Technology and Organizations

Today was my Zappos Tour.  The Zappos Family seems to be doing everything they can think of to share how they WOW! their customers and employees. They better share since we can’t all go work for them (tidbit from the tour: a lower percentage of applicants get jobs at Zappos than apply and get into Harvard). What’s the secret sauce?  The Zappos Family core values. My translation: Transparency and the drive to do better.

Their transparency takes a variety of forms. I’ve talked about how Zappos live streamed their last all hands’ meeting to the world [9/26/2010 update: Streaming from 1-5pm pacific, click here to sign up for access]. They have an entire piece of the organization, Zappos Insights, focused on sharing via tours, answering questions on-line, and management education. The Delivering Happiness 20 city bus tour is about to begin… and they’re accepting applications for one more person!

Why share your secret sauce?  From Zappos Insights:

It all started when Tony [Hsieh, the CEO] decided to be completely open and transparent about how the Zappos Family does business. So many businesses not only wanted to learn the “what,” they wanted to learn “how” we do what we do. Zappos Insights (ZI) was assembled as our crack commando force team to give you all the tools you need to develop the culture you desire.

Zappos has been being transparent since the beginning.  In Delivering Happiness (Tony Hsieh’s new book), Fred Mossler (part of the founding team) describes how they decided that they should let the vendors have the same information the Zappos buyers had:

I’ll never forget the afternoon I turned my chair around and asked Tony what he thought about giving vendors access to the same information as our buyers.  Traditionally in retail, information is hoarded, kept secret, and used as leverage against the vendors to get more out of them…. But if we created true transparency in our business, not only would they help us, they’d benefit as well.

Not too long after I proposed the idea to Tony, he spun back around and said “Were you thinking about something like this?” He created the beginning of what we now refer to as “the extranet”…. vendors have complete visibility into the business (p. 187).

The reasoning in the book is that the average buyer at Zappos is working with 50 brands, but by being transparent to those brands’ representatives, there are 50 other people helping to run the business.

Ok, that makes business sense.  But what about the value of being transparent with the rest of their secret sauce?  My thinking:

• It’s a good deed and completely in-line with their values.
• It gives Zappos employees the opportunity to share their commitment to the core values with the world — deepening their own commitment.
• Sharing is more than a one-way street.  By sharing Zappos is opening up the possibility that their partners will also share back — and they have extended the definition of partner to include us all.  Think of all the new ideas that can come their way.
• The more we trust each other, the easier it is for all of us to work together.  Trust is a relationship built on being vulnerable. The more often you trust someone and they come through, the more trust you have in that relationship. Zappos is taking the first step in building trusting relationships with all of us.

What can we do in return?

We can’t all go work for them (see note above, though I do hope one of my graduating students will get the chance).  We can do our best to deliver some of our own happiness and build transparency in a way that will make it better for our employees and business partners.  In November I said that transparency was the concept of the quarter.  I’ll go out on a limb and say that transparency is the concept of the decade.

Have you provided transparency to your employees or business partners?  Care to be transparent with the results?  Click on the respond link below and let’s start a conversation.

Many thanks to all the Zappos Family members I met today and have had the chance to talk with over the last few months.  Jon & Robert, special thanks to you for the tour, and Marie for setting it up.

Some of my prior Zappos posts:

• Wow! from the Zappos Fulfillment Center
• Helping Others Develop Systems Savvy: Learning from Zappos, Leadership, and Design
• Delivering Happiness: The Movement
• Tony Hsieh’s New Book: Delivering Happiness
• Zappos Has Insights and I’m in Awe

Today’s guest author is Tracy Allison Altman, who writes the blog, Evidence Soup, about evidence-based management: What it is, what it isn’t, and how to make it happen. Tracy is the founder of Ugly Research, a technology company that has created a presentation format called Tiny Soapbox.  Tracy is the lead-off blogger for an ad hoc series of posts to run here focused on the emergence of true, functional transparency in organizations.  Please follow her blog for a focused view (and some crazy counter examples) of evidence-based management.

Many people inside organizations are now participating more actively: They’re exchanging ideas, making collaborative decisions, and adding transparency to functions that are crucial to innovation and high performance. They’ve got the right corporate culture, processes, and technologies to achieve what I call strong connectedness. Good stuff.

But participation and connectedness aren’t enough. To perform at the highest level, people need to know what works (and what doesn’t). And to do that, they need evidence: To help them make decisions, evaluate new ideas, or design management programs. (What is evidence? It’s information that demonstrates the truth of an assertion. Evidence is what helps people make up their minds – data, statistics, research findings, business intelligence, expert knowledge, observations, facts, and anecdotes.)

Participation without evidence is pseudo-transparency. By connecting people, you get lots of transparency into what they are saying, but you don’t necessarily get transparency into what the evidence says. However, there are some things you can do to get more evidence into people’s hands.

For example. To illustrate the crucial role of evidence in the modern organization, consider a hypothetical enterprise software company that’s releasing a new product (we’ll call them MaxSoft). During the planning stages, product managers gather evidence in the form of market research and customer feedback, and use it to determine which features will go into the new release.

• If MaxSoft is a participative organization that emphasizes the importance of hard evidence, then various stakeholders (marketing, R&D, sales, user groups) will be able to contribute evidence during this phase, and comment on the evidence contributed by others. Conversations and collaborations won’t simply offer opinions, and won’t contain opaque, undocumented references such as “the research proves…” or “we know that…” or “studies have shown….”
• And if the company has an especially sophisticated approach to evidence, participants will be expected to look at research findings, etc. from sources external to MaxSoft, rather than relying only on evidence created internally. For example, evidence about human capital and organizational development, such as how to hire, motivate, and compensate the best people. (This might come from trade publications, academic journals, and industry conferences.)
• Because this is new product development, the MaxSoft product managers must allow room for creativity, risk-taking, inference, and experimentation. The evidence is there to guide them, not to make decisions for them.

After the product launch, more hard evidence becomes available. Sales figures and other performance data provide tangible evidence to assess acceptance of the new product. Business intelligence and analytics are sophisticated ways to pinpoint the most promising customer segments, and will help MaxSoft improve its performance.

There’s qualitative evidence, too. Sales people will begin repeating customer feedback, whether positive or negative. This is where transparency and discipline are crucial. Rather than encouraging ad hoc or free-form participation, MaxSoft can instead gather evidence methodically, making it more representative and therefore more useful to decision-makers. For instance: Use an input form asking specific questions (this works with customers, too). So instead of a sales guy saying “our customers hate feature x-y-z,” MaxSoft will be able to know how many customers really said that. A meaningful enterprise feedback program, combined with social CRM, will generate valuable evidence. To assess customer satisfaction, the team can also use text analytics and sentiment analysis: This qualitative information will supplement sales figures, survey results, and other quantitative evidence.

Later on, when course corrections are needed, people can look for evidence to help them adjust the product positioning, software development, or sales strategy. Again, looking outside MaxSoft – not just inside – will be essential.

So how do you make this happen? Evidence without connectedness is only pseudo-evidence: It does no good if people aren’t aware of it. Here are some suggestions for connecting people to the evidence:

• Set expectations that people will look for, and follow, relevant evidence.
• Develop guidelines for participating with evidence. Identify what types are typically appropriate in various situations, so people look for the right evidence at the right time.
• Use presentation formats and technologies that help people find, interpret, and contribute evidence more easily, regardless of which ‘silo’ they work in. (This is the focus of my work at Ugly Research.)

People + Connectedness + Evidence = Transparent Participation. Without evidence, people can participate in conversations about what really is working, or is likely to work, for their organization. They can come up with theories, make forecasts, estimate risks, and generate new ideas. But eventually, they’ll need some evidence to prove all that up.

Comments or questions? I’m tracy AT evidencesoup DOT com and @EvidenceSoup on Twitter.

Delivering Happiness, Tony Hsieh’s book of the founding and nurturing of Zappos, and the Zappos community, releases today. From Twitter (@Zappos, @dhbook) to the CEO/COO blog, I’ve had the chance to follow the Zappos management story for a while (hiring & on-boarding, marriage to Amazon, starting a movement). With Delivering Happiness, I feel like I’m getting to play a part.

Earlier I reviewed Delivering Happiness. Here I’m focusing on the the Delivering Happiness movement more broadly.

We’re asked on the Delivering Happiness site to:

Join the Delivering Happiness Movement!

One of the reasons why this book was written was to contribute to the existing happiness movements out there, all towards the cause of making the world a better place.

Over the next several months, the site will evolve to become a place for you to read and share your own stories about Delivering Happiness, passion and purpose, in business or in life.

In time, we hope this site will become a place people can play a part and learn about the ongoing movement of delivering happiness to ourselves and one another.

We have the chance to share our “experience and help others make actionable steps towards making positive changes in their lives.” You can read featured stories, or browse contributer stories by industry, region, company size, or core values. I searched on the core value of “Build Open and Honest Relationships With Communication” and was surprised that there weren’t any stories posted in that category yet.

So, I posted my own:

Transparency has been an important management topic (how much, with whom, about what) for decades — but now it has a chance of being more than a topic. I think we’re entering an era where transparency is going mainstream. Technology, organizational practice, and employee expectations are aligning in a powerful new way.

I expect this last point crosses roles and industry. Increased transparency will require management and employees to make adjustments. Increased transparency will require management and employees to make adjustments. As long is the communication lines stay open and we all are open to adjustments, I think we have a chance.

…now to see if my contribution is accepted. Turns out it’s not automatic: “We appreciate your time and generosity in sharing your story. While we won’t be able to publish every story we receive, your feedback means so much to us. Thank you for being a part of the Delivering Happiness movement.” I’ll link here if it goes live on the Delivering Happiness site.

What do you think? Are we in an organizational environment where a movement to more transparent organizations can take place? What evidence do you have that this is true/not true? Please comment below (by June 11, 2010) and I’ll draw a winner for my extra advance copy of Delivering Happiness.

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