Newspapers and Their Changing Environment

A lot of people are complaining that newspapers are dieing.  That's not completely true.  Newspapers with an advertising based revenue model are dieing.  Companies that didn't depend upon that model are not.  Consumer Reports, Stratfor and Seeking Alpha didn't choose to follow that model, and they are doing fine.

What happened is that newspapers grew up in a particular business environment, did well and expanded.  A couple things changed that are contributing to their problems.  The economic environment changed and newspapers were/are too big to be supported by their revenue model.  This economic environment changed necessitates a business change that newspapers do not want to accept.  If newspapers were a quarter their current size, their revenue model would be fine.  For people running newspapers, that is not an acceptable solution.

The Roman's had a saying, "Times change, we change with them."  Until people running Newspapers are willing to change, they will continue to bleed a slow death.  More interestingly, other organizations, the Stratfor's, the Seeking Alpha's etc. will emerge and offer a better product with a sustainable business model that is aligned with the new economic environment.

Alignment in IT Management

Glenn Whitfield over at his excellent blog IT Business Alignment ask an interesting question CIO, 

No Leader Wanted. While I agree with a lot of what Glenn says, here is asking about alignment and 

alignment is a management issue. Is everybody going in the same direction? Leaders, by definition, do not go in the same direction as others.

My point isn’t to get into an argument about semantics, but one of direction. Company ‘leaders’ need a little management. When there are good times and everyone is flush with cash, it is easier to let people go in their own direction and not worry about the trade offs. We have had almost 25 years where that has been true and discussions were about possibilities that could recover any cost. That time is gone.

Now, discussions will be about trade offs. How much is something going to cost, where is the money going to come from and what has to be cut to pay for the project we go forward with. Many projects (over 60%) need to be cut. Considerations will revolve around what are the core initiatives that will move the business forward as a successful, ongoing enterprise. Those are the ones that will be funded. That will drive alignment.

Cutting 60% of the projects means people will not be spread so thin and the projects will actually succeed. Successful people will be judged on their ability to make projects succeed, not the possibilities they promise. Also, it means that many of the people with their own agendas will be corralled. Finances will dictate that there will be much more alignment than there is today.

Understanding what’s of core importance to the business and how to deliver it efficiently and effectively will be the calling card of the successful CIO. The successful executive CIO will talk about ROI and NPV in analyzing which project go forward aligned with the business.  ROI and how project will be paid for and pay for itself are what need to be discussed. That is what leads to alignment. 

Are You a Seeker or a Dwarf?

This is a copy of the blog post I did for the Silicon Valley "Art of Project Management" Blog.

When Project Managers and others work on projects, they often consider themselves enlightened seekers.  People seeking new and better ways to do things.  They are often frustrated by those not eagerly embracing the changes.  Let's call them dwarfs; people who are not on a journey, but who have the knowledge and almost magical power to make a project succeed or fail.  Dwarfs are often more critical to the success of the project than the seeker or anyone else might expect.  I contend that to succeed, you have to be both.  Sometimes you need seekers and sometimes you need dwarfs.

Now, this is not the terminology of PMI or Lean or Agile or PRINCE2.  It is older wisdom, articulated by the first Project Management advisors, the Brothers Grimm in 1819.  In The Water of Life, they articulated how to achieve project success under the most trying of circumstances.  

A Brief Retelling of The Water of Life

The king (CEO) was troubled.  A great malaise gripped the land and infected him.  New directions and ideas were needed, but who could help?  He called his three princes (favorite PMs) together to look for solutions.  The kingdom's future depended upon the success of the undertaking.  The company needed The Water of Life to survive.

The first prince stepped forward with a plan that could be implemented quickly.  It would be costly, but he was bringing in the best and brightest to assist on the new strategy.  He had detailed project schedules, maps to success and visionary PowerPoints.  The king was hesitant, but blessed the undertaking and sent him forth.

The prince and his beautifully dressed and highly compensated, expert consultants set out, executing his plan "Seeking The Water of Life".  As they set off, they came upon a dwarf who asked what the commotion was all about?  The prince responded that they were on a mission to save the land, to seek the Water of Life.  You are either with us or against us.  The dwarf mumbled something about daily requirements, but the seekers were so enthralled with visions of The Water of Life, that they couldn't waste their time.  There were no tasks for taking on the dwarf's daily dawdle.  So they hurried off, seeking The Water of Life.

The dwarf, frustrated at their not understanding the importance of his daily dawdle watched them ride into blind canyon.  This canyon had enticing valleys, but while the valleys looked promising and the road out of the canyon closed in behind them.  Trapped, with the canyon walls closing in around them, the seekers couldn't even get cell phone reception, as the mountains blocked the signals and they were never heard from again.

The second son had used the time while his older brother was away to plot his own path to the kingship and had put together his plan for saving the kingdom.  This he presented to the king.  The prince's arguments were good and he promised to be agile and communicate constantly to the king.  

He was given a smaller budget and tighter deadlines as he set off to seek The Water of Life.  Due to his constant communications with his customer's, who were paying for his endeavor, he barely noticed the dwarf as he rushed past.  The dwarf called out, but watched him continuously communicate himself into the quicksand.  Hopelessly trapped and sinking, the prince yelled frantically at the dwarf, but the dwarf, turning back to his daily dawdle, chuckled as the high and mighty sunk beneath him.

The third son, who hadn't prepared plans because he was busy with the details of running the kingdom, came forward and said he would seek The Water of Life.  The king was skeptical.  There was no vision. There were no schedules.  There was no map to the water.  The son resonded that no one knew where The Water of Life was, so how could they map a path there?  

The third son set out and when he came upon the dwarf, the dwarf asked where he was going.  The son said he was seeking The Water of Life and would welcome any help the dwarf could give.  The dwarf, touched that someone recognized and took the time to listen to him, replied that he knew where the water of life flowed.  The prince asked if he could help him get there?  Yes, responded the dwarf.  The journey is long, but as you have taken the time to ask and listen to me, I will help you get the Water of Life.  And with the dwarf's help, the son set out on a different path.  One no one else would have taken, seeking the water of life.

I urge you to read the der Brüder Grimm for the details of how the journey turned out.   There are riches, beautiful princesses and all the rewards a seeker could hope for.  But before you go, please think about when you are a seeker and when you are a dwarf?

Are Corporate Executives Clueless?

Pawel Brodzinski brings up some excellent points in his blog about why top management often seems disconnected from what's happening in their businesses.  While he might be right that they are disconnected, I don't believe they are as disconnected as some think and that there are good reasons they never seem to be available.

In my experience, executives have very time constrained schedules and rarely ever know more about the details of what is happening than the people working for them. This is not a cut on executives, it is reality. Let me explain why I say this.

When an someone comes into a company, they are brought in to do a particular thing. Maybe it's technical, maybe its not, but at some level, junior employees are brought in to lay bricks. Determining who's productive and who's not is as easy as counting the number of bricks they lay.

Our brick layer is productive and get's promoted. He's now managing 10 brick layers. It's still very easy to determine if he's productive. But now, let's promote him one more time. He's now managing 10 people who are in turn managing 10 other people. You can see it's a little more difficult to judge productivity, but his job is still focused around laying bricks. He is in middle management and is still responsible to know about brick laying. But let's promote him one more time.

Now our man is an executive. One of his departments lays bricks, but he's overseeing 5 other departments. One digs moats, another mines stones for the bricks, another ships the bricks, another handles the international taxes involved in importing bricks and exporting castles and then there's this other god awful depart that does something called IT.

Our executive might have experience in one area, brick laying, but he is responsible and really needs to focus his time and attention on the four other areas. And when people working for him come to him to make decision, they spend all their life in the details and give him a 5 minute summary from which he has to make decisions consequential to the business about an area where he's had 5 minutes of preparation. And there are 10 other things going on that he needs to prepare for.

Most executives would love nothing better than to be able to focus on things they know about and build deep relationships with people whose knowledge and dedication are crucial to the company. Unfortunately, that is not reality for executives in large companies that I've seen.

God is in the Why

The old saying goes that "god is in the details."  That might be.  Success is often made or lost in how the details are handled.  However, if you want to align and do what they need to do to all arrive in the same place, god is in the why.  If you want people aligned, they better see the same why, they better be singing from the same hymm book.

A child asks why something happens, why something was done, why people came together.  It's when everyone can honestly answer the question as it uniquely applies to them and find the direction that takes everyone to the same place, that you get alignment.

You cannot supply every answer, convince every skeptic or solve every problem necessary to make a project succeed.  If everyone knows the why and it relates to them, they'll come up with the right answers without you.

If you want alignment and success, god is in the why.

Photo Credit: escapista

Bird in the Bush

Warren Buffett used an investing analogy many years ago in one of his Shareholder Letter's that is relevant to people making business decisions.  Aesop's question of whether a bird in the hand is worth two in the bush.  Or if this is too theoritical for you, ask if a brunett in a convertible is worth five names in a phonebook. [Editor: How would you know?]

To answer Aesop's question, one has to decide how much more valuable the birds in the bush are relative to the one in your hand?  How difficult will the be to get them out?  Are there other benefits to gaining the bush?  How long will it take to get those benefits?

How often do business question come back to this?  If I invest in this project, will it improve my business?  How will I know?  How will the people working on the team know?

If you can articulate those answers with everyone on your team, aren't you much closer to aligning your team towards achieving those goals?

With all the tools available to us, how often are these basic questions ever asked or answered?

Now, where is that phonebook? 

Photo Credit: Olive Eyel

Economies of Scale vs Alignment

Is it easier to align five people or five hundred?  There's an old Dilbert cartoon which discusses how to determine the IQ of a meeting.  Start with 100 and then subtract 5 for every person added. [Editor: I subtract 10 for you.]

Everytime someone is added, complexity is added.  Agreement, understanding, shared vision, the ability to communicate effectively all become more difficult as more people are added.  If less is so obviously more, why do we continually add people?

Economies of Scale

The industrial revolution and the 20th century demonstrated the benefits of economies of scale.  It costs $3,000 to make 100 of Adam Smith's pins, however it only costs $4,000 to make 1,000 pins.  The price for each pin goes from $30 to $4.  

Where fixed costs are high and you have to build factories and assembly lines and have marketing departments and sales teams, economies of scale make a lot of sense.  Is that the world we face?

Less is More

In a world where you can outsource manufacturing, marketing, legal and accounting functions and focus only on the real areas you know, do you need the extra departments?  Do you need the headachs finding, hiring, training and aligning all those people?

2. The Credit Crisis: Why is it Important? A Little History

History is a guide to navigation in perilous times. History is who we are and why we are the way we are.     - David C. McCullough

This is the part 2 of 4 looking at the credit crisis:

1. The Credit Crisis: What Does it Mean for You and Your Company? - This will look at what’s currently happening and what it means.
2. The Credit Crisis: Why It Is Important? - A Little History - To get some context, we’ll look at why companies were set up and why investors, like Carl Icahn are so outraged.
3. The Credit Crisis: For Project Managers - What Does It Mean? - What are some things as project managers you should be doing.
4. The Credit Crisis: For Project Managers - What should you Expect? - What are things to look for and think about.

A little background on business
To get some insight to this, let’s think about why businesses were really founded. The modern corporation came started in Britain in the early seventeenth century, when some very intelligent and presumably humble nobleman noticed that there’s no correlation between intelligence and wealth. In fact, there may even be an inverse correlation, but I’ll resist the urge to rant about Paris Hilton and spare you my other Hiltonesque urges. [Editor: Please do.]

What these noblemen realized was that if they gave up a portion of their capital and entrusted it to an organized group of intelligent, motivated and hungry workers, they could make themselves much wealthier. A side benefit to this was the incredible improvement in the standard of living for those working for them. This is the genesis of the modern corporation.

Why is this important? What these noblemen and now women realized was that they had to set up the appropriate structures and oversight so the intelligent, motivated and hungry workers didn’t keep all the profits for themselves.  Corporations were created for the benefit of the owners, not to make the workers wealthy.

What Does This Have to do with My Business?  Remember AIG

AIG stockholders, the people who own the company, invested in the expectation that they would earn returns, instead lost over 95% of their money.  While the details haven’t all come out, it appear AIG Financial Products, a 377 person unit brought down the 18th largest company in the world.

“Since 2001, compensation at the small unit ranged from $423 million to $616 million each year”, according to corporate filings.  AIG Financial Products took positions that were much more risky than their executives realized, they walked away with huge paychecks and their liabilities lead to AIG’s downfall.

“Debts are easy to fix, but liabilities the nightmare!”

Where was the transparency?  How come no one knew how much risk they had put the company under?  How much will this cost?  What will our returns be?  These are not only historical questions, these are questions you are likely to have to answer in this next budgeting cycle.

Know that these questions are coming.  Be ready to answer them and you will be a star.  That is what we will look at next in part 3: The Credit Crisis: For Project Managers - What Does It Mean?

1. The Credit Crisis: What Does it Mean for You and Your Company?

One of the biggest problems we face today is the egregious mismanagement and reckless incompetence of many American corporate boards which utterly fail to do their primary job of holding managements accountable.

- Carl Icahn, Oct 7, 2008

Don’t Be an Ostrich
Many people watch what is happening on Wall St hoping they will not be affected. Sooner or later, it will affect you. Rather than avoiding the issue and burying your head in the sand, let’s understand what’s happening, what it means and what you can do to get ahead of the curve.

We will do this in four posts:

1. The Credit Crisis: What Does it Mean for You and Your Company? - This will look at what’s currently happening and what it means.
2. The Credit Crisis: Why It Is Important? - A Little History - To get some context, we’ll look at why companies were set up and why investors, like Carl Icahn are so outraged.  Understanding this is important to recognizing good opportunities.
3. The Credit Crisis: For Project Managers - What Does It Mean? - What are some things as project managers you should be doing.
4. The Credit Crisis: For Project Managers - What should you Expect? - What are things to look for and think about.

What’s Happening on Wall St?

A couple of things about this clip.  In addition to its humorously irreverent and more accurate than you might think description; it is also over a year old.  The credit crisis is not new.  It has been brewing for awhile and its resolution will take awhile.

Expect to Feel the Pain
Even if you’re not in financial services, expect to feel the pain. Consider that as of Friday Oct 8th 2008, US stock markets are down over 42%.  $8.2 Trillion dollars has been lost.  If there are 300M Americans, each is out $28,000. [Editor: This is worse than a divorce.  I lost half my money and I still have to put up with you!]

More concerning is that this is a credit crisis, not an equity crisis.  The stock market crash is the symptom, not the cause.  I won’t go into the details [Editor: Please don’t], but the cause is the credit crisis - banks unwillingness to lend to other banks and now businesses.

How this will work out is the real question.  Uncertainty leads to questions of confidence. How will the uncertainty be resolved? Transparency. What’s visible can be dealt with, it’s what isn’t currently visible that will drive people to want to know more.

Who will want to Know?
For public companies, executives and the board of directors will want to know.  Hence the Carl Icahn quote.  Consider this:

NEW YORK, Sept 15 (Reuters) - Shareholders sued Merrill Lynch & Co Inc Chief Executive John Thain and the company’s board of directors on Monday over the proposed buyout by Bank of America Corp, claiming the terms of the deal are unfair [to shareholders]. (Full Story)

What is important is that the suit is filed personally against John Thain and the board of directors. They are personally liable. The suit claims John Thain and the board “have clear and material conflicts of interest and are acting to better their own interests at the expense of Merrill public shareholders.”  There will not be enough D&O (Directors and Officers) Insurance to satisfy investors after all the money that’s been lost.

Nothing like the fear of a class action lawsuit to persuade you to get more transparency in your business.  Where is money going, how is it being spent, what returns are we getting from projects we invest in?

Private companies will answer similar questions from their own investors and executives. Furthermore, suppliers will want to be sure firms can pay. Vendors will want to be sure they can deliver. Banks will want to know how funds are being used.

We are heading into budgeting season.  Expect Ronald Reagan’s “Trust, but verify” to accompany the belt tightening.  Whether you call it transparency or regulatory oversight or SOX or corporate governance or [Editor: the following line was deleted, you can’t use that language.]; executives, directors and investors will want to know more.

Why Are Investors Like Icahn Using This Moment To Demand Change?
In addition to the reasons stated above, but there are historical reasons for wanting transparency. Understanding this will provide you insight to take advantage of the opportunities which will arise.  We will take that up in our second post: 2. The Credit Crisis: Why It Is Important - A Little History.

Have you started seeing changes?

Understanding the world and aligning your expectations

I'm sure you've talked about what's happening on Wall St.  Very few firms will be spared and if you work in project management, it's very unlikely you'll avoid all the problems.  As this chart from Sequoia Capital's presentation show, tech spending is heavily influenced by S&P 500 Earnings.

I've been doing a lot of work and I'm very excited that next week I'll be doing a series of posts for Silicon Valley Project Management on what the credit crisis means for people working in project management and in companies in general.

The outline is:

1. The Credit Crisis: What Does it Mean for Your Business - This will look at what's currently happening and what it might mean for your firm.
2. The Credit Crisis: Why It Is Important - A Little History - To try and get some context, we'll look at a little history of why firms were set up and why investors, like Carl Icahn are so outraged.
3. The Credit Crisis: For Project Managers - What Does It Mean? - What are some things as project managers you should be doing.
4. The Credit Crisis: For Project Managers - What should you Expect? - What are things to look for and think about.

I will be republishing it here a day after it publishes on SVProjectManagement.  Predictions are difficult, especially about the future.  I'd love to know your thoughts.

Andy

How to Determine a Leader’s Effectiveness?

When we talked before about our different levels, bricklayers, coaches, division heads and league commissioners, the question comes up, how to determine if they are effective?  Many times people study different factors.  In Built to Last, the eight factors one should look at are: strategy, execution, culture, structure talent, leadership, innovation, mergers and partnerships were used to determine if companies were going to last.

In Search for Excellence there were also eight factors: a bias for action, staying close to the customer, autonomy and entrepreneurship, productivity through people, hands on – value driven, stick to the knitting, simple form – lean staff, simultaneous loose-tight properties. [Editor: What do you know about any of these?]

All of these are excellent measure and they tell us something about the business, but they are like a thermometer with different parameters: temperature, barometric pressure, humidity etc.  They give us a lot of insight into the weather or ways to measure a company, however, no amount of studying a thermometer is going to change the weather. Likewise, someone taking the lead in the introduction of a new order of things, is so consumed by the daily details and so effected by the changing environment in which they work, that knowledge of these things doesn't predict effectiveness. 

Being familiar with these things might make someone more effective or it might make them less effective. The major determinant is going to be the influences of the outside environment. Environmental conditions (weather, altitude etc.) will affect brick laying more than strategy, past experience or culture. Whether we call someone a manager or a leader and the degree to which these ideas have an effect at different levels of the organization is an interesting question, but will it determine their effectiveness?

Beyond a certain point, do you think studying the aspects of a thermometer make you a better weatherman?  How much does one need to know about the parameters of leadership to lead?

How Do You Define and Align Expectations at Different Levels in an Organization?

If you're a brick layer, it's very easy to determine who the best brick layer is. Count the bricks. Some smart, clever brick layer may come up with a more effective way to lay bricks.  That’s wonderful and they may become a lead brick layer and be deemed a "leader". 

If we want to improve things, we might decide that it's a good idea to have someone coach a team of brick layers. We might say that a coach should work with 11 brick layers to find ways to make them all more effective. Determining the most effective coach is pretty easy. Count the total number of bricks laid by each team. You'll find that some coaches are more effective than others. 

Experience and brick laying skills are probably important to the coach.  If the coach has previously worked as a brick layer, it's reasonable to assume they'll be more empathetic and effective. Good coaches will also have different ways of organizing their teams, different methods of laying bricks, different attitudes towards laying bricks, etc. Clever coaches will use different techniques to maximize their teams.  If you’re laying bricks in the mountains you might want different types of people than if you’re laying bricks in a dessert.  Still, it’s pretty easy to measure a coach’s effectiveness. 

Now, let's say that we want to create a larger organization. We might have a division. A division consists to 10 teams of brick layers. In order to resolve disputes and make things more organized, we might say that we have a division head. This is necessary because everyone is trying to improve so there are competitions between our brick laying teams. [Editor: teams from the Big-10 seem particularly skilled at laying bricks…]

Now, the skills necessary to be an effective division head are not necessarily the same skills necessary to be a good brick layer or even a good coach. Also, complicating the issue, how do you measure who is an effective division head? Looking at the total number of brick laid might be effective, but they are pretty far removed from the brick laying process and the things they handle on a day-to-day basis are probably not similar to the brick layers or the coaches. 

If we elevate this one more level and create a league, the problem becomes even more obvious. The league is composed of 10 divisions. Some of these divisions are in the mountains, others are in the dessert and others have to deal with great lakes and snow storms. The types of bricks that each division can get are different just as laying bricks at 2,000 feet above sea level presents different challenges from laying bricks in the dessert, which is completely different from laying bricks in the middle of a Wisconsin winter. 

How do we determine if our league commissioner is effective? A brick layer or a coach may have innovative ideas and it's easy to asses their effectiveness. But determining the effectiveness of a division or league commissioner is more problematic. 

How would you approach this?

Is it the Environment or the Actions which Make You Successful?

If you want something to be successful, do you create the environment or pull the trigger? If you are going to have a successful project, the correct environment needs to be created. Pulling the trigger is nice and that is what people will notice, but success depends upon preparation. That preparation is rarely noticed. The most aggressive actions in the wrong environment end up looking silly.

Think about it this way, do forest fires occur when someone carelessly throws away a match? Well maybe. If you throw away a lit match in a green forest with rain falling all around you, it's very unlikely a forest fire will result. If it is in the middle of a heat wave with the grass burnt brown and hot Santa Ana winds blowing at night, a roaring forest fire may result. What is critical is the environmental conditions in which the match was thrown.

It's the old line about the straw that broke the camels back. Straw is essentially weightless, but under the right conditions, it can wreck havoc. Maybe those conditions are an overloaded camel or some other environmental situation.

If you want tremendous results, look at the environment, the necessary preparation to succeed within that environment, get the preparations underway and then at the right time, pull the trigger.

Have You Prepared Yourself for the Opportunity to be Lucky?

Someone once said that luck is the intersection between preparation and opportunity. If you prepare yourself and hit on the right opportunity, you have made yourself lucky. Congratulations, you are participating in a good life. You should be happy and your friends should be happy for you.

If you want to create something, doesn't it take more than luck? You need an idea for what you want to create. You need a plan and to know what the plan will require and whether it's feasible.

If you have a feasible plan, you need to find the missing pieces. When you find the people with the correct preparation to complete your plan; you need to articulate it in such a way that, it is in their best interest to make your plan succeed. They need to see your plan as their opportunity to make themselves lucky.

If the plan requires capital or assistance to be successful, then everyone needs to see how it benefits them to have your plan succeed. They all need to provide input to fill in the missing pieces so the plan has the best chance of success.

Finally, you must have enough time. It takes time to come up with an idea, make it feasible, find the right participants, get meaningful assistance, refine the plan and then execute it successfully. All of these things are important, but they all start with you. Have you prepared yourself for the opportunity to be lucky?

Photo Credit: Eric Lafforgue

Should You Manage People or the Environment?

Fish do not notice the water in which they swim.

Every company has a culture. There are myths and stories that are told which reflect the company culture. Its hard to define, its difficult to see and it affects every decision, project and action a company takes.

Is it easier for a fish to swim with the current or against it? Does the pounding rain, rocking waves and conflicting currents lead to curious and creative fish or small, protectionist and defensive fish?

Should you try and manage the fish or will you do better managing the environment?


Photo Credit: Olive Eyel

Aligning People or Letting them Align Part IV

Bill Miller and I have been talking about whether it is better to align people or let them align. You can read the other three parts here, here and here. Its been a great discussion, to make it clearer, I'd like to reframe my response. I always hate it when girlfriends do this to me, so I'm apologizing up front. [Editor: No need to apologize, I've been suggesting girls do that to you for years and it's benefited me tremendously.]

A little background on business
To get some insight to this, let's think about why businesses were really founded. The modern corporation came into being in Britain in the early seventeenth century, when some very intelligent and presumably humble nobleman noticed that there’s no correlation between intelligence and wealth. In fact, there may even be an inverse correlation, but I’ll resist the urge to rant about Paris Hilton and spare you my other Hilton-esque urges. [Editor: Please do.]

What these noblemen realized was that if they gave up a portion of their capital and entrusted it to an organized group of intelligent, motivated and hungry workers selected from the masses, they could make themselves much wealthier. A side benefit to this was the incredible improvement in the standard of living for those working for them. This is the genesis of the modern corporation.

Why is this important? What these noblemen and now women realized was that they had to set up the appropriate structures so the intelligent, motivated and hungry workers had proper direction and incentives to make the business successful and them wealthier.

Project Structures
Should teams self-organize? Absolutely. As a project goes along, the team needs the freedom to realign itself to meet the demands of the project. What an effective manager does is define the structures within which to project will operate to deliver what the business needs. If the project team has the correct direction and incentives, they will align themselves and the project has a better chance of success.

Does this make sense?

Photo Credit: Eric Lafforgue

Aligning People or Letting them Align Part III

Bill Miller, confound him, asked an excellent question. Normally I avoid people asking excellent questions, but as he paid me the compliment of commenting on what I wrote, [Editor: and I made sound intelligent] I felt obligated to respond. And it is an excellent question.

What is the essence of self organization as opposed to their being organized?
The crucial question is responsibility. If a group organizes itself, the group is responsible for the outcome. If someone else organizes the group, the organizer is responsible the outcome.

If ten kids get together to play basketball, then they choose teams, call plays and evaluate the results. If a coach organizes a team, schedules the practices and calls the plays, then the coach is responsible.

Accepting Responsibility Versus Diffusing It
If three people get together and start a company to implement a new idea for running projects, they are responsible for developing the products, the methodologies and finding the customers. If their products and services work, customers continue working with them and the company grows. If their approach doesn't work, the company goes out of business. Those three people and the others who join them are responsible. (This is how CAP was born)

If a company decides that it wants to implement a new program, it picks three people and tells them to implement it. The first thing those people do (if their smart) is ask for more money, more people and more time. In this situation, it is in the three peoples' best interest to make the program as large, as expensive and as time consuming as possible. If they are smart, they diffuse responsibility, but accept credit.

What Advantage do Entrepreneurs Have?
An entrepreneur and the people starting a company take responsibility for making it succeed. People taking a job are responsible to do what someone else organized for them to do.

Are both important? Absolutely.
Which one is likely to effectively produce defined products and services?
Which one is likely to produce innovative products and services?
Which one are you looking for?

Does Technology Create Transparency or Mirages?

Many companies implement huge IT packages to get better visibility into what's happening and to (presumably) get more control, but this begs the question, does technology give you better transparency? Theoretically, it should and even could. Practically, technology may create mirages more effectively than a desert.

Why Does Technology Create Mirages?
Transparency comes from corporate strategies that value transparency. Technology effectively supports that approach if it exists or it obfuscates if one is not careful. If the departments and groups implementing the technology want people to know what they are doing, then you'll get a lot of transparency. If the departments and groups do not think it is in their best interest to have people know what they are doing, technology will not help; in fact, it will probably show you a corporate mirage. [Editor: Sort of like I help you look intelligent.]

Just like in the picture above, the peaceful and attractive house with bushes around it reflected in the lake is a mirage, sophisticated managers can manipulate technology to show whatever it most benefits them to present. Technology is not a magical elixir.

How can Technology Provide Transparency and Control?
If there is:

• Clear thinking about the business objectives
• Products and services that customers value
• Business models that support the required infrastructure to deliver those products and services and create reasonable profit margins
• Appropriate incentives to motivate employees to deliver those products and services

If those things exist, there will be transparency and control will not be a problem. Technology enhances the processes and systems a business uses to do its work. So, will adding technology enhance your transparency or create corporate mirages?

Photo Credit: mbz

Aligning People or Letting them Align Part II

Bill Miller made an interesting suggestion about self organizing teams. As kids playing baseball, the first decision was often who would be the two team captains. Those captains then picked the teams. Sometimes they were the two best players or more often the two players most able to help their team win. As kids, we knew what was important to win.

An interesting circle of dependencies. The kids picked the captains and the captains picked the teams. Almost an implicit contract. The group gave the captain the right to organize the team, but if the team didn't win, but they had to win to be captain in the future.

Captains changed. Sometimes one person was a captain for one sport, but not for another. Sometimes frustration over past performances lead to minor mutinies. [Editor: That will be fine, thank you.] Sometimes new leaders emerged as time went on. What's important is that the process was self regulating. If the captain helped the team win, they continued as captain.

Can Business be Self Regulating?
There are obviously differences between ten year olds playing baseball and business, though I suspect there are not as many as one might hope. How different would it be if the workers picked the manager? If the people working on a project were responsible for identifying the person most likely to make the project succeed, who would they pick? And why?

Often times in business executives picks a manager or team lead and then charge that person with assembling a team. What if the team were selected first and that teams first responsibility was to pick the team lead?

Have you heard of people taking this approach? How did it work out?

Do You Align People or Let Them Align?

People are inherently self organizing. Who did you make friends with when you were a kid on the block? When you went to school, there were many kids in school, but there were a couple who became your friends. Why?

Are you organizing your teams so the become more efficient and effective, like the swimmer on the US relay team? Or are you hampering the very creativity needed for great advancement? Not sure? Think about how insurance or stock exchanges came about.

Why is it Called a Stock Exchange?
In 1680 Jonathan Mills opened a coffee house on Exchange Alley in London. It started attracting like-minded individual who would buy and sell stocks and commodities. By 1698, John Castaing had started posting prices. Taking the street name, Exchanges were born.

A Second Example, Lloyd's
Likewise, around 1688 Edward Lloyd opened his coffeehouse, Lloyd's. It attracted merchants and ship owners. By 1692 it moved to Lombard St and was later incorporated as a society, and insurance was born.

Why Organize the Self Organizing?
If kids can organize a football game all on their own, why inflict organization? Because organized teams beat sandlot teams. Companies are organized to clarify roles and responsibilities. Accounting and Finance are different from sales. Likewise project teams are organized to ensure the right people are in the right roles with the right responsibilities. [Editor: Can't my responsibility be to roll you under?]

In your company and projects', are you organizing to amplify peoples' abilities so the team succeeds and wins the gold?