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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This is a continued response to my infrastructure audit: What activities does an innovation infrastructure for open innovation need to support? My prior short answer was that “innovation infrastructure must keep the project’s top goals… top of mind…” Here I provide the promised longer answer and point to both team and organizational activities. For the organizational activities, I focus on the new book, Robert’s Rules of Innovation.

Team Activities:

Gibson and Gibbs give us a summary of the innovation activities needed by innovation teams. They note:

The ability of teams to innovate depends on how well they generate, import, share, interpret, and apply technological and market knowledge, particularly of local markets, economies, and customers. That knowledge is a combination of information, experience, context, interpretation, and reflection (Davenport, De Long, and Beers, 1998). It must be openly shared across contexts through relationships and networks, and there must be confidence in the value of that knowledge for achieving the objectives of the collaboration (Kanter, 1988). Once these requirements have been met, innovation involves dissemination and application of the knowledge, including combining and integrating it to develop novel insights, solutions, processes, or products (Obstfeld, 2005).

Applying the above to an innovation infrastructure suggests that we need to apply systems savvy and weave together the technology, organizational practice, and human motivations. We need systems that allow for the wide part of the innovation funnel: a wide and diverse set of information ideas. At the same time, we need systems that then allow the innovation project to be effectively and efficiently managed. I suspect that a project dashboard (next post) that shows both current project status and has a variety of news and discussion streams is one way to both keep project goals in mind and support the wider ideation activities.

Organizational Activities:

Robert Brands (with Martin Kleinman) recently released Robert’s Rules of Innovation: A 10-Step Program for Corporate Survival. I’ve been following Robert (here and here) for a while. Now I have a one-stop opportunity for his insights. Speaking at the organization level (with specifics also related to teams), he notes the following as “the imperatives to deliver profitable growth through innovation”:

Robert’s Rules of Innovation helps you develop both energy and structure around organizational innovation activities. The presentation provides a broad set of examples: from how to create an innovation culture to a clear discussion of intellectual property issues. I was especially happy to see a discussion around the evidenced based management of innovation:

Observation, measurement, and tracking of NPD results are essential to optimal ROI. Create your baselines first, with initial observations and measurements. Then capture the time to each gate, the time spent inside each gate, and so on. (p. 36)

Building on the idea of a dashboard within our innovation infrastructure, we need ways to track our experiments. Brands asks, “Do you have a set of metrics to serve as an innovation dashboard and track your innovation activities?” (p. 43). These metrics may be general (applicable to all innovation efforts — participate in the Innovation Coach survey here), or they may be specific to the particular effort. We also have to be aware that how we expect an innovation to play out may not be what happens in the wild — thus our observations need to be openended.

Have you had success, or even surprise, in tracking an innovation? What did you do that put you in a position for effective tracking? Do you know of any summaries of surprising innovation outcomes? Comments and links appreciated below.

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I’ve known Peter Weill, co-author of IT Savvy: What Top Executives Must Know to go from Pain to Gain, since our days on the faculty at the Melbourne Business School. I was a visitor during my summers, while Peter and his colleague Marianne Broadbent were full-timers and doing the top research focused on IT business value. Peter is now Chairman of the Center for Information Research at MIT. (I hope to follow up with Marianne soon!)

Of course the title of Weill & Ross’ new book, IT Savvy, jumped out at me given my colleagues’ and my work on Systems Savvy. I find IT Savvy to be a beautiful, more organizational-level, companion to Systems Savvy.

Systems Savvy: The human capability to grasp the possible functions of technology tools and organizational practices and how these might be meshed to best effect. People with SysSavvy understand that technologies and practices are intertwined and they know how to make design adjustments to both the technology and the practice to effectively weave them together. We see SysSavvy as distinct from expertise, but more on that when our data are in…. Systems Savvy is critical to the ability to practice TOP Management.

IT Savvy: “…a characteristic of firms and their managers reflected in the ability to use IT to consistently elevate firm performance. Like savoir faire, IT savvy looks effortless from the outside. But IT-savvy firms distinguish themselves from others by building and using a platform of digitized processes” (p. 23).

My reading of this is that IT Savvy firms have managers who themselves have Systems Savvy. While Systems Savvy can be used beyond strategic information technology — when focused on the strategic issues described by Weill & Ross, the benefits to the organization are clear.

Weill and Ross note that IT Savvy is a rarity:

IT-savvy firms are not necessarily high-tech firms. In our research we have encountered only a small number of IT-savvy firms. Without exception, these firms use IT to “wire in” core transactions, and they use the data from their core transactions to inform decision making. Our list of IT-savvy firms includes highly successful new-age e-businesses such as Amazon, eBay, and Google. But long-established brick-and-mortar firms can also become IT savvy. Take, for example, 7-Eleven Japan, United Parcel Service, and Procter & Gamble (p.24).

Though rare, IT Savvy matters:

Our research found that firms that are above average on both IT savvy and IT spending have margins 20 percent higher than industry average. In contrast, firms with less than average spending and savvy have margins 32 percent lower than their industry (p.121)

What does it take to become IT Savvy? A business transformation that includes:

• Fixing what’s broken about IT – broken accountability and decision making
• Building a digitized platform – a base that provides stable core operations
• Exploiting the platform for profitable growth – leading change and driving value from this new asset

IT Savvy is full of clear examples (many based on their own research) and steps to take. Weill & Ross provide an assessment tool and the ability to compare your own firm with others. I found myself drawn in by their ability to answer questions I’ve had for a while. For example, In February 2008 I wrote a post about Southwest Airlines’, then new, boarding process. I was impressed with the success of Southwest’s complex implementation of the required technology, organization, and people components (showing TOP Management) and noted, “I’d also love to hear how Southwest came to manage the process in the way they did. Do they have this social and technical focus for all of their changes?” IT Savvy gives me the answer: Yes, they do!

The top thirty leaders of the company each sit on two or more strategy teams so they can inform their colleagues of services and needs within their own functional area while learning about the operations of other functional areas. The teams propose enterprise IT projects, which are reviewed by the firm’s executive committee in establishing project priorities. Around 80 percent of Southwest’s technology projects are aligned with one of the strategy teams. pp. 87-89.

I used McAfee’s Enterprise 2.0 book in my Organizational Design course this term. I think IT Savvy is the perfect next step (rubber meeting the road) for those students who continue on to my Managing Technology & Innovation course. My highest praise: IT Savvy was the first professional book to make it to my B&N Nook.

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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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We all understand that talent, especially software talent, is spread world-wide. We all also have a basic understanding that the virtual work form required to harness this global talent is different from face to face work — even with all our fancy technologies and increased experience at working “together apart.” Successful virtual work requires explicit consideration of the technology tools, the organizational practices, and the people involved — T-O-P Management. For Stuart DeSpain of Microsoft, the intertwining is very explicit in the form of: One Team, Many Places.

Stuart is the Principal Program Manager Lead in the Excel for the Mac group at Microsoft. Suzanne Kirkpatrick had referred me to Stuart as “one of the pioneers” when I asked her if she knew of people who practiced TOP Management. I knew Suzanne was right the minute I got on the call with Stuart.

Stuart, like most of the people I talk to who practice TOP Management, has a strong dose of systems savvy. He is able to see all three categories of his technology, organization, and people options, and then can envision how these options could be intertwined for a strong result. But where did he get this system savvy and how did he come to weave the pieces together in practice?

I posed the following to Stuart:
“It would help if you could tell me a story or relate to me an experience you have had in which you learned an important lesson about technology, organizations, and people. Something where you learned something that you wouldn’t find in a book.”

His initial response was that he didn’t think he’d approached the issues systematically. But as he got into his example — the expansion of the Excel for the Mac group — I could see both an explicitness and intentionality around how he thought about the group’s overall design and practice:

[Virtual work is] part of our DNA: For fifteen years the Mac business unit has spanned two locations: Redmond [Microsoft HQ in Washington state] and Silicon Valley [California]. This was not so much a plan, it’s just how it happened. So we’ve built up a lot of comfort with the phone and video conferencing. That [background] helped us think about building additional capacity abroad….

We decided that one of the big centers of talent was Beijing. Great graduates, eager people…. our challenge was to set it up right. I’ve observed that when engineering campuses aren’t located across the street from each other that there’s a desire to treat the [away] campuses as vendors: give them specific tasks, throw them over the wall… “call us if there is an emergency, otherwise, call us when it’s done.”

I didn’t think that a “vendor” approach would work well for us. We really couldn’t just box up Excel as it’s an integral part of a system; it’s part of Office. We wanted to do it right. Initially leaders sat down as a group and set out clear a vision statement as collective: One Team, Many Places. We use this phrase all the time: presentations, meetings… hammering that that is what we are. Not Excel in Redmond and Excel in Beijing. An Excel team across many campuses.

Catchy phrase and the key to effective distributed development success. The phrase acknowledges the role of people in TOP Management. As people we focus on people who are close to us. We have to work, be intentional, to focus on people who are afar.

But Stuart and the Excel team didn’t only think about the social psychology of the situation. They also carefully considered the role of technology tools and organizational practice.

We worked hard on how to translate that high level goal into very specific unifying actions. At every stage — One Team Many Places. How are we going to deliver that no matter the situation? Travel, teleconferences, other tools… We settled on the idea of summits. The idea is to treat it like a trade show. Every six months one side or other would fly — spend a week, like a family reunion, catching up. If there were presentations that one side or other didn’t get to see, we’d show them. We’re walking into our 4th summit next week.

Even more impactful are the one on one or small group interactions. These lead me to see a lot of benefit to sharing a meal or drink or social experience. Summits included a lot of activity around tech problems, but evening social experiences bond the team so they think of themselves as a single tribe. Our pulse for summits is about every six months. But in a team located in the same hallway you’d see people once a week or daily….

To manage the time between the summits they focus on individual travel from both sides and high interaction teleconferencing. Even the teleconferencing is intentional, not just casual. The team is well aware of how one side could dominate the conversation and that there may be compromises due to bandwidth issues, configuration, the need to use the screen to show software features rather than faces, etc. There can be a heavy premium to using video, but they think it’s worth it and design practices to manage the complexity:

We made it clear that it’s worth 15 minutes of set up if that’s what it takes. We have a note taker who scribes the meeting and projects the notes as subtitling. In addition we have an instant messaging conduit — if someone can’t interrupt another way, they can use that.

The note taking and additional instant messaging conduit are their “fall backs.” The team is well aware of the limitations of video conferencing and actively manages the process to get keep the best “pulse” for the team no matter what the communication mode. They actively weave together each of the technology, organization, and people dimensions of their work and interaction.

I asked Stuart how he knew that they needed to focus on One Team, Many Places. Basically, where did he get this systems savvy? A critical experience seems to be the key, as it was for Earl Lawrence, Eugene Lee, and Suzanne Kirkpatrick. Ten years ago he’d worked on a team where his group was in the role of being the smaller, afar portion of a virtual project. The “center of decision” was not at his site. Objectives would be set, then change, then change again. “We were miserable. We were disconnected from our own fate.”

Hindsight has been valuable. On reflection Stuart says he came to understand that the partner company was great, but didn’t yet understand how to work with remote campuses. What his local group thought was an issue of lack of communication given their remote location really had more to do with the youth of the partner firm. They were still in a growth mode that meant objectives would change:

It had nothing to do with geography, just their being a new company. If we’d just talked about it, if we’d gone out for drinks during a visit and just talked about the mission. It we’d had the single conversation it would have changed the dynamic.

So, Stuart says he is always aware of that experience and is sensitive to the fact that the larger portion of the team will always be perceived as “where the good stuff happens,” unless there is intentional effort to be One Team, Many Places.

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