Technology and Organizations

Friends have been asking for more information about my Zappos Tour. Here goes:

Anyone can sign-up for a free tour. (See post on Zappos and transparency.) They even run shuttles to help you get there.

My tour started at 9 a.m. this Wed. Checked in and started checking out the lobby:

Zappos Lobby

The lobby also holds the bookshelves where Zappos employees can come and pick-up books on management. No check-out, just use the material to learn. (When asked for a “tour-confession” later that morning, I declared that I would get copies of my book into that bookshelf.)

The lobby has a tiny museum. Here are a pair of shoes like the ones that caused Zappos to be born. Nick Swinmurn couldn’t find these and it gave him the idea to start Shoesite.com in 1999. The switch to Zappos.com came as it’s a better name (my view) and so they wouldn’t be constrained to shoes.

AirWalks

1999 Pitchbook

This is Jon our tour guide. He’s part of the Zappos Insights group and I think is also head of tours. He did an amazing job.

Jon telling us the Zappos history

Heading down the first hallway we saw framed commemorative t-shirts for each major sales goal. On the other side of hallway are caricatures of employees who have hit major goals/successes. A little further down and I spy the tablecloth quilt of brainstorm ideas from the April 2010 all hands’ meeting!

Part of Quilt of Ideas

As we get into the main floors we get our first greeting. Groups sit together, decorate their own area and have a special way of saying hello to people who come to visit. (Zappos now has three buildings in this office park, two occupied at the moment. They’re working on how to keep employees visiting both.)

In the Zappos Lab area we get to see a pair of size 20 shoes.

Very cool Zappos Labcoat

Zappos thought about having an open door policy for the execs. Then they decided it was just easier not to have doors. The execs sit in an area called “Monkey Row.”

Jungle theme for Monkey Row.

Keith Glynn wasn’t in. I would have liked to have said thank you in person for all the help with the fulfillment article.

Keith's seat on Monkey Row

We had a great time visiting with the different groups. In the customer loyalty area (people who take help & order calls), Jon tells us about how each new employee works in the loyalty area, no matter what their ultimate job. Video of him describing the importance of making connections with the customers:

Zappos Customer Loyalty Connections from Terri Griffith on Vimeo.

They keep a big white board down the hall showing call statistics. The goal is great customer service, not number of calls taken or shoes sold. They focus on how quickly calls are answered and how few calls are abandoned. (Zappos Insights offers for-fee courses on their whole process.)

Longest Call (7h 28m) Record Holder

Training is very important at Zappos — across your current job, job development, and personal growth. Three different groups: on-boarding, Pipeline, and Zappos Insights.

Tony the DJ (Desk Jockey for the day), Part of Customer Loyalty training group

In the downstairs hallway there is a bulletin board with pictures of teams that have taken immersion trips to Kentucky and the Fulfillment Center and teams from the Kentucky Fulfillment Center that have come to learn about the Las Vegas operations. The lobby also has a TV running video from the Fulfillment Center. You can tell they work hard to be a single family.

End of my tour included one-on-one time with Jon and then with Robert. I’d paid the extra bit for a “tour plus.” Even though Jon answered a ton of questions during the tour, it was nice to know I could ask all my management-nerd questions at the end. Overall, there was never a rushed moment, never anything we couldn’t ask — and yes, I even got to meet Tony Hsieh.

We’d seen Tony on his way to the Dunk Tank. Turns out they were raising money (and cooling off) back behind the building. Robert kindly took me back there where I could help some people get wet. I introduced myself to Tony, I’m sure gushing about the tour, and then asked for this picture:

Tony Post Dunk

Take the tour! Fly Southwest to get to Vegas and compare the two organizations. Tony’s book, Delivering Happiness, is great; Zappos Insight’s website is great; but there is huge value to seeing and hearing from so many Zappos people.

This is my second post focused on Providence Regional Medical Center of Everett, Washington and how I see their innovations as evidence of organization-wide systems savvy. That is, their efforts show that they understand both technical and organizational opportunities, and that they have the ability to weave them together into innovations — in this case, life saving innovations. I read about Providence in a BusinessWeek article and am thankful to Kim Williams, the Chief Nursing Officer of Providence and Judy Espedal, a Cardiac Critical Care staff nurse, and Dr. James Brevig, Director of Cardiac Surgery, for taking the time to tell me their story. Their examples are valuable because they give hope for healthcare innovation, they show us an exceptional process over a long span of years, and they help us see technology tools beyond computers and email. Here I will look at their approach as an overall practice of systems savvy, in Part 1, I provided a more detailed view of their “single stay” innovation.

Providence Medical Tower

Why am I certain that the Cardiac Surgery team has systems savvy? Because they haven’t made just one transformation — but several — each drawing on both technology and organizational practice to provide improvements in patient care. It is also important to understand that their innovations have been triggered by different forms of observation. In Part 1, it was the nursing staff’s observation of problems associated with how patients transferred to different units during the course of their care. In today’s examples: Blood conservation (less transfused blood is better in many cases) and skilled nursing education – the changes were triggered by statistical analysis suggesting room for improvement. Statistical techniques are themselves technology tools to apply in your organizational setting.

Blood conservation: In 2004 Dr. Brevig began the blood conservation program based on published research. He pushed for changes in surgical technique to reduce blood loss, changes in bypass machine settings to reduce the use of transfused blood, added a blood conservation coordinator to the staff, and worked with the critical care nurses on how to provide blood on outcomes, rather than routine. Follow-on analyses of patient outcomes verify the program’s success. From 2003 to 2007 the transfusion rate has decreased from 43 to 18% and the hospital stay time has been reduced by a half-day.

Skilled nursing education: In 2007 the cardiac surgery unit saw a bump to 12.2% of patients being readmitted to the hospital within 30 days. They used their analysis tools to dig into the issues and found that many of these patients were from skilled nursing facilities. Kim Williams says the team looked to what they could do to help these facilities take on patients after surgery. Providence developed an education program where a cardiac surgeon/critical care nurse team visit the skilled nursing facilities to help educate the staff on how to take care of cardiac surgery patients — teaching them about the common problems associated with readmissions — at no charge to the facility. In 2009 the readmission rate was down to 8.1%.

Once could be a fluke. Twice could be coincidence. Three times (single stay, blood conservation, skilled nursing education) is demonstrated skill with systems savvy. I would stand by this assessment even if there have been failures in the mix (though I’m not aware of any), given that their methods include long-term tracking and adjustments based on data.

This data appears to flow freely via collaboration, attention to communication, and long-term commitment. I asked Dr. Brevig about the distinguishing characteristics of the group – what, in his opinion, enables this team to be distinctively different in terms of their approach? He replied that the collaborative nature of the hospital pushes for buy-in and input across all members of the unit. My interpretation is that when true collaboration occurs in such a complex organization, technology and organization practice opportunities will both end up in the mix. We form teams to get diverse input, and sometimes, as in this case, it actually works.

Judy Espedal also emphasized the time and focus needed, noting that transformations take years and that you have to apply yourself from start to finish. Commitment is more likely given the Providence environment: With collaboration and communication, commitment is more likely.

From buy-in to showing that the innovation works, instituting the new practice, and on-going evaluation… these are conscious, explicit applications of systems savvy. No one functional area is making a decision. No one layer of the organization is making a decision. No one technology or practice stands above the rest. Providence takes a long-term perspective working with their full system of opportunities.

Summary of Providence’s systems savvy:

1. Ability to use different methods for identifying opportunities (not using just one lens).

2. Application of both technology tools and organizational practice to address the opportunity (the basics of systems savvy).

3. Long-term focus and tracked outcomes to suggest further adjustment (savvy, wisdom, is more than a short-term activity).

The doctors, nurses, and staff of Providence Regional Medical Center have a clear ability to see room for improvement and to find ways to do something about it. They draw on physical and analytic technology tools and make adjustments in their organizational practice given the variety of skills available, and they increase skills when needed. They do not try to fix a problem with a single “silver bullet.” The team uses an integrated approach where technology and practice support one another to reach specific goals.

I thank Providence for taking the time to share their story. This is health care reform.

I’ve been following Elance, one of the first (maybe the first?) web-based freelancing markets, since 2000 when it was a start-up of the tech boom. When I saw their booth last week at Web 2.0 Expo, it was a great chance to ask them how things have changed over the last ten years. Think about these particular last ten years: Many of us live and work via the Internet rather than a desk; outsourcing is an assumption for many firms rather than an experiment; Moore’s law is still with us; and Emeritus Prof. Edgar Schein of MIT said in 2004, “..we bascially do not know what the world of tomorrow will really be like, except that it will be different, more complex, more fast-paced, and more culturally diverse” (p. 331).

Elancing is an organizational design tool that should be in all our toolboxes. Elancing, and freelancing in general, provide organizational flexibility — but not just about basic staffing-levels. Companies like Elance provide access to staffing for jobs you haven’t even thought of.

Jaime Mehl of Elance (featured in the video below) opened my eyes to this issue. She says there are “..going to be projects posted that we don’t even know about yet — or [that haven't] even [been] invented yet.”

From a recent Elance report:

While the U.S. Department of Labor reports that the nationwide unemployment rate held steady at 9.7%, the Elance Online Talent Report shows online work continues to grow at a steady pace as its talent pool earned more than $20 million in the first quarter of 2010, surpassing a total of $260 million of work completed to date on Elance. This represents a nearly 40% increase year-over-year and demonstrates that businesses are increasingly turning to online talent, an important and thriving employment segment, to drive their economic recovery. Companies are turning to online talent for mobile development, open source, social media and cloud computing, making these the fastest growing skills in demand on Elance.

Kudos to the managers who take advantage of virtual freelancing. These managers are responding to the added complexity (and cultural diversity according to the Elance Report) that Prof. Schein predicted. They have developed the systems savvy to work with the technologies that enable elancing and have the skills to design organizational practice to take advantage of the flexibility. I welcome examples in the comments below. Have you been able to integrate elancing into your organizational design? What are the technical and organizational skills you feel are most critical to your success?

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More background on Elance from their site: (founded in 1998, following the publication of Malone and Laubacher’s, Dawn of the E-lance Economy.)

Today, Elance is the most widely used application for Services and Contractor Management. More than 200,000 employees are using Elance to find, buy, manage and pay external services and contractors from more than 2,000 suppliers across 50+ services categories, including information technology, consulting, contract and temporary labor, marketing, print, human resources, engineering, maintenance and facilities.

Earlier this week I talked about the value for coordination if you practice your systems savvy explicitly. Explicit systems savvy practice means that you help others clearly see that you are considering your technology and organizational options, and working to weave them together for the best organizational effect. Here we will see the value of being explicit from the perspective of helping others learn from your example. Rhonda Winter, CIO of Indianapolis Motor Speedway shares her experience.

Explicit use of systems savvy is better than tacit use in that others can learn from your example. I had seen a story about Rhonda becoming the first CIO of the Indianapolis Motor Speedway (Indy 500, Brickyard 400). In that story she said, “The key to a good mentor is one who reveals thinking process — someone who thinks out loud” and “Thinking out loud goes both ways…” She noted that the mentoring relationship is illuminating for both parties; her mentees often teach her in turn by reacting to her positions from new perspectives. I knew she would have a great perspective on the explicit use of systems savvy and was thrilled when she agreed to speak with me.

I asked Rhonda how she came to see the value of thinking out loud. Her development of this approach showed systems savvy from the earliest days of her career.

I was managing by the time I was 26. Most other folks were older and more traditional. 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.

As Rhonda told me how she used this approach across a variety of industries I realized depth of her systems savvy. Like many people with this capability she has a breadth of experience (including teaching) that has helped her develop and test her ideas. She started her career at a GM plant doing internal audits after graduating from GM Institute with a degree in industrial administration. Her next career move gave her the chance to see business practice in fast forward:

My plant sold and I went to an entrepreneurial company [greeting cards]. No matter what business you’re in, technology makes a difference. Technology is really woven into the tapestry of our lives and the implementation of technology can impact the bottom line directly. At GM it was more parochial. I wouldn’t know if we made a good decision for 18 months.

[At the] young entrepreneurial firm we found we could grow at 20% a year withtout adding people. The people who were there didn’t know we couldn’t keep up that level of growth. We didn’t have the constraint of how things had always been. We could be scaleable and we as individuals were growing professionally as we took on more responsibility, but not transactions.

This growth was the result of an explicit effort to weave the mentioned tapestry — to clearly use the technology take on organizational effort so the people could continue to grow, be creative, and push the young organization ahead:

[We] had to get the transactions out of the control of the people so they could think. We weren’t bound by a box…. Whatever you can think, you can make it happen with the technology…. If you can design a buisness process there is a set of technology tools to automate that process so you can think of the next entrepreneurial act. When you are involved in routine, you take away the intelligence of the people.

Rhonda Winter’s examples show that a systems savvy approach to management is one where you use technology tools and organizational practice, together, to build the best business practice. This isn’t technology for technology’s sake or technology to dumb down the jobs. This is the explicit, combined use of technology and organizational practice to do great things.

Next up, finding opportunities to practice your systems savvy. Comments below on examples of either low hanging fruit or biggest levers?

I had the great pleasure of meeting Ben Kepes to talk about systems savvy – peoples’ capability for seeing and weaving together technical and organizational opportunities. This was a perfect first meeting: quick understanding of the basics and then exciting new extensions as we talked about how people in different roles may have very different forms of savvy, and the impact this can have in the organization.

Ben is the principal and founder of Diversity Analysis, a consulting company helping companies work with the cloud and business strategy. He works as an industry analyst, consultant, and journalist. I had seen Ben’s Change the System, Not the Technology post and was thrilled to see he was in San Francisco for SuiteCloud2010. A few emails and tweets later, we were talking in the lobby of his hotel.

I asked Ben about his experience with technology, organizations, and people; how these three dimensions are woven together in organizational settings. He talked about the common problem of an organization trying to implement “some whiz bang technology, but it doesn’t work, or the culture doesn’t accept it.” We’ve all seen this silver bullet approach and know it doesn’t work.

Our conversation turned to how the situation could be improved. Ben gave me an example that made a lightbulb go off:

One of my businesses is a manufacturing company. White collar and blue collar. Slowly we’ve been implementing some collaboration technology. Really simple tools: email, calendar, manufacturing planning. It’s interesting to watch our facility managers (blue collar) grasp the stuff. The technology doesn’t work the way they think.

My initial interpretation of Ben’s comment was that the technology doesn’t work the way the blue collar folks think it does, versus, what Ben was actually saying, that the particular technology doesn’t work the way the blue collar folks think! 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.

White collar [management] deploys a tool that they [believe] is entirely obvious. Unfortunately that’s not the way it works for the [blue collar] workers. Difficulty [for the people supporting the implementation] — is there is a blanacing act. To a certain extent the blue collar folks need to use the tools, but you have to balance between requiring them to use and the underlying the cultural aspects.

I asked what would happen if the implementation support team didn’t understand this balancing act: “Huge disconnect, blue collar workers would feel alienated; people deploying the tools, really concerned.” The problems could span the organization even to disenfranchising the people making the purchasing decisions as they see the investment causing conflict.

Ben suggests two solutions:

1. Focus groups — though groupthink could be a problem if the focus groups give the answers that they think you want to hear.
2. Better is to build transorganization groups from lots of different departments from the beginning. “You need some idea about the problem we’re trying to solve. We’re trying to ensure that communication and collaboration can happen across disparate geographical teams. Let’s get them in a room and watch them work toward the goal. Goal driven rather than tool.”

Version 2 seems to me to highlight an understanding that the members of the different departments and organizational roles (blue collar/white collar) will have different ways of understanding the technology tools and organizational practices in play. How these groups think differs by their context and goals. By working together on the task the teams can learn who knows what, learn who needs to know what, and learn how to coordinate in the given setting, with the given tools. (Experts on groups would call this a great way of developing transactive memory, a valuable group capability.)

The different roles have different types of savvy, ways of thinking, that lead them to these different perspectives. Their practical understanding, their wisdom, is set in different contexts. Even if they all have systems savvy around the connections between technology and organizational practice, their systems savvy will be set in their unique context. Only by working together to create a common context, as Ben suggests in the transorganizational group approach, can they gain value from their diverse perspectives and build a system of technology tools and organizational practices that adds value for all.

I haven’t talked about the importance of context in systems savvy and I thank Ben for this enlightening example. I expect to push on this idea more with a focus on how to integrate high, but different, systems savvy capabilities. Looking forward to Ben’s insights on this and other topics.