Technology and Organizations

Windows Phoenix Team at Red Bull Flugtag from Terri Griffith on Vimeo.

John Hagel recently highlighted Aaron Saenz’ Are We Too Plugged In? Distracted vs. Enhanced Minds in his Facebook stream.  John chose this quote from the article: “Prioritize down time. Enhancing your mind sometimes means knowing when to give it a break.” I have evidence to support this summary (even some that’s rigorous): The energy and innovation in evidence at Red Bull Flugtag and academic work on the value of some forms of work interruptions.  My take away is that we need to be realistic and thoughtful about the value of play as we design it into our work practice.

From Saenz’ article:

It is apparent, however, that unplugging from the internet, removing yourself from all distractions, is beneficial. [New York Time columnist Matt Richtel] took a team of scientists on a rafting trip away from all connectivity. Even the skeptics noticed a profound difference in their own behavior after a few days unplugged. We seem to have a finite amount of ‘working memory’ in our brains, removing distractions may allow deeper thoughts and reasoning to use working memory taken up by information overload.

I spend most of my work time thinking about how best to weave technology tools, organizational practice, and human capabilities into a powerful, appropriately balanced, whole.  I call people who have the skill to do this balancing “systems savvy managers” and I’m fortunate to get to highlight their examples in this blog.

Aaron Saenz puts this balancing in the context of down time.  He notes:

As neuroscientists explore the brain we may be able to better design the flow of data to optimize our mental performance. We may find that productivity is maximized when we check emails three times a day, when we only have four windows open on our screens at once, or if we limit texting to times when we’re not driving. Until we have that precision guiding our online behavior, it’s up to each of us to figure out how best to plug into information technology. But take my advice: prioritize down time. Enhancing your mind sometimes means knowing when to give it a break.

Many management scholars would agree.  Jett & George, for example, provide an overview of the role and types of interruptions in the workplace.  Great summary of negative distractions versus helpful breaks that can recharge energy and enable creative ideas to incubate. Mainemelis & Ronson tell us “ideas are born in fields of play” and present a framework discussing the practical relevance of play.  But Karl Weick says it best for me, “Play is important not because it teaches some new skill, but because it takes activities that are already in one’s repertoire and gives one practice in recombining those into novel sets.”

It’s the practice of recombination, a skill critical to innovation, that provides me with the best evidence for the value of play as down time.  There are areas of management research (e.g., work on transactive memory in teams, pdf) that point to the value of teams working on job-specific tasks and with their job-specific teammates.  However, in the case of innovation, I believe that recombination is the job-specific skill and there is benefit to being off-task as noted by Jett & George and Mainemelis & Ronson.

Richtel took scientists rafting to force them into disconnected down time.  How about the team of Microsoft Business Group employees who took part in the Long Beach, CA Red Bull Flugtag? In Flugtag, a team builds a craft that theoretically can fly from a 30’-high pier.  Four pushers and a pilot are allowed on the pier and the whole craft, including pilot, can weigh up to 450lbs. Quoting from one of the pushers, “this is about as Microsoft a project as you could get – you have a bunch of super-smart guys and girls playing with polycarbonate, power tools, and CAD [computer-aided design] programs.”  For two months, eight Microsoft employees spent their free time designing the Phoenix.  In less than 12 seconds, the craft was off the ramp and floating in the water.  Not a record flight, but a valuable experience:

• They got to practice a different kind of innovation than typical in their work
• They got to connect with new people at Microsoft — the team was built by emails to a diverse set of employees
• They got to take a break

Finding systems savvy ways to weave play into your life can be more than just fun — though Flugtag is GREAT fun — it can have innovation value for your organization.

Last night I had the pleasure of introducing John Hagel at a TEDxBayArea event.  He came to talk with us about The Power of Pull, his new book with John Seely Brown and Lang Davison, and the broad-based shifts in our organizational and social environment.

Others have written great general reviews about the book (e.g., here & here) , so I don’t feel guilty about putting a systems savvy filter on my comments.  I see The Power of Pull as emphasizing the need for systems savvy management.  That is, the environmental shifts described in the book demand that you use a solid understanding of available technology tools, organizational practices, and human capabilities to weave together effective organizational and personal action. The Power of Pull also gives us examples of what this weaving might look like.

The Big Shift: Environmental Changes That Demand Systems Savvy Management

Before, the pattern of how technology tools, organizational practice, and people were woven together was generally pushed down from above, and not always effectively. Things have changed.  We have entered a period where important patterns (everything from organizational innovations to personal work strategies) can come from anywhere.  The Power of Pull describes three waves of this Big Shift:

• First wave of the Big Shift: New platforms built on the Internet.  This wave has already arrived.
• Second wave: Focus on flows versus stockpiles of knowledge.  Our feet are wet on this one.  Facebook, Twitter, corporate and employee blogs, customer-built technical support — these are at the forefront of this wave.
• Third wave: Organizational changes that result from the forces of the first two waves.  The emerging business relationships built on communication from throughout organizations are examples of this wave. SAP, for example, opened enough of its technical “secret sauce” to engage a number of partners who could then develop SAP innovations independent of SAP own engineers.  Turns out these efforts are beneficial to all.

The Power of Pull

With these shifts we have the opportunity (need) to “pull” rather than waiting for opportunities to be pushed down from above. We can pull by gaining access to people and resources in ways we never could before, attracting people and resources through our own participation and personal and project branding, and then using these resources to contribute by achieving new outcomes from our own potential.

How we do this is where I see the value of systems savvy management.  How do we decide what pieces of the technology infrastructure to use for our access?  How do we decide how to best build systems that help us attract the right people and resources?  How do we design organizational systems that will help us achieve our goals (working with the people we’ve attracted, the technology systems we have at our disposal, the organizational policies and procedures that distribute benefits to all involved, all with and understanding of our specific context). Systems savvy can help us weave these components together into something that can surf these waves of transformation.

John suggests five steps to start with (my weaving suggestions in italics):

1. Master the strength of weak ties. Use technology tools like LinkedIn or Facebook to access people outside of your usual circle.  Then find or create opportunities to meet face-to-face in ways that support your passion — just sharing coffee is not enough, you need to focus on work-related issues to understand each others’ relative strengths and who else you might want to bring into the network.
2. Grow your personal ecosystem. Use technology tools both inside and outside your organization to find activities that can support your tasks (perhaps a community of practice).  If you don’t find any, build one.  Use technology and organizational practice to strengthen the infrastructure in terms of its focus on learning, building a common language, being a repository of good ideas). Have a system in place for finding new members over time.
3. Choose wisely where you live and spend time to be in the right place at the right time. Use your technology tools to track the right times and places.  Start relationships before you get there and use your tools to maintain the relationships over time.
4. Find environments where people share your passions. For me the critical term is “share.”  Find the environment and then share.  This may be face to face, over the Internet, or a hybrid approach where you meet occasionally.  The conference behaviors John describes are great for keeping your (and others’) enthusiasm high.
5. Join a creation space. My favorite. Be it face to face or virtual, engage with people to create along the lines of your passion.  For me this is finding the opportunity to engage with others who use systems savvy on the job.  By working together we can tackle the bigger problems or use our diversity of background to solve the tricky small ones.

My summary: Use available (or acquirable) technology tools and organizational practices to build your ecosystem and then do something with it.  Play fair — be a producer as well as an acquirer from the social network.  Appreciate that small twists and turns made at the right time result in strong, beautiful, work.

There are no silver or “magic” bullets for organizations.  Google Wave was a single technology bullet.  The introduction of Wave had no organizational practice wrapped around it and little indicating consideration of how people would perceive it.  Organizations are complex systems and betting success on any single dimension is unlikely to work. There was no implementation. There were limited use cases.  Even access was limited until recently, meaning you couldn’t drag others along with you in your experimentation. (Wikipedia version of the history here.)

As I understand Google’s approach with Wave, it was to give Wave to the world as a platform.  Developers were expected build tools around Wave that normal people would use (perhaps as email platforms are built around Intenet email protocols).  I bought into that approach and followed the Google Wave Interest Group so I’d be ready when the developers got it all together.  I tried to get some other generally early adopters to try it out, to no avail, and many others were similarly frustrated.  Conferences were where of I heard the most success as the real-time/rich communication aspects were highlighted in that focused environment.

According to a Google announcement, Google will stop their own development of Wave and may shut down the site after the end of the year. Open source access to some of the capabilities will remain and aspects may be included in other Google products. Jeffrey Mann, writing for Gartner, points out that developers and users may be less likely to spend effort on Google products given the apparent lack of long-haul commitment.  Wave was only fully open to the public as of May 2010 and the cited reason for shutting it down is low user adoption.

The folks at Google are smart.  They’ve done (and do) amazing things. But they do seem to have technology bias that may be getting in their way.  In Kathryn Schulz’ recent interview with Google Research Director Peter Norvig we get some clues:

From a story about the founding of Google:

One of the venture capitalists came to [company founders] Larry [Page] and Sergey [Brin] and said “OK, the first thing you have to decide is, is this company going to be run by sales or by marketing? They said, “We think we’ll take engineering.” He laughed and said, “Oh, you naive college kids, that’s not the way the real world works.” And they said, “Well, we want to try it.” Ten years later, that experiment is still running; engineering is still the center of the company. And it seems like it’s worked.

I’ll argue that this single-minded approach sometimes works because some of Google’s products are so good, or fit into existing systems so well, that they can get away without implementation.  But I think Wave (and perhaps Google’s other visible failures) indicate that they could do better by stepping away from the myth of the silver bullet.  Om Malik says, “I’m not sure Google is capable of understanding people on that level, and that’s the reason why the company strikes out whenever it tries.”  For added success, Google needs to understand people and the organizational systems we all live in.

Google seems to need more systems savvy.  Systems savvy management is the opposite of a silver bullet approach.  Like the woven fibers of a bullet-proof vest, systems savvy management intertwines technology tools, organizational practices, and people for flexible strength.

What did I want from Wave?  I liked the idea of a persistent activity stream that could handle multiple file types.  I saw it as a way of consolidating project documents with their history and discussion.  We have this to a degree with products like Socialtext, and given Socialtext’s careful consideration of the broader issues, I expect they’ll be tracking the Wave experience.

Yes, the fulfillment center.  You don’t think the Zappos family hits its Wow! service standard by drop shipping do you?  (Drop shipping is where orders start with the retailer, but then are sent to the shoe company, that then sends the order to the customer.)  Zappos did start out that way, but drop shipping didn’t give them the kind of control they needed to provide their extreme form of customer service.  Though the team didn’t have experience in complex inventory systems, they jumped in, got their hands dirty, and created a organizational (warehouse facilities & team) and technology (inventory management) system that can hit their service goals while still managing costs.  The iterations they’ve gone through show deep systems savvy driven by their focus on delivering a Wow! experience to their customers, as well as great shoes and other products.

© 2010 Zappos.com, Inc. or its affiliates

I’ve had the chance to correspond with Keith Glynn about how they came to do things the way they do.  Keith is the guy who (story from Zappos CEO Tony Hsieh’s new book, Delivering Happiness) jumped on a plane to Kentucky, without going home pack, to help for a couple of weeks with 3rd-party warehouse issues — and ended up staying for two years.  At the point where Keith and Tony decided they needed to run their own warehouse, Keith went back to San Francisco to pick up his truck.  He and Tony then drove the truck 36-hours non-stop to Kentucky.  This is serious commitment to warehouse operations! Many thanks to Amelia Smith and the “Ask Anything” team at ZapposInsights for the connection.

I asked how Zappos came to run the fulfillment center the way they do.  I’d read that they randomly stocked the shoes as this actually made things easier to find! Keith’s response:*

In a traditional brick and mortar store stocking was done based on Brand, Style, Size and Color.  At Zappos originally there was no intent to stock inventory. As Zappos grew we realized we wanted to own the customer experience, so we started to hold inventory.

We started with a small space in our office. It held a couple thousand pairs of shoes. This consisted of static racking and the shoes were stocked based on what other stores were doing.  Brand, Style Size, Color.  We learned early on that this was a laborious job. You would have to continually shift brands because you did not account for seasonality and future growth.

[In 2000] we moved to a larger warehouse in Willows, CA…. We would receive a shipment, let’s say from Ugg. We would have to unbox the shoes. Lay them out in a large area on the floor based on style, size and color.  Imagine hundreds of shoe-boxes laid out on the floor and the amount of space needed to do this.  And this was only one brand.

Once you had them organized you would have to now figure out how to put them on the racks for storage. In order to get everything to fit you most likely had to shift thousands of shoes to get everything in the proper place. There were other brands on each side which had to be moved as well.  We would review our processes and come up with some small wins as to efficiency but it could cost us in space or other areas.  We thought it would be great to have a system where we did not have to rotate the inventory every day when the shipments came in.  We had the idea but did not have the resources or know how to make it work.

*Keith’s quotes are © 2010 Zappos.com, Inc. or its affiliates

In 2002, they thought they had a solution when warehouse service provider eLogistics offered to take over the warehouse and fulfillment operations.  eLogistics had a warehouse next to the UPS Worldport hub and this would speed up shipping.

When we moved to the Kentucky eLogistics location they did things quite differently. They had large static racks about 25-30 feet high. This probably worked for most of what they were shipping but there was no way it would work for us. We had large volumes of shoes, thousands of SKUs [stock keeping units - product identifiers].  The need for speed and accuracy was extremely important to us as this was our business’ “customer service.”

We had many conversations with UPS on how to improve what they were doing. We even had them install shorter racks so it wouldn’t take as long to put shoes away or pick for shipping. They only wanted to use this space for the faster moving products and felt the need to grow upward since this space was available to them. Imagine having 30’ ceilings and only 6’ racks.  I could see their rationale but it would not work for Zappos. Another challenge was that we were paying them for space. Basically this was a cube that varied in size. Let’s say 1’L x 2’W x18”D. They may have had only one or two shoes in the space based on Brand, Style, Size or Color that we had in inventory. This left a lot of empty space that we were paying for since we paid for the entire cube.

This is a problem that requires serious systems savvy.  At this point they are trying to work with building space, types of storage racks, costs, alliance partners, customer perception, and human heights (note the comment about shorter racks and stocking).

They eventually decide to again have their own warehouse.  According to Delivering Happiness, Keith went shopping for a warehouse and found one only fifteen minutes from Louisville airport. Again, good for shipping, and thus, customer service.  They signed the lease and take the crazy road trip mentioned above in preparation for moving the inventory.

In Delivering Happiness, Tony Hsieh tells the story of how they gave eLogistics a last chance to keep the business.  They designed a competition pitting Zappos’ new warehouse operations against eLogistics’.  For every week that the Zappos system beat eLogistics on shipping and inventory accuracy, 10,000 pairs of shoes would move from the eLogistics warehouse to the new Zappos warehouse.  It took only a month for the Zappos warehouse to win all the inventory into the new Zappos warehouse. “It was a valuable lesson.  We learned that we should never outsource our core competency.  As an e-commerce company, we should have considered warehousing to be our core competency from the beginning” (p. 118-119).

Keith continues:

While receiving the inventory, Tony came up with a quick program that would allow us to scan the UPCs [the “universal product code” you see with a barcode on many products] into a location on a shelf. This allowed us to put any shoe anywhere in the racks and we would be able to find it based on the UPC and the rack location.  We realized that this system would give us a higher density of storage and allow us to store items randomly.

Random storage is good for the people in the warehouse.  They can more easily grab the right box when its randomly stored — think about having to grab the right box if it were stored next to boxes that all were identical except for a color or size designation — random is good for people as the boxes are more distinguishable.

But they needed yet another innovation.  UPCs are not unique to a particular pair of shoes.  That is, the pair of size 7 Chocolate Leather Fitflops that I bought would have the same UPC code as the pair of size 7 Chocolate Leather Fitflops that you bought.  No good for managing inventory or returns.  That and some boxes have multiple UPCs printed on them. The warehouse team wanted a unique identifier for each and every unique box of shoes.

Keith:

Tony initially came up with the LPN (license plate number) system.  He then created some initial coding to test the system… [and] went to our development team and asked them to scale the code.

The LPN turns out to be a excellent example of a systems savvy outcome.  It’s a great way for Zappos to track the location of every item accurately in the warehouse and have a higher density of storage — Technology.  They are able to track specific items through receiving, shipping, and returns (Fun fact: 1 out of every 60 overnight packages shipped by UPS is a Zappos box) and as a result be amazingly responsive to customer service needs (and so be true to the Zappos Family Core Values) — Technology & Organizational Practice. Random storage takes into account human perception — People. It’s the intertwining of these dimensions that makes the LPN so powerful.  All from a number!

The warehouse story also shows what happens when a system isn’t built on systems savvy.  Keith and Tony realized that the technology eLogistics used wasn’t a fit with the Zappos products or the Zappos Core Values; the “pay for space” system wasn’t a fit with the Zappos business model; and as an e-commerce company, they couldn’t outsource warehousing.  All the parts have to be aligned if they are to “deliver Wow through customer service” (the first of their Core Values).

Note that they didn’t come to this approach in one giant leap and it didn’t come for free.  From 1999 to 2010, Zappos has had four different warehouse locations and inventory/shipping systems. They continue to grow their warehouse space in Shepherdsville, Kentucky and have added large carousel storage systems that rotate like the racks you’d see at a dry cleaners.

Systems savvy is built into the  Zappos Family Core Values, even if it isn’t there by name:

1. Deliver WOW Through Service
2. mbrace and Drive Change
3. Create Fun and A Little Weirdness
4. Be Adventurous, Creative, and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships With Communication
7. Build a Positive Team and Family Spirit
8. Do More With Less
9. Be Passionate and Determined
10. Be Humble

This list of values is a well woven together platform for how to achieve your organizational goals, create one of Fortune’s “100 Best Companies to Work For,” and hit a $1 billion in gross merchandise sales goal — ahead of schedule (p. 210 of Delivering Happiness).  Zappos openness to learning, change, and communication means to me that they are constantly considering how things (technology tools, organizational practice, and people) might work together in new and different ways to better deliver Wow! experiences to their customers, employees, vendors, and everyone who interacts with Zappos.

More on this soon.  I’m taking the Zappos “Tour Plus” in August.  What questions would you like me to ask? Please add as a comment below.

If you’re a subscriber to this blog (and I hope you are), you know I’m intrigued by Zappos’ organizational design and overall management strategies. I find myself visiting three different Zappos sites regularly:

• ZapposInsights.com – site and web community around what makes Zappos unique and how Zappos does business. They offer free open tours, formal management training and the for-fee membership site even has a section called “Ask Anything.”
• DeliveringHappinessBook.com – site and web community around the ideas in Zappos CEO Tony Hsieh’s book, Delivering Happiness. They’re sharing and they want us to share too: “Our higher purpose? Delivering happiness to the world. Make it yours too and help spread the word to family, friends and colleagues alike!”
• Zappos.com (a girl does need shoes you know!)

What’s so intriguing to me is that through these sites and organizational activities Zappos seems to have found a way to help others develop culture savvy. Culture savvy, like systems savvy, is a complex area of organizational expertise that is often learned by experience and challenge, not by just by reading or hearing a lecture (for background, see Drinking Beer and Understanding Culture Embodiment). Zappos is offering us a way to learn their approach to organizational culture through a variety of rich experiences and dialogue. (For more on the value of dialogue, see Ed Schein’s article.)

Rich experiences, I believe, are at the heart of helping others learn any complex systems skills. Additional evidence? Consider leadership and design.

Leadership savvy is another complex area that is best taught through modeling, learning by doing, and reflection. Jim Kouzes and Barry Posner write in the 4th edition of The Leadership Challenge that leadership, like any skill, “can be strengthened, honed, and enhanced, given the motivation and desire, along with practice and feedback, role models, and coaching” p. 340. In the related instructors’ guide they continue:

In our own studies, as well as others by the Center for Creative Leadership and corporations like Honeywell, three major opportunities for learning to lead emerge: (a) trial and error, (b) observation of others, and (c) formal education and training. pp. ix-x.

From a design perspective, Dan Saffer, writing for the Adaptive Path blog similarly pushes for an active role,

I was taught that design has three components: thinking, making, and doing. (Doing is the synthesis, presentation, and evaluation of a design; the bridge between thinking and making.)…

Details often get overlooked in just “thinking” projects, as do constraints. Constraints are somehow less solid in the world of thought than they are in the world of making.

So, how do we help others learn systems savvy? By using the same ideas that Zappos, Kouszes, Posner, and Saffer offer for spreading other complex skills: Provide opportunities to try (and fail), observe others, and get formal training when it’s appropriate. We all have to get our hands dirty if we’re going to do this well.

Background examples from prior posts:

Stewart Mader and Sharing Systems Savvy – “Don’t let the words get in the way…. That is, don’t let the terms (e.g., wiki, open innovation) put a barrier between you and the people you’re helping to understand systems savvy. Focus on the work.”

Gaining Value from Blue & White Collar Systems Savvy – Ben Kepes – Value from diverse groups working together, “The mental models held by people in the two roles are different. One is not better or more sophisticated than the other, but they are different.”

Jennifer Kenny – Helping Others Become TOP Managers — “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.”

Transformation Through Demonstration: Megan Gailey and the Implementation of Meeting Support — “I tend to focus on the people who are the willing participants… the early adopters. Then through their demonstration and behavior change, show success. [The success] sways the resistors and the people on the fence. Get the earlier adoptors excited and the fence people come along.”

Don’t Hide Your Systems Savvy Practices – “Explicit use of systems savvy is better than tacit use because it allows others to coordinate. Think about the benefits gained in a kick-off project meeting if the group comes to a set of explicit decisions about where files will be stored, how sign-offs will be managed, and the best strategies for communicating.”

Think Out Loud With Me – Rhonda Winter, CIO of Indianapolis Motor Speedway — “If you say, “can you think out loud with me” then even the most bashful will enter the conversation. We may not make the decisions that day, but we get the conversation started.

[Thinking out loud is a] great teaching tool, helps make clear that it’s ok to make a mistake – creates an environment where you can play with the ideas out loud; first idea may not be best, but it’s the conversation starter.”