The Enterprise as a Whole

From the Ask Tom mailbag –

“Different functions in a business do different things, and they each have their own set of cultures, rules and ways to be measured. We need to respect this, and stop imagining that how it works for us is how it should work for everyone else. Each function needs to be managed in the best way to suit its purpose, and the business needs all of its functions to work well and respect each other and their methods and measures if the enterprise as a whole is to be successful.” Comment posted to Responsibility, Accountability and Authority.

Response:
This comment began by railing against management as command and control, ended up with a brilliant description of what management IS. To understand management, as a subject to be studied and understood, we have to step back. We complain that how management works one way, does not work in another way. We get wrapped around the axle.

In the differences, there are universals. Here is what I pulled out of the comment posted above.

  • Business is a collection of different functions. Each function will have its own set of cultures, rules and measurement systems. And those systems will have different characteristics.
  • Each function must have a purpose. All the discussion about goals and objectives ultimately arrive back at purpose.
  • Each function must work together, must be optimized and integrated for total organizational throughput. Out of balance systems create internal feasts and famine, starving and bloating. Some optimized systems remain appropriately idle waiting for constrained functions to catch up.
  • Management is about the whole organization, separate functions coordinated together for the benefit of the whole system. This coordination depends on discretionary judgement, making decisions and solving problems, in roles we call management.

As the organization grows more complex, it needs more management.

Operations and Command and Control

“If only life and business were that simplistic,” Scott said. “If you work in operations then your job is about commanding and controlling the time, labor and technical resources towards an agreed output. For the jobs in operations, your vision makes sense. But, I think it is only a functional perspective, not a universal one.”

“You seem to think that operations is all about command and control,” I replied. “It sounds a bit mechanical. Tell me more.”

“Operations is operations. Pretty cut and dried. We have defined processes inside efficient systems. Line up the people, line up the machines, line up the materials. Pop, pop, pop. Predictable output. Yes, it is a bit cut and dried.”

“If that is all there is to it, then why don’t we have robots do all our work?” I probed.

“In some cases, we do,” Scott raised his eyebrows in a subtle challenge.

“Yet, even in the midst of defined processes and efficient systems, even in the midst of robotic welding machines, we still have people engaged in operational work. And in that work, as defined as it is, aren’t there still problems that have to be solved and decisions that have to be made?”

“Well, yes,” he nodded.

“So, inside a process you describe as command and control, there is still discretionary decision making?”

Scott continued to nod.

“So, it’s not all neat and pretty,” I said. “Not all tied with a bow. In fact, some days, the work gets downright messy. Even mature processes are subject to variations in material specs, worn machine parts, delays in pace. Command and control short-changes the discretionary judgement required to effectively operate a well-defined system.”

Inspired by a comment posted to Responsibility, Accountability and Authority

Slow Way to Change the Culture

From the Ask Tom mailbag – on Quickest Way to Change the Culture.

Question:
Okay, I got what I wanted about hiring new people who are more into process than firefighting. But how do you change the current team, whose culture has been more about firefighting than process.

Response:
Changing culture is a long term journey. It requires patience, persistence and paying attention. Same scenario for maintaining the culture you want.

Behavior – it’s all about behavior. We can put teamwork posters on the wall, but that doesn’t mean a thing. Culture is about behavior, not posters. Culture is that set of unwritten rules that governs our required behavior in the work that we do together.

It starts in the debrief, the post-mortem, the project review. That’s why you have to pay attention. You have to pay attention to behavior IN alignment and behavior NOT IN alignment. When you see it, you have to call it.

I like to use a group setting after a project, because I want lots of people talking, not just me. In fact, I just want to ask questions. Let’s stick to process vs firefighting, here are my questions.

  • When we attack a problem, using a process (checklist, model, protocol, step sequence) what are the major benefits in the result? [Your group or team should be able to come up with a dozen or so benefits.]
  • If those are the major benefits, what stops us from using that process? [Your team should be able to come up with a dozen excuses not to use the process.]
  • So, let’s look at the process. [You do have a process, don’t you, because if you don’t have a process, you may have to go back to firefighting.]
  • In what way can we stick to the process next time to get the results we want? [Here is where I go back to the excuses to reveal them for the head-trash they are.]

And I use this de-brief often, just asking the questions. BTW, this is a simple gap analysis.

  • What do we want?
  • Where are we now?
  • What’s in the gap, keeping us from getting what we want?

Rinse, repeat. Often. Slowly, the group will turn. Patience, persistence and paying attention.

Quickest Way to Change the Culture

From the Ask Tom mailbag –

Question:
I am working in an environment where firefighting has been modus operandi for a number of years, and as a new manager in my area, I am hoping to define a new culture to break out of constant firefighting mode and into a more pro-active mode of operation. The organization is growing starting now and will continue to do so into Q2 of next year, so we are interviewing and hiring NOW.

Can you talk a little bit more about how to define an intentional culture in an organization, especially in one where an unintentional culture already exists and is deeply ingrained?

Response:
Your company is in typical go-go stage. There is adrenaline and excitement at every turn. Firefighting is the order of the day. The customer gets the product or service and is very happy, but as we look in the wake, we find body bags and other evidence of organizational friction. By the way, this is a normal and natural state in the lifecycle. And it’s fun, give me a high five.

We got the job done, but at what cost? This friction costs us efficiency and profitability. And at some point, in spite of our exuberance, we have to get down to business, we have to become efficient, we have to become profitable.

This is a natural move from S-II to S-III, from chaos to system. But you will fight it at every step because the culture is addicted to the juice of chaos. You want to move from reactive to proactive. You are correct, this will require a change in your culture. And the quickest way to change the culture is to change the people.

You are looking for someone to join your team with experience in process and systems. Here are some questions.

  • Tell me about a time when you worked on a project that seemed to be mired in chaos?
  • What was the project?
  • What was your role in the project?
  • What created the chaos?
  • How did you respond to the chaos?
  • How did your approach work?
  • What was the result on the project?

I am not looking for heroic responses. I am looking for calm, someone who took a step back, someone, who, in the midst of chaos, insisted on a plan. It might have been a quick plan, but a plan nonetheless.

Not what I want to hear –
I was working on the ABC project and the client was way behind schedule when we started. The client was about to lose their bank funding and we had to finish on time even if it meant that we had to take shortcuts. Or all would be lost. We took a risk. There were several steps in the process that we could omit. We sidestepped all the quality checks, hoping the project would hold together. We got lucky. Nothing broke. We finished the project on time. I call my team – the firefighters. Give us a firefight, we will win.

What I want to hear –
I was working on the ABC project and the client was way behind schedule when we started. The client was about to lose their bank funding and we had to finish on time even if it meant that we had to take shortcuts. I was the project leader. I had to put my foot down. There were several quality checks that slowed the project, but they were necessary. I put together a flow chart and a plan. I went with my client to their bank to present the plan. They gave us an extra 48 hours. We made it. The plan worked.

Saving Face in a Reassigned Role

From the Ask Tom mailbag –

Question:
I just read through a couple of your more recent blog posts. Specifically, the one titled “Someone in the Wrong Role, How to Reassign” caught my attention. So what’s the answer to Cheryl’s dilemma? If we need to reassign someone to a new role, because they are better suited in another necessary role how do we allow them to save face. “Somehow, we have to allow Harold to save face in front of the company. I am just not sure how to do that.”

Response:
People change roles all the time. Titles are switched, departments re-organized. First, understand that reality always wins. Don’t try to blow smoke.

Here is the reality. The company needs everyone to be in a role where they can be most effective. The company has a necessary role. (You would never put Harold in an unnecessary role). The company thinks Harold is better suited for the new role than the role he is in now.

First, how do you know Harold is better suited? Hint – you don’t know.

How do you, as a manager, find out if someone is suited for a new role they are not currently doing? The answer is ALWAYS — give them project work. Give them a project that contains time span task assignments similar or identical to the work in the new role.

If they are successful, it is a simple transition from project work to a new role. The announcement is easy, based on the successful project.

Can’t Be a Smoker Unless You Smoke

From the Ask Tom mailbag –

Question –
How do you interview for culture fit?

Response –
Here is my list of four absolutes required for success in any role, regardless of discipline.

  • Capability (measured in Time Span)
  • Skill (technical knowledge, practiced to mastery)
  • Interest, passion (value for the work in the role)
  • Required behavior

Have you ever hired someone, with the required capability, technical knowledge and practiced mastery, high value for the work, but the person just didn’t fit? The person just didn’t fit the culture?

Culture (my definition) is that set of unwritten rules that governs our required behaviors in the work that we do together. If it was a written set of rules, it would be in our SOP. Culture is determined by our practice and behavior. Culture is real. Culture can be influenced, but it is defined by the actual practice and behaviors that occur.

An organization can say they have a culture of open communication, but, culture is real. A culture of open communication is only defined by actual behaviors. It’s like being a smoker. You can’t be a smoker unless you smoke.

That’s why interviewing for culture fit is so important. It’s all about behaviors. The quickest way to change your culture is to add people to your roster that engage in behaviors counter to your (intentional) culture. Your culture always changes, shifts, when you add new people, because you are adding new (perhaps subtle) behaviors to the dance.

But your question is, how? How do you interview for culture fit? First, identify the behaviors that define your (intentional) culture. Then interview for those behaviors.

If you have an (intentional) culture of teamwork, identify those behaviors that support teamwork, like cooperation, collaboration, synchronization. Then interview for those behaviors.

  • Tell me about a time when you worked on a project where teamwork was critical?
  • What was the project?
  • How long was the project?
  • How many on the project team?
  • What was your role on the project team?
  • Why was teamwork critical on this project?
  • In what ways did the team work well together?
  • In what ways did the team work against itself?
  • When the team worked against itself, what did you do?
  • How did that work out?
  • What did you learn, working with that team?

Culture is all about behaviors.

Can You Trust Subjective Judgement?

From the Ask Tom mailbag –

Question:
Following up on our discussion at the workshop last week, I am curious. As a manager, how do I determine which team members have the potential to grow and which will hit the wall. I want to focus my time on team members with the greatest potential.

Response:
You have to use your judgement. Observe and make a decision. That is what managers do. But what do you observe?

For fun, in the workshop, you may remember I asked how many of the group had taken a course in psychology in high school or college? Most raised their hand. Then I asked who had degrees in psychology? Most of the hands disappeared. When I asked who was certified by the state to practice psychotherapy, one person said he was certified, but not to practice psychotherapy.

Here is the problem. When managers question whether a person has potential, they fall into a trap. The trap is the approach, because most would play amateur psychologist.

Then I asked the group, who could spot positive behavior, in the field, on the plant floor? Most raised their hands again. And who could spot negative behavior? All hands went up. How long did it take to tell the difference?

Don’t play amateur psychologist with this stuff. Play to your strength as a manager. Managers are experts at the work. If you want to know if someone has potential, give them a project to do. Then, watch, observe. Use your managerial judgment.

But that is so subjective, I hear. Yes, it is subjective. It is also highly accurate.

Reward or Punishment?

“So, you clearly understand that you are the problem?” I asked. Events became clear for Reggie. His incentive program backfired. In the short run, his company’s margins were not compromised, but long term, he created a culture cloaked in clandestine competition. His managers gamed the system to beat margin quotas.

“We hired a compensation consultant to help us structure this incentive program,” Reggie defended. “They were very professional and seemed expert in their process.”

“Tell me, Reggie, what impact did this incentive compensation have on your manager’s contract?”

Reggie moved his head an inch, “What do you mean, what contract?”

“You know, the contract. The contract that says You get paid every day to come to work and do your best. To focus your efforts where they are most effective. To give us your best effort.

Reggie didn’t know how to respond. “Yeah, but that doesn’t seem to work around here. People don’t come to work and do their best unless you, you, you hold some of the money back and give it to them as a bonus.”

“So, what you are saying is that you don’t trust them to do their best, so you don’t give them all their money unless they show their best effort? Then you give them their, well, you call it a bonus.”

Reggie slowly nodded his head.

Contrived System of Reward

“But the worst part of my little bonus system,” Reggie confided, “was not that my managers manipulated the numbers, but that the system I created changed the mindset. I corrupted their thinking. Digging out of that hole is going to take time. And some of them will not survive. I created a contrived system to reward something I thought was good.

“And the winner of my little contest, the successful candidate who gets the position as the new division VP, is going to think he got the job by gaming the system. It doesn’t matter how I explain it, in his heart, his experience will tell him that he got the job by playing with the numbers.

“It is really true,” Reggie continued, “the behavior you reinforce, is the behavior you get. I created the incentive. I got the behavior.”

“If you are going to create a different environment, what has to change first?” I asked.

“All crumbs lead to the top,” Reggie said. “I have to change first.”

Competition and Manipulation

“So, you’re the culprit,” I repeated. “What specifically did you do that was so counterproductive?”

“I remember, it wasn’t anything extreme. We have different sales channels and different product lines, with outside sales, inside sales, internet sales. I began to hand out bonuses for each department with the highest gross margin, another for the highest revenue in the quarter.

“It’s funny, now that I think about it, when I handed out those bonuses, the room was quiet. There was no jubilation or high-fives, just a nod and a polite thank you.”

“Tell me about the down-side?” I asked.

“I found out later,” Reggie explained, “that each department gamed the gross margins. They would pump up the pricing in the last week of the quarter and then rebate it back to the customer in the next quarter. In the end, we still got our standard margin, but each department manipulated the bonus system. And all the progress we made on cross-selling was lost.

“And it’s not so much that they had to pay the piper in the next quarter, but look at all the wasted energy, counterproductive to what we stand for. And the last thing on our mind was doing a good job for the customer.”