Limits are good

Posted August 24th, 2011

Kurt is the COO of an innovative non-profit that marshals corporate resources to address problems in its greater municipal area — education, pollution, transportation etc. Business is good for Kurt, and opportunities abound. He’s been to Shanghai twice in the past year to coordinate with businesses there; he’s leading an exciting new cyber-security initiative between government and industry; he’s involved with an program to improve outreach to existing member corporations; and he’s leading the charge to recruit new corporate members.

There’s only one problem: corporate membership is down. Attrition is high, because member companies feel that they don’t get enough attention. In fact, it’s only increased since the non-profit started pursuing some of its new programs. Which is sort of like saying that your bank does a great job of providing free wi-fi and donuts in the lobby, but it has an unfortunate tendency to lose track of your money.

You see this problem all the time. Companies can’t execute on the simplest and most critical tasks, because they’re trying to do everything. They pour resources into entering a new market but neglect their existing customers. They develop sexy new products but forget to update and improve their current products. Individuals do the same thing: they take on high-profile new projects but stop attending to their existing responsibilities. Reach > grasp.

Jeffrey Pfeffer, professor at Stanford University’s business school, tells this story:

Gary Loveman, CEO of Harrah’s Entertainment, is someone who gets this. Visiting Stanford one day, he told my class that when he entered the company as COO he reduced most executives’ job scope, because he believes that people don’t do very well processing complex agendas and that success mostly comes from effort focused on the most critical and achievable objectives.

Your most limited resource isn’t money. It’s time and mental focus. Not only are there a finite number of hours in a day, there’s a finite amount of processing and decision-making power in a day. As an individual, that means that you’ve got to ruthlessly prioritize the areas in which to pour your attention. As a leader, that means that you must constrain the job scope of each person on your team, like Gary Loveman.

Kurt isn’t to blame for the high attrition rate at his non-profit. It’s his CEO’s fault. He’s a brilliant thinker who discovers opportunities all the time. . . and then dumps responsibility for executing them upon Kurt. Without the discipline to say no to some of them, or the willingness to match managerial resources to his agenda, the CEO is dooming the organization to a future of unrealized expectations, half-baked initiatives, and a declining membership.

Limits are real. Acknowledging them is not a sign of weakness or timidity. It’s a sign of pragmatism that will help you get to where you want to go.

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A life preserver for drowning rats.

Posted August 10th, 2011

In last week’s blog post, I wrote that Jeff Kindler, the former CEO of Pfizer, was

thoughtless about the demands his communication style placed on his team and the results of that style. By making all his questions a matter of supreme urgency for his team — and let’s face it, communicating via BlackBerry at all hours of the night screams, “PAY ATTENTION! I’M IMPORTANT!“ — he sowed the seeds of his own demise. Part of your role as a leader is to help people distinguish among levels of urgency and importance. Cramming everything through one communication channel — whether that’s email, IM, text message, or meetings — is a recipe for disaster.

One of my clients has taken this concept to heart. They don’t have a leader who abuses his BlackBerry, but they do have an awful lot of engineers who are drowning like rats in the flood of communication — particularly phone calls and emails –  within and between their teams. As a result, they can’t distinguish between critical and time-sensitive issues like a major product flaw, and trivialities like the new flavor of coffee that they company has put in the machines.

Their situation is hardly unique, of course. But unlike most groups who simply wave their hands inertly and bemoan their fate, they’re actually doing something about it. This is their new communication protocol:

Communication Protocol

Okay, this protocol isn’t a breakthrough along the lines of, say, cold fusion. (Or duct tape. Or Oreos, for that matter.) But it does create clear expectations and guidelines to help the engineers manage the communication and information flow that was previously threatening to inter them.

Pay attention to one critical consequence here: everyone has agreed that email is NOT to be used for urgent or complex issues. This agreement really is significant, because it unshackles people from their BlackBerries during meetings, or product development work, or strategic planning. Or their kids’ soccer games. Or dinner. Or sex. Which means that there’s now a fighting chance to have some uninterrupted time to, you know, think.

This protocol might not work for you. Every company has an idiosyncratic culture and needs. The important thing isn’t how you define your communication protocol, but that you define it. And while this might not be perfect, so far it’s been a pretty good life preserver for all those drowning rats.

Now, what are your guidelines?

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August 2011 Newsletter

Posted August 5th, 2011

Rush hour syndrome: when you cram more stuff into your day, less stuff comes out.

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What’s your Batphone?

Posted August 3rd, 2011

Would Jeff Kindler, Pfizer’s fired CEO, have been able to keep his job if he had a Batphone?

Calls coming through the Batphone have the highest priority. The signal is unambiguous: if the Batphone rings, it must be important, and Bruce Wayne stops everything to answer it. But this system only works if there’s an agreement that the caller only uses the Batphone for urgent issues.

Compare this mutually respectful agreement with how Jeff Kindler handled his communication with his staff. According to a terrific Fortune magazine article, Kindler

bombarded [his executive team] with long BlackBerry messages filled with questions at all hours of the day and night. He regularly scheduled conference calls on weekends. He seemed oblivious to executive vacations. He expected immediate responses to his questions, making no distinctions between urgent matters and routine ones.

All that didn’t just make life miserable for Kindler’s team; it also clogged the company’s decision-making process. Kindler was a voracious consumer of information — often a strength but increasingly a weakness. “Jeff heard something or read something,” one former HR executive recounts, “and there would be a barrage of e-mails in the middle of the night.” The next morning, staffers would have to divvy up the directives. “It was triage.”

Kindler was guilty of doing something that all of us do at times: ignoring the distinction between urgent and routine issues, and choosing the appropriate communication channels. That overwhelmed his staff and slowed down their ability to respond to truly important matters.

As a leader, it’s incumbent upon you to be extraordinarily careful about what you say. As I’ve written about before, your words — your casual requests, your idle comments — have enormous impact on your team. The communication medium you choose is nearly as consequential. In the story above, Jeff Kindler seriously degraded his executive team’s ability to act because he was careless.

“Careless” may seem an odd word choice to describe someone who obviously cared intensely about the success of the company. Nevertheless, that’s the right word. He was careless in *how* he communicated. He was thoughtless about the demands his communication style placed on his team and the results of that style. By making all his questions a matter of supreme urgency for his team — and let’s face it, communicating via BlackBerry at all hours of the night screams, “PAY ATTENTION! I’M IMPORTANT!“ — he sowed the seeds of his own demise.

Part of your role as a leader is to help people distinguish among levels of urgency and importance. Cramming everything through one communication channel — whether that’s email, IM, text message, or meetings — is a recipe for disaster. Consider setting general policies around communication: how will you and your team handle urgent issues? How will you handle important (but not urgent) matters? What kind of service level agreements pertain to each form of communication?

The Batphone only works if there’s a mutual understanding of its purpose and respect for the person on the other end. Jeff Kindler didn’t understand or respect the power of his BlackBerry. That failure of understanding wasn’t the only reason he was sacked. But it certainly didn’t help.

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When all you have is a hammer…

Posted July 27th, 2011

…everything looks like a nail. Even if it’s an ice cream sandwich.

According to Bloomberg Business Week, the failure of the Chevy Volt to win over consumers is due to the mismatch between the “green” image of the car and the decidedly non-green image of General Motors. The author of the article, who is a brand and marketing consultant with a long background at Clorox, and who bought his car in December 2010, says that

most of my “Green” friends are uninterested [in the Volt]. They’d rather own a Toyota Prius—or await for a plug-in from some other company. Why? Because the Volt is made by General Motors and they just can’t believe GM’s heart is in it.

The author goes on to explain that consumers want to buy a product from a company that shares their values:

Toyota has long supported fuel-efficient vehicles. If Toyota had launched the Volt, chances are it would already be a runaway success. But GM? It’s hard to associate the company that brought us the Hummer with a green image. How could GM executives possibly care about fuel efficiency? Or even get it right? Are they doing this only to look like good corporate citizens?

I suppose there’s some merit to this argument. It would seem weird if Payless Shoe Stores starting selling high-end performance running shoes. Except that ascribing the Volt’s struggles to GM’s non-green image is like saying the Titanic sank because the dining room menu didn’t include a porterhouse.

Consider the following:

  1. As of mid-July, there are only about 200 Volts available nationwide.
  2. There will only be about 10,000 units available for sale in the U.S. by the end of 2011.
  3. The Volt starts at $40,000. The Prius starts at $23,500. The Nissan Lean starts at $32,800.
  4. It takes 10-12 hours to recharge the car with a standard outlet. Good luck if you live in an apartment building that doesn’t have electrical outlets near the parking spaces.

Maybe it’s just me, but those seem to be far more salient facts than whether or not GM has a sufficiently green image. Who wants to pay twice as much for a car that they probably won’t get for months and that might not be easily rechargeable, when they can get a Prius or a Leaf?

This is what happens when your article is written by a consultant who specializes in branding.

Missing the boat like this isn’t a mortal sin when the product is an article in a weekly magazine. But it could be catastrophic when the product is a new corporate strategy. Or a succession plan. Or the roadmap for international expansion in China.

Everything we do is colored by our experiential filters. Those experiences shape our views and give us tools with which to address our organizational challenges. That’s human nature. And therefore it’s incumbent upon you to know what experiences and biases an employee, a writer, or a consultant brings to the table.

Because if the only tool on his belt is a hammer, you damn well better have a bunch of nails.

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Monkey bars physics

Posted July 20th, 2011

Kyle is a VP at a large manufacturing firm. His ascent up the organizational food chain has been fast and impressive, and now he’s reaping the financial rewards of all his hard work.

Kyle also works horrific hours, between 90 and 100 hours per week. He doesn’t spent nearly as much time with his family as he’d (or they’d) like. More importantly, he’s got a pile of strategic initiatives and projects as long as his arm that are lying moribund on his desk. He knows they’re important to both his and the company’s future success, but right now they’ve got about as much chance of completion as Transformers 3 does of winning the best picture Oscar. It just ain’t gonna happen.

Kyle’s obviously competent, but he’s being held back by his own proficiency. He’s still doing work that he did earlier in his career because he’s really, really good at it. He’s forgotten the essential physics of monkey bars that he learned on the playground: you can’t move forward until you let go of previous bar.

Kyle is holding onto work that should be — must be — delegated to others. It’s almost certain that it won’t get done the way that he would have done it. And it’s possible that it won’t be done as well as he would have done it. If that’s an issue, then it’s his responsibility to create standard work to ensure that it’s done his way. In any event, he can’t keep doing it. If he’s holding onto those lower value activities, he can’t turn his attention to the bigger picture issues that the company needs him to address.

I often see companies struggle with execution because managers and executives aren’t able to devote the time and attention to the critical initiatives facing their firms. They haven’t internalized the physics of monkey bars. They have to let go before they can move forward.

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What every CEO needs to know about 5S and signal to noise ratio

Posted July 13th, 2011

Ron Ashkenas tells the following story:

In one large consumer products company, the CEO insisted on having detailed operational reports rolled up every month to the corporate level, which she then used for a monthly review meeting with business heads and corporate staff. Creating these reports required a small army of corporate financial analysts while also creating a cascade of work within all of the business units. And since the financial analysts were not always busy with the monthly reports, they also generated additional activities for the businesses that they thought were value-added. When the CEO retired, her successor decided that these detailed operational reports were unnecessary since each business unit already reported its key numbers — and the big review meetings never resulted in substantial decisions anyway. In other words, he quickly determined that this form of operational roll-up was not critical to the company’s success and it was eliminated (along with the small army of financial analysts and the additional work they spawned).

People commonly think about 5S (a place for everything, and everything in its place) in manufacturing terms: organizing and decluttering the physical space around you. That’s too limiting. It’s also the wrong focus for knowledge workers. In other words: no, it doesn’t matter where you hang your damned sweater.

Factory workers manipulate and process titanium alloys or scratch-resistant iPhone glass faces. Knowledge workers manipulate and process information. Regardless of what kind of worker you are, you need 5S to provide you with quick access to what you’re working on, and to allow you to spot abnormalities.

So, when the signal-to-noise-ratio approaches zero — when there’s just a little bit of information coming through the static, as at the consumer products company described above — you know it’s time for information 5S. It’s time to identify what information is necessary to serve the customer, make decisions, and manage the business, and eliminate the rest. Anything else may be interesting, but is ultimately irrelevant — and even worse, it sucks valuable resources into the giant maw of waste.

In my upcoming book (A Factory of One, out in December 2011) I tell the story of the nurses at the Covenant Health System in Texas. They analyzed their work and found that they spent 51% of each shift filling in forms (rather than doing something useful, like, say, taking care of patients). The vast majority of that time and effort was waste. An information 5S project cut that time in half.

Take a look at the information you create and ask others to create for you. How much of it is waste, and how much of it is value? How much of it is just “legacy work” — stuff that’s just always been done, and no one remembers why anymore — and how much of it really helps you make decisions to lead the business?

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July 2011 Newsletter

Posted July 11th, 2011

Does your work style make you a magnifying glass — focused, concentrated power — or a prism — lots of pretty colors, no heat?

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Godzilla in the corner office (part 2)

Posted July 6th, 2011

John Rowe, president and CEO of Exelon, tells this story:

In my first C.E.O. job, a young woman who worked for me walked in one day and said, “Do you know that the gossip in the office is that the way for a woman to get ahead is to wear frilly spring dresses?”

And I just looked at her and asked, “Where did this come from?”

She said: “Well, you said, ‘pretty dress’ to four women who happened to be dressed that way. And so now it’s considered policy.”

I said: “Well, it’s the furthest thing in the world from policy. I was just trying to be pleasant in the elevator.”

People hang on a leader’s every word on what seems like trivia and can resist like badgers your words when you’re really trying to say something you think is important.

I wrote about this phenomenon, which I call “Godzilla in the corner office,” before. Godzilla’s tail alone can destroy hundreds of buildings without him even realizing it, and people high up in the food chain in an organization can wreak havoc without even realizing it. John Rowe’s story is a perfect example.

You create expectations and  tacitly encourage behaviors through your own actions. Do you check your smartphone when you’re talking to a direct report? Do you arrive five minutes late to all meetings? Do you send emails on Sunday afternoons? What messages are you sending to your team? Is that what you want?

It’s ironic, of course, but people in your organization will attend closely to what seems like trivia, and ignore or resist what you think is important. This is the nature of hierarchical organizations. Recognize it, be alert to the messages you’re sending, and periodically seek honest feedback from people throughout the company. You might be surprised at what you learn.

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Go See. Ask Why. Show Respect.

Posted June 28th, 2011

In 2009 Google launched “Project Oxygen.” You probably haven’t heard of it, because it’s not a product. It’s Google’s quest to build a better boss.

In typical Google fashion, the company gathered enough data on managerial performance to float a battleship. They followed up with interviews, coded feedback, and ranked results in order of importance. What they found is music to any lean manager’s ears. Here’s how the NYTimes describes it:

Mr. Bock’s group found that technical expertise — the ability, say, to write computer code in your sleep — ranked dead last among Google’s big eight [drivers of managerial excellence]. What employees valued most were even-keeled bosses who made time for one-on-one meetings, who helped people puzzle through problems by asking questions, not dictating answers, and who took an interest in employees’ lives and careers.

“In the Google context, we’d always believed that to be a manager, particularly on the engineering side, you need to be as deep or deeper a technical expert than the people who work for you,” Mr. Bock says. “It turns out that that’s absolutely the least important thing. It’s important, but pales in comparison. Much more important is just making that connection and being accessible.”

John Shook over at the Lean Enterprise Institute has been talking about this for awhile now (most recently here). It seems so simple, doesn’t it? Go see. Ask why. Show respect.

And yet.

Even assuming that your managerial team is staffed by well-meaning people and not those who think that Mein Kampf is the sine qua non for leadership lessons, this simple activity is surprisingly difficult, for two reasons.

First, finding time to “go see” is absurdly hard. Managers and executives spend so much time cooped up in conference rooms that you’d think they were mapping the human genome, not setting the sales price for a new candy bar. Spending six hours a day stifling hypnagogic jerks in a Powerpoint-induced stupor isn’t exactly a solid foundation for a “go see” culture.

Second, we want to help. We want to solve problems. And, frankly, we like demonstrating our smarts. But in providing answers, we undermine people’s intellectual development and corrode their self-esteem, just as surely as salt air rusts the supports on a bridge. People need to stretch themselves and solve their own problems — with guidance and instruction, yes, but largely on their own. Otherwise they neither develop the capacity for learning nor the pride of accomplishment.

Your company may not be like Google (or even aspire to be like it), but good management transcends industries and idiosyncratic corporate culture. In lean terms, go see. Ask why. Show respect. In generic terms, make yourself available. Ask questions. Take an interest.

It’s really not that hard. And hey, Google has quantitative proof that it works.

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