three big triggers for me:

• Comments by Eugene Lee suggesting that he’s seeing greater transparency in a variety of firms
• Nilofer Merchant’s new book The New How: Creating Business Solutions through Collaborative Strategy
• Series of comments at the Enterprise 2.0 conference this week — Social media creates transparency, often whether you want it or not — so you better manage it

I covered Eugene’s comments last week. Here I’ll focus on The New How and the E2.0 conference.

The New How: Creating Business Solutions through Collaborative Strategy

At Santa Clara University’s Leavey School of Business (where I teach Organizational Design and Technology & Innovation Management), we have the pleasure of Nilofer Merchant being a member of our advisory board, and an alum. I’ve had a chance to talk with Nilofer a time or two and she was kind enough to forward me a early copy of her new book.

In The New How, she provides clear examples (often personal) of the flaws of top-down thinking and how this approach threatens strategy development and implementation. Her “Air Sandwich” is a clear and memorable way to describe the problem (p. 13):

An Air Sandwich is, in effect, a strategy that has clear vision and future direction on the top layer, day-to-day action on the bottom, and virtually nothing in the middle — no meaty key decisions that connect the two layers, no rich chewy center filling to align the new direction with new actions within the company.

Transparency is one aspect of modern management that can help us find the rich chewy center.

Everyone is better off when they know why decisions are made with as much accuracy as possible. It gives them an understanding of what matters and provides information on which to base the trade-offs constantly being made at every level. It also boosts buy-in and energy from the organization. When reasons behind decisions are not shared, the decisions can seem arbitrary and possibly self-serving. That is, they may seem like they are made for the good of the decision makers, rather than the good of the organization. (p.63)

Foundations of the “New How”:

• Distribute decision making
• Demand good followership
• Reward co-ownership
• Set clear goals and then improvise
• Be students of the game: “We… know that learning organizations get better over time at innovation, disruptive change management, and operational excellence” (p. 218).

While some of these ideas have been around, this presentation and our current environment may contain the levers that finally make it happen on a grand scale.

The environment is creating a fertile ground for the ideas of The New How. In prior times management had to decide to practice transparency (for example, Open Book Management), but with blogging/social media/greater access to data, employees can create some of their own transparency. This dynamic exists across organizations, not just Silicon Valley regulars. For example, the Enterprise 2.0 session on “Is E2.0 a Crock?” (conclusion is that it’s not) included:

• Jamie Pappas, Manager, Social Media Strategy, EMC
• Bryce Williams, Social Media Consultant, Eli Lilly
• Megan Murray, Community Manager/Project Coordinator, Booz Allen Hamilton
• Claire Flanagan, Senior Manager, KM and Enterprise Social Collaboration, CSC
• Bruce Galinsky, Director IT, Metlife
• Greg Lowe, Social Media Architect/Program Manager, Alcatel-Lucent

This is going to happen. “Culture can lead, so you better find tech ways that work for company goals” (Bryce Williams, Eli Lilly). Management should see transparency as an opportunity rather than a challenge. A well informed organization is better able to perform on every level.

Want more data? Here’s a start: Mendelson (2000) Organizational architecture and success in the information technology industry, Management Science. Using data from 63 business units during 1994-1995, Mendelson looks at how the following dimensions of what he calls “Organizational IQ” impact performance (also provides excellent references to foundational books/article around participation and transparency) excerpts from article:

• Promotion of widespread awareness of new information from the organization’s external environment, including information about markets, new technologies, and changes in customer tastes.
• Co-location of decision rights with the pertinent knowledge, which often implies considerable decentralization of decision authority to lower level managers or front-line employees. This, in turn, requires an incentive system that aligns individual and organizational objectives.
• Practices, technologies, and systems that improve the diffusion of knowledge and information within the organization.
• Reduction of complexity and information overload by focusing on fewer activities.
• Reliance on a network of partners for performing noncore activities, following the same principles that define the intraorganizational IA architecture, but applying them beyond organizational boundaries, across the entire network.

Want more examples?

• Military: “Power to the Edge” (pdf of book) notes that transparency and decision rights being located at the “edge” (where the work happens) are necessary in today’s environments.
• Small Business: Laura Lorber describes the benefits of “An Open Book” in a Feb Wall Street Journal article.

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Many management books (for example, The First 90 Days, p. 45) suggest that you have structured interviews with your direct reports when you first join a new organization. Eugene Lee followed this advice when he become CEO 2.0 (that’s how Ross Mayfield, one of Socialtext’s founders, advertised the job on LinkedIn) for the collaboration/Enterprise 2.0 platform provider Socialtext. As suggested, he wrote down a set of questions like: how long have you been here, what are you most proud of in your career so far, what will you be most proud of having done when you leave Socialtext?

What’s unique is how this process evolved. He’d scheduled these one-on-one meetings for 30 minutes each and knew that wasn’t much time for people to be thoughtful about their responses — so he posted the list of questions to the company wiki. (A wiki is a website where everyone in the company can post and edit information – and one of Socialtext’s main products.) The idea was to give people a chance to think about the questions before their face-to-face meetings. Eugene didn’t anticipate that given the company’s culture and comfort with social software, like this wiki, that people would just start answering — on the wiki for all to see.

Part of this picture is that Eugene hadn’t come from companies with this kind of transparency. In fact, few companies today are this comfortable with public posts and discussions, and I’m guessing that Cisco and Adobe weren’t during Eugene’s tenure. This public response was a surprise to Eugene: unanticipated, and somewhat unnerving (though he notes that for the Socialtext crew, they wouldn’t have thought of doing it any other way). But here’s the key: Eugene has systems savvy and quickly saw the value of the approach. He didn’t immediately post a recall. He certainly didn’t delete the posts. Instead, he added his own responses.

The wiki posts ended up creating the vision statement (especially the question about what will you be most proud of having done when you leave). There was even a dynamic in that as people were contributing their thoughts, others were “gardening the wiki” — making it a well designed document.

The whole process become something Eugene described as “Getting to Know You 2.0.” Sounds like a beautiful Silicon Valley leadership story. At the time, Eugene notes that it actually felt:

So scary. I’d lost control of the process. How powerful to let that control go…. When you hit a tough spot and need people to do something hard… the trust is enormous… and we make software that helps that.

As a result of the process he was able to prepare a presentation covering: memes, themes, dreams, & seams… what was common, what the aspirations were, and where there were gaps. Getting to Know You 2.0 was a success. It took a combination of technology (the Socialtext platform), organization (a way of working that assumed openness and transparency), and people dimensions (Eugene being accepting of risk, even at this critical juncture with the new company). TOP Management.

This was 2007. Jump forward to the middle of 2009. Eugene got a copy of the book Transparency: How Leaders Create a Culture of Candor. This book, and his Getting to Know You 2.0 story have become part of how he presents Socialtext’s products to other senior leaders. …and sometimes the transition is stunning.

He recalled a recent sales call with a C-level executive at a large, traditional (the kind of place where the conference room’s mahogany cabinets had mahogany handles), East Coast organization. Some departments in the organization had been using Socialtext social software products and now the question was whether the platform should be offered to the whole company. The meeting was expected to be a private one with the exec and Eugene. Instead, the exec’s staff crashed the meeting and were joined by a top IT exec. Possibly rough meeting, and started out very quietly. The C-level didn’t say a word for 40 minutes, but the end of the presentation he says, “I think we should do this.” The IT exec posed concerns and implied that while this might be good for a California company… “what problem will it solve? Implementations fail when there isn’t a problem being solved.” Pause. The C-level then says “Employee engagement, cross department collaboration.” Maybe this firm’s conference rooms were formal, but this gentleman understood the value of transparency in modern organizations.

Eugene says this story has played out similarly in multiple firms. This transition to transparency is happening and technology is helping to manage the process. He sees this as a leadership issue, the technology is only enabling the interactions. Leaders need to consider:

What does it mean to you, the leader, in terms of not killing transparency? How open book is appropriate? How cross functionally transparent do you really want the culture to be?

Technology, organizations, and people — designed together — TOP Management.

Additional material from my interview with Eugene:
Budget as a Trigger for TOP Management: Examples from Eugene Lee of Socialtext

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