PERCEPTION: IT’S NOT WHAT YOU THINK

Maybe each human being lives in a unique world, a private world different from those inhabited and experienced by all other humans…  If reality differs from person to person, can we speak of reality singular, or shouldn’t we really be talking about plural realities? And if there are plural realities, are some more true (more real) than others? What about the world of a schizophrenic? Maybe it’s as real as our world. Maybe we cannot say that we are in touch with reality and he is not, but should instead say, His reality is so different from ours that he can’t explain his to us, and we can’t explain ours to him. The problem, then, is that if subjective worlds are experienced too differently, there occurs a breakdown in communication … and there is the real illness.”

I read the above quote by Philip K. Dick and it reinforced how relevant perception is to change management and the importance of what we say and allow others to say.

This was first highlighted to me when I was working with IBM on the Mercedes-Benz South Africa business transformation project. In the early part of the project we spent considerable time collecting data, the bulk of which was qualitative. I asked the seasoned project manager on what basis we could rely on qualitative data to make far-reaching recommendations. His reply was: if enough people repeat something to be true, then it is true, irrespective of the facts. In other words, perception is reality.

The primary agenda of any change management program is to deliver a change in behaviour. This is equally true for very large programs such as national “Don’t Drink and Drive” campaigns to small localised programs, internal to a business, such as how to code an invoice properly. In all cases people only change when they perceive the need to change, and it is the change manager’s role to socialise a message that will create this perception at the individual level and within the crowd.

It is not difficult to determine the view of the crowd as people will readily repeat what they perceive to be a commonly held truth. It is considerably more difficult to reliably determine how an individual perceives the world as their views are coloured by an unlimited range of personal circumstances to which the change manager is not privy. Consequently, it is a waste of time to try and change an individual’s foundation perceptions.

Rather the change manager should focus on managing how individuals express their perception of the work environment and the changes within it.

The importance of managing perception is represented by the dip in the graphic.

Change curve (2)

Every business transformation project shakes up the organisation. People become uncertain and routines are disrupted. This will cause organisational performance to decline, as represented by the dip, before targeted improvements are realised. As people become disrupted they lash out in their language.

Statements such as “nothing works here” or “management are idiots” or “why bother, nobody cares” become increasingly common and indicate a low level of engagement. The less engaged a person is, the more they will resort to using sweeping statements instead of taking the time to consider what is truly bothering them before they speak. These types of statement only serve to widen and deepen the gap and make the change program appear more confronting than it actually is.

Without intervention, and without a message to the opposite, there is a real danger that the sweeping statements of an individual become the view of the crowd. It must be true if everybody is saying it. Consider a new hire stepping into that environment. What else could they realistically believe?

The change manager cannot change how a person feels. However, the change manager can change the way people express themselves.

Instead of condoning or ignoring sweeping statements such as “this software is useless” ask staff to be specific with their complaints. Persist until they come up with a specific concern like “I can’t print a copy invoice.” That is the real problem. Encouraging individuals to replace sweeping statements with specific statements will cause them to actively think about and engage with the issue. When people speak differently they allow themselves to think differently and they start to perceive the world differently. This tends to reduce emotion and exaggeration. In addition, when people know that they will be called out on a broad generalisation, they tend to become more circumspect in what they say. Eventually they may even behave differently.

From a change management point of view, it is far better for staff to know that they cannot print a copy invoice than to believe the software is completely useless. Then, when they are complaining to other staff, they will be accurate and specific, not vague and inaccurate. The crowd becomes infected with the truth, which is, in this case, that you can’t print a copy invoice, rather than by broad inaccuracies about perceived deficiencies in the software.

Only when a person changes the way they express themselves, will they really be able to change the way they perceive their work environment, and subsequently change the way they present themselves in the work environment. Occasionally you will hear that someone has had a real change of attitude. What this really means is that their language has changed, from negative to positive. When people say positive things their colleagues will respond positively.

The same can apply to the group, but to achieve it the change manager needs to introduce a common vocabulary, a company lexicon. It will promote an environment where individuals use the same words for the same things. That way everybody knows what is meant when statements are made. Conversations should get shorter and the disquiet caused by miscommunication should be reduced. Introducing a common vocabulary is exceptionally difficult. It requires that the change manager has the vocabulary to start with and a mindset that realises that change management is not just about training people in a technical skill.

I recognise, that despite the change manager’s best efforts, it is impossible to get everyone in an entire organisation to change the way they speak. The best mitigation is to introduce scorecards. Using a scorecard moves the conversation from subjective perceptions about what happened to factual data. It should cause the conversation to start with a discussion on actual business results rather than a particular person’s behaviour, or more importantly, the manager’s perception of the employee’s behaviour.

I close with the thought that trying to manage perception is similar to standing in a hall between two mirrors. Each mirror reflects the other and this continues until each mirror appears to have an infinite number of reflections in it. These reflections represent the perceptions two people could have of each other. To know which two “perceptions” are active in the conversation is impossible.

 

ORGANISATIONAL LEARNING – IT TAKES SOME TRAINING.

A factory owner was battling with productivity. He called in blue chip advisors to address the problem. They could not help. He called in specialist niche firms. They could not help. In desperation he called in a contractor he had been referred too. The contractor walked around the factory for ten minutes. He stopped at a machine and turned a screw one half turn. Productivity soared immediately. The delighted factory owner requested the invoice. It said, ‘Fee for addressing productivity issues’ – $20,000. The factory owner was astounded; $20,000 for 10 minutes work? He asked for an itemised invoice. It said; Fee for turning screw – $5. Fee for knowing which screw to turn – $19,995.

It’s an old story, but one I appreciate. It illustrates the difference between training and knowledge.

Individuals attend training and education sessions to develop their skills and knowledge. This raises the questions; 1) can individually ‘owned’ skill and knowledge be transferred to the organisation and 2) can organisations learn in their own right.

I believe the answer to both these questions is yes, but the inputs and variables for organisational learning are different to those for individuals.

Broadly speaking, (within the work context), individual learning has three inputs.

Learning1

Employee development is the partner event to the performance appraisal. Typically an employee’s performance is appraised annually and a development program is constructed to address weaknesses identified through the review. It is common that the development program is reviewed and refined quarterly while the performance review is held annually.

The intent of the development program is to build the skills of the individual. These can technical, managerial, or soft skills.

Succession management is closely related to the employee development program but the time horizon can be out 5 years and succession management will consider and include additional organisational factors.

An important distinction is that organisations can have an employee development program without having a formal succession management plan, but not vice versa.

For the purposes of this article, Personal development includes all other implicit or explicit learning an individual receives that makes them a better employee at work.

These three variables focus on the individual and collectively deliver very talented individual – who could leave the company at any time. To minimise this risk, companies pour considerable sums of money into technology under the banner of ‘knowledge management’.  I support this approach but consider this knowledge capture, not organisational learning.

Knowledge management in the form of technology and documentation will not be addressed in this document.

Organisational learning is the transfer of knowledge from the individual to the group through social interaction. You can transfer knowledge to a group, but you cannot transfer skills. Skills can only be transferred between individuals.

The most fundamental principle of organisational learning is that an organisation can only learn if it wants to.

When this is the case, an organisation will create time to learn. Creating time requires an organisation to stop ‘doing things’ and start spending time to explicitly understand what and why they are doing what they do.

A key attribute of organisations is that they don’t exist and this is particularly relevant when it comes to organisational learning. I say organisations don’t exist, as ‘organisation’ is a collective noun for a group of individuals working together for a common purpose. As a collective, organisations can only learn through social interactions of which there are two primary types:

  1. Projects
  2. Business as usual.

Projects are the traditional environment for organisational learning. Projects are where individuals’ come together to combine their individual learning to deliver an outcome that an individual could not easily deliver on their own.

Learning5

The project environment is by its nature a social environment; one where conversation is stimulated and the sharing of ideas promoted. It establishes a virtual bank of knowledge that represents the sum of all inputs. At the start of the project each member should present and teach the other team members as to how they will approach their responsibilities on the project. Then through the course of the project, each member should lead a discussion on lessons learnt to date. What has worked and what hasn’t as compared to their original presentation. The principle is that you are always learning and while these lessons are fresh in your mind, you formally share them with team. These discussions do not need to be long, but they should be formal and frequent. The audience can be restricted to the immediate group of business and project stakeholders.

This approach requires some additional project time. The project budget (time and cost) should allow for these sessions and the sponsor should accept the project will be delivered a week or two later than if you did not include these knowledge sharing activities.

If projects do not allow formal time for learning and the socialisation of the lessons, then the dissemination of knowledge is reduced to osmosis.

Business as usual differs from projects in that the social interactions are not readily recognised as organisational learning opportunities.

The primary enabler for organisational learning in the business as usual environment is the organisational approach to governance. Effective governance is characterised by structured committees and the active management of variance.

Learning2

Committees are a group of individuals meeting to discuss agenda items. Within these meetings, time should be allowed to formally reflect on lessons learnt by the committee over the last period. Depending on the committee, this reflection could happen only twice a year.

Variance management is one of the most important social interactions for organisational learning and its importance increases with seniority in the company. At the senior levels, business objectives can only be achieved through teamwork and variance to plan is a team responsibility. As you move lower down the organisation variances can be attributed to individual managers or team leaders. Notwithstanding, a variance is an opportunity to explicitly consider what went wrong and what needs to change. If these conversations are seen as a learning opportunity then organisational learning is promoted.

The exchange of ‘lessons learnt’ between the two social contexts becomes a knowledge multiplier.

Learning6

At the completion of the project ‘lessons learnt’ should be collated and formally presented to the wider stakeholder community. This will transfer knowledge to the widest group possible and help avoid a repeat of issues on the next project. Equally, ‘business as usual’ should formally present to project teams on their experience of the project and their experience on the business impact of the project.

The organisational learning environment is complete when the organisation formally recognises each component and maximises the value in the interaction between them.

Learning4

I am not suggesting that organisations learn randomly. The learning curriculum for an organisation is defined by its business strategy and the organisational capabilities required to deliver the strategy. Organisational capability is created by teams of people working together – the whole is greater than the sum of the parts.

This hierarchy has a foundation on the knowledge and skills of individuals.

Organisational learning no arrow

I close with a repetition of the most important aspect of organisation learning – organisations have to want to learn. If they do, then the above social events are the time to do it as they provide a consistent and enduring environment for active learning.

MALICIOUS COMPLIANCE – THE SMILING SERPENT

I was talking to a colleague last week over a beer. He was full of ‘disgruntle’ as he related the story of his day. Basically it went like this…

I have been working on this IT project for months, doing long days and occasional weekends. This morning I arrived at 10.15am. In front of everyone the project manager shouted at me that the project hours were 8.45am to 5pm and that I should make sure my timesheet reflected my late start. Not only was I embarrassed by the reprimand, but the project manager gave me no credit for the fact that I never left the project before 6pm – ever.

I asked him what he was going to do about it. He answer was simple – “I will work the project hours, no more, no less. Then when the project is not delivered on time, it is the PMs fault, not mine”.

At the time of writing, he has been true to his word. Working what he calls short days.

I reflected on his story and I recognised that at some point in our professional lives, we have all stood in front of a manager receiving a dressing down. Outwardly we maintained our professional demeanour, while inwardly we were seething. The situation for which we were reprimanded may have been our fault, but our motives were honourable. We were working in the best interests of the project and colleagues. In our mind the reprimand was just wrong.

After such a reprimand it is quite human to leave the manager’s office with a mindset of – stick it buddy, if you don’t want me to ‘X’, then I won’t. It’s ‘by the book’ from here on in.

For most of us the emotion subsides fairly quickly and we get on with our job recognising that we can’t please all of the people, all of the time.

The problem is that there is a minority group who do not forgive and forget quite so easily. For these people their chagrin runs deep and they cannot readily bounce back from a reprimand. These people take their ‘by the book’ vow to heart and they consciously set out to change their behaviour for the worse. Next time the manager asks them to do something they follow the instruction to the letter, entirely aware that what they were asked to do is not what the manager actually wants. They know full well that following the instruction to the letter will be counterproductive to the manager’s intent and for that reason alone, they do exactly that.

This dogmatic adherence to the exact instruction given, rather than to the intent of the instruction is termed – malicious compliance.

From a business or project point of view, malicious compliance is a treacherous form of corporate sabotage. It can be very difficult to identify and even more difficult to treat. It can manifest in many ways including; adhering strongly to shift start and stop times, not contributing to a discussion when you know the answer unless you are asked a direct question, exaggerated responses to instructions, working strictly to the agreed standard or preparing reports you know to be unnecessary or irrelevant.

Failure to identify malicious compliance can set a project back months or as I have seen in some cases, derail the project altogether. This is especially true if the ‘bad apple’ is a leader in the group. Example; If the leader starts to work to the standard hours then it won’t be long before the whole group is following suit. Equally if the leaders attitude goes unchecked, it won’t be long before the whole group is grumbling and questioning the authority and leadership of the (project) manager. This can force an unplanned change of management as that becomes the only option to bring the situation back to normal. This in turn could unfortunately reinforce the negative behaviour of the employee or group and it may be some time before management is able to get the balance of power back.

The trigger for resorting to malicious compliance will vary by individual and includes everything from an individuals need to implement a machiavel private political agenda of destabilisation to those who are suffering change fatigue and need to resort to doing the minimum just to get by.

I consider those who are machiavel to be a smiling serpent. They smile to your face while sabotaging your project. They have perfected the art of hiding in the open.

For an employee to be maliciously compliant requires the employee’s manager to know that the employee could do a better job if they wanted to. It is a case of ‘can but won’t’ as opposed to ‘can’t and won’t’. The difference between the two is motivation. The formers motivation will always be negative and the latters could be neutral or positive.

Most people cannot ‘maintain the rage’ for long and generally do not require remedial action beyond possibly having a chat with them after the emotion has passed. For this majority, bouts of malicious compliance should be seen as part of the process of building corporate experience and maturing as a professionals – Learning that you can get angry and then get over it.

For the few that do persevere with malicious compliance there are three remedies:

  1. Discuss outcomes and show belief in the person.
  2. Give short instructions.
  3. Critically listen to the employee.

Moving the discussion to outcomes forces the staff member to answer the – so what – question.

“You fulfilled the instruction – so what. What did you achieve”?

Forcing the employee to confront their contribution, or lack thereof, is a powerful means of communicating that malicious compliance cannot produce satisfactory results and that obvious and continued mediocrity cannot be ignored by either party. Both need to take action.

By definition, malicious compliance is a conscious choice. The employee chooses to behave in this manner. Therefore, they can choose to relax their stance as well. In remedy 1 above, I mention that the manager should show belief in the person. This is especially important when the employee cannot see a way out of the situation they have created. By accepting their justifications at face value and showing belief in them as a person, the manager allows the person to ‘save face’. This gives the person room to move, to adjust their behaviour without having to fully admit fault. It should lead to the return of an acceptable level of output and behaviour.

As part of the addressing the issue, the manager should give the employee short and simple instructions where the deliverable is easily identifiable and within a short timeframe. This allows the employee to build success upon success and to receive positive feedback frequently. It will help to mitigate any self-esteem issues the person may have.

Equally, these two remedies will provide the manager with the sufficient case study material should it become necessary to begin a job transfer or termination procedure. Because – if you can’t change the people, then change the people.

The third remedy is to critically listen to the employee. If the employee is a person with obvious skills and talent who is in effect dumbing themselves down to conform to the instructions, then the manager must evaluate who is the dogmatic party. This is particularly true when a manager is dealing with a highly experienced technical person. In this case the manager may not fully understand the technical answers given to their questions and therefore they inappropriately instruct the technician into a course of action the technician knows to be wrong. The technician is unable to get the manager to understand the error in the instruction so they throw up their hands and say – “It’s not my problem, I will do what I am told”.

With thanks to Kailash Krishnan for his comments on the early draft.

MANAGING RISK, A TRIGGER FOR CHANGE

Having spent considerable time on business transformation projects I can say with a high degree of confidence that the discipline of change management is becoming so watered down it is at risk of becoming more of a catch phrase than a serious discipline. The term is bandied about freely whenever a project is discussed without any real thought of what it will mean for the project. When project concerns are raised, the response is frequently along the lines of – that’s a change management issue or ‘we will ask the change manager to deal with that’.

The upshot is; for any given project, change management is treated as a ‘catch-all bucket’. Having said that, in many respects, this position is acceptable as the primary deliverable from almost every project is a change in behaviour at the individual and collective level.

The problem therefore becomes – for each project, how do you create a common understanding of what change management means for that specific project.

Recently I was asked to prepare a project initiation document (PID) for a client, working off their template. The template included all the standard headers such as objectives, scope, risk management, change management, budget and timeline.

This got me turning over an old chestnut of mine; what’s the difference between risk and change management.

My view is that the major reason to employ a change manager on any project is to mitigate risk and the biggest risks on any project are those represented by stakeholder behaviour. This includes scenarios where stakeholders:

  1. Do not embrace the need for the project
  2. Do not accept the deliverables of the project
  3. Cannot / will not work with the deliverables of the project.

Consider the last PID or Statement of Work (SOW) you prepared or read. It probably had a risk section with a structure and text similar to this one. The table (sanitised) is a mix of actual examples from various clients.

Risk table (4)

Column one describes the risk and column four details what can be done to avoid it becoming an issue. Columns 2 and 3 are used to rate the severity of the risk threat.

To mitigate these risks, change managers are engaged. Therefore by extension, change managers are risk managers.

Now compare the table to the following typical position description for a change manager:

This position reports to the xx manager or executive and will be instrumental in providing change management expertise in support of organisation-wide business transformation, process reengineering and resulting system developments. The primary focus will be creating and implementing change management plans to maximise employee engagement and proactively manage employee and client resistance. The change management specialist will act as a coach for senior leaders and executives in helping them fulfil the role of change sponsor and will support project teams in integrating change management activities into their project plans. The role will involve liaising at all levels across business units to analyse and effectively develop, deliver and embed change management solutions in line with commercial objectives.

Quite clearly, there are overlaps between the risk mitigation actions and the change management position description. This raises the following fundamental question:

Why do change managers not formally link their change management plans to the risk register.

By way of example here is a change management plan I chose at random from a Google search.

http://tiny.cc/n4nj1w

Change Management Plan

 

 

This is a typical example of a change management plan. At a concept level I immediately question why a change management plan needs to exist as a separate document from the PID. However, if it is to be a stand-alone document, then there is no heading I would delete.

At no stage in completing the template is the author expected to link the change management plan to project risks. In fact, the word ‘risk’ appears only once in the template where the author is expected to describe risks to the change management process.

Based on this template, how can the project sponsor build confidence that project risks are being mitigated or that the change management activities will have any relevance to the risks at all.

My observation is that a risk register is typically prepared at the start of a project and then is really only given lip service through the course of the project. If the project manager does happen to review the register, then it’s likely that the participants in the review meeting will readily explain how the risks are being managed and all is good. No panic required.

Equally and by contrast, my view is that change managers frequently start a project with a comparatively light definition of their project activities. Often with no more detail than the position description referred to above, supplemented with some reference to change activities such as weekly communications broadcasts, training plans, status reports, town hall meetings etc. Most likely they will have ‘copy & pasted’ the relevant parts of the PID into the change management plan, if one exists at all. Then when the projects gets going they generally make it up as they go, using best and last experience as a guide.

My recommendation is that change management plans are retired as a separate document, replaced by the PID or SOW and that the role of the risk register is redefined so that it becomes a change management plan.

Risk with change (4)

This will ensure that:

  1. Risk mitigation strategies are better thought through
  2. Change management is better aligned to the project
  3. Change managers understand their responsibilities more clearly
  4. Risks are continuously and actively managed, and
  5. Project managers will have a structured means of evaluating the effectiveness of the change management aspect of the project.

Let me have your thoughts.

GETTING THE MEASURE OF KPI’s

I was talking to a client about KPIs and they passed me a large bound booklet. It must have been 200 pages. The booklet was their operations report; a compendium of KPIs. I was asked if I could assist to determine new KPIs to address performance issues within the business. I flicked through the booklet. It was filled with red and green status indicators. Mostly red. I handed the booklet back to the client and apologised – I could not help him. I pointed out that the book already held more KPIs than I could possibly think of, and that the problem was not the absence of a specific KPI, but rather the absence of response to the existing KPIs.

To elaborate this point I turned to a page at random. The three monthly trend showed three months of ‘red’. This was largely the same for all the indicators on the page. The KPI’s had been indicating an out of tolerance position for months and nothing had been done about it.

The conversation then moved to discussing the purpose of KPIs and how to make them effective in the business.

Frequently when first implementing KPI’s, the mindset is to measure everything that moves; if it doesn’t move, kick it until it does and then measure it. Unfortunately, within a couple of months, many KPIs will be found to offer so little value that they are ignored. This sends a message to managers – that it’s all talk and no action – and the slide to indifference starts.

There is only one reason to implement KPIs and that is to manage behaviour. Equally there is only one type of behaviour in an organisation and that is human behaviour. Companies don’t behave, technology does not behave, plant and equipment does not behave. People behave. But what do KPIs measure. They measure customer satisfaction, mileage on trucks, lost sales, revenues, costs, throughput, quality and productivity. The list is endless.

The underlying principle of a KPI is – if you are going to manage it, then measure it, otherwise ignore it. There is no point in measuring something you are not going to manage. To address an indicator that is out of tolerance somebody somewhere in the organisation has to do something differently. Different to what they did last time because last time they created an out of tolerance result.

The difficulty arises when the KPIs are too broad in their definition. For example; sales are down so salespeople are told to ‘get out there’ and work harder. But does the salesperson know what to do differently to improve their sales figures. Clearly their current approach is not working. They need to ask themselves – what must I do differently to ensure I get a different result – or in other words how must I change my behaviour.

The astute sales manager will know exactly what behaviours are required to make even an inept salesperson successful and they will implement KPIs that evaluate this behaviour at the micro level. The focus will be on things that the manager can actually change. This could be number of calls made, length of calls, number of times the salesperson gets through to the decision maker, appointments set and the number of times a salespersons telephone rings.

The misconception is that sales managers are in sales, or more broadly, that managers of a function are in that function. Truth is they are not. They are in a separate function called management and managers behave differently to workers (staff). Therefore the KPIs that measure a managers’ behaviour must be different to those that measure staff behaviour – even if they appear to be in the same function.

The seniority between managers introduces additional complexities.

Consider the following four relationships.

The first relationship is between first line management and staff. A key feature of this relationship is that the two roles are different. Broadly, staff deliver technical output while managers deliver an administrative output. This requires that the manager use KPIs that measure ‘technical behaviour‘.

Mgt to Staff

The second relationship is between a manager who manages workers and his/her manager. 

Mgt to Senior Mgt

 The next level is the relationship between two levels of management where neither level is managing workers.

Senior Mgt to Exec Mgt

The key feature of the previous two levels is that management is managing management. This requires the use of KPI’s that measure ‘management behaviour‘. The KPIs for each level can largely be the same, separated by the degree of aggregation applied to the more senior of the roles.

The fourth level is the relationship between directors and managers. In many respects this relationship is similar to the first level of management. From a directors point of view, business management is ‘technical delivery’ whilst directors take more of a deterministic/directive role in the organisation in that they determine strategy, the governance model, the organisational risk appetite etc.

Exec Mgt to Directors

For each relationship set, what is the role of the senior manager. This is a complex question and not easily answered in a short paragraph. But in the spirit of this article I will say; it is to ensure that direct reports are behaving in a manner that maximises the likelihood of them achieving their KPIs.

Based on this definition, for each relationship, it is mandatory that the senior of the two managers knows what behaviour is required to maximise the business benefit possible from the subordinate management function, and what behavioural changes are required when the expected business benefit is not realised.

If the relationship between the KPI and behaviour is not understood or if a KPI cannot be manipulated through changes in a managers behaviour then it is likely that the wrong KPI is been used.

WHY ENTREPRENEURS NEED TO BATH

Entrepreneurship – the act and art of being an entrepreneur  (Source:Wikipedia).

When I was growing up my dad told me a lot of things. Most of it passed me by as I already ‘knew’ everything there was to know on the subject or because it was father telling me. There were however, two messages that stuck and have remained front of mind throughout my professional life.

The first was the story of how he came to run his own business. Basically it went like this….

I used to come home at night and lie in the bath and think about the problems I was dealing with at work. One day I  realised that it was my bath and if I was to worry about anyone’s problems while I was in my own bath, then they should be mine. While I am worrying about my company’s problems I am not worrying about my own”.

Based on this realisation he quit his job.

He went on to say

“Nothing gets you focused on your own problems like having two young kids and no income. Now when I lie in my bath at night I worry about my problems and how I am building a life for my family”

He tried real estate sales and a couple of other ventures. Then he met a chap who had some great software but no sales. Together they built a successful software services business and he retired with peace of mind that he had looked after his family.

Over the years, there were a few variations of the story and each time he would conclude with the assertion – when you lie in your bath at night, make sure you know whose problems you are thinking of.

The second message he left me with was that the word “creative” lacked a second “C”. That it really should be called creaCtive – a mix between the words ‘active’ and creative. There is no point in being creative if you do not act on your thoughts.

I consider these two bits of wisdom to be some of the best I have ever received.

The message is simple for would be self employed entrepreneurs – worry about your own problems and do something about them.

For the internal entrepreneur it gets a bit more complex. Bath time becomes the time when the manager steps back from the desk and actively considers how the function they are managing contributes to the overall business. Bath time is the time needed to reflect and look for the insights that other people are not seeing.  Looking at problems from different angles.

It is very easy and somewhat lazy to let the routine of day to day business suck you in and to allow yourself to be controlled by your diary. When I ask managers to show me the documents they use to manage their business process, they frequently refer me to their dairy. A dairy manages time, not the business. How often do you say or hear – “I don’t have time to think”. Does this mean that you don’t have time to actively evaluate your contribution to the business?

Without making time to work on the business a manager can find themselves moving from meeting to meeting, having significant discussions but not necessarily achieving much. This is where creactivity must meet entrepreneurialism. You cannot be entrepreneurial without action. You cannot be entrepreneurial and stay in the crowd.

 As an employee, acting on your ideas is difficult.  It is likely that a manager does not have the mandate to implement big ideas (as opposed to incremental change) and ‘making it happen’ will require an enormous amount of creactivity. Change management becomes vital for success. In this instance I define change management as the internal socialisation and lobbying of the idea. As a self-employed manager, you are entitled to implement whatever decision you choose. As an employed manager, you need the support of the senior executives or directors.

To be successful as an internal entrepreneur requires that the manager is very clear on the answer to the question – ‘am I addressing a symptom or a primary issue’?

But how do you know. If you are not part of the senior leadership team you may not be privy to the more fundamental issues facing the company.  In this case you need to be equally clear on the following change management questions:

  • who will support the idea for implementation
  • will take responsibility for the activity
  • what does success look like
  • who will gain from the experience
  • who will own the risk?

Being clear on the answers to these questions will significantly improve the way you communicate and market the idea within the company. You may ask yourself – why should I bother; I have a good idea and if the company is not interested then that’s the company’s problem, not mine.

Being and entrepreneur is not easy. If you are happy being a good employee, then turn up every day and do a professional job. Write your ideas down on an email and move on. If you want more, if you want to make a big contribution to the growth of the company,  then you need to look at the business as if it were your own and take time to think about the big picture. Bath time is a good time to do this. So is mowing lawn or any other time when you can be alone with your thoughts.

How do you start – draw a picture, write up a mock marketing brochure. Not a PowerPoint slide pack, but a proper A4 brochure that describes your idea. Keep it to one page. It is not a technical document. It’s a marketing document. If you can express your idea on one page and include a picture, then you are well on your way to making a great start to commercialising your idea.

SHOW ME THE MONEY

Recently I spent a morning with a colleague discussing ideas for a new business. He is working on a number of excellent business models and if he can commercialise them, he should do very well.

He asked if I could assist him to “clear his head.” He was too close to the detail and the ideas and concepts were beginning to blur.

My immediate suggestions were:

1.   Draw the business.

2.   Follow the money.

We spent the next two hours on  exactly these two points. What  he initially thought  was a simple question, and one that  he already had straight in his head, proved to be quite complex. It is amazing how a person can jump large chasms in a single bound in his/her head.

Our conversation produced a new and annotated picture of the proposed business depicting how it would work and the flow of money. It was completely different to  the  picture he initially had  in  his head and it  substantially changed the  business case and  intended  architecture. Importantly it resolved a number of the mental blocks he had about the business. The blocks existed as subconsciously he knew there were issues; he just could not articulate where. Following the money is a sure way of resolving this problem.

This same difficulty constantly plays out on a large scale with my clients. As a consultant, I am frequently engaged to  prepare process models, maps and related material. The conversation generally  revolves around the relationship between people, process and technology and is often interlaced with the phrase “shared service.” 

What I battle to understand is this: why, despite engaging consultants to investigate the business, are managers so reluctant to engage with the detail? Businesses are complex, but managers just don’t seem to want to know.

To  further illustrate this point,  the next graphic is an example of a detailed process map. Call it “Process 1.” I do not expect managers to invest significant time at this level of detail. That is, managers other than the process owner.

process flow

Occasionally, an individual process map will include a reference to the next process in the sequence. More often than not, the process just ends with a box that says “post invoice” or “file letter” or “pay supplier.” That’s it. Process over.

This style of process mapping has little bearing on reality. Activity very seldom just stops in a business. Rather there is a handover to the next department or process. Everybody knows this and automatically accepts that this detail is just not included on individual process maps.

But, when that process map is placed in conjunction with other processes on the value chain, it offers limited insight. When the same process is shown inclusive of its relationships to other processes the value of the analysis goes up significantly. Consider the next two graphics.

 SHARED SERVICES NO LINES  SHARED SERVICES LINED

The  first  graphic shows what processes sit where on  the  framework. The  second graphic  shows the relationships between them. The interconnecting lines represent the hand off between processes and the flow of information within the business.

The  top  row of each graphic represents the  functions and  processes that generate revenue. This row answers the question, “How do I make money?” The middle row comprises the processes that support revenue generation. These processes are not  customer facing and  exist only because revenue is flowing. The bottom row comprises the processes that must exist for the company to be in business, in other words, the true back office.

Rows 2 and 3 tend to be the areas where you spend money. In rough terms row 2 goes to gross contribution and row 3 to operating expenses.

The layout is a great way to “show me the money.” It tells you which processes result in revenue and how and where the invoice is generated. It also provides a foundation for determining which processes belong in the shared services group and the basic configuration of that group. By extension it supports the demarcation of service level agreements  and key performance indicators.

A simple critique of the graphic demonstrates that there is possibly a significant gap in the revenue flow.

sHARED SERVICES CRITIQUED

Within the circle there is no output process for the third process. It is a revenue generating process but it is almost 100% independent of all other processes. This can’t be right. Equally getting to its trigger process seems somewhat convoluted.

This insight is enormously valuable, especially  if a company wants to implement or refine a shared services model.

If this reasonably simple diagram produces this type of value, why then are managers reluctant to engage in the detail? Without the detail the above issue would not be exposed. Yet it can easily be consulting suicide to put the graphic up for comment. There is a good chance you will hear, “It’s too complex, and I can’t understand it.” So you “dumb it down” to a point where it fits on a slide and uses large font.

I fully acknowledge there is a time and a place for getting into the detail and presentations should be tailored to the audience.

I  close with  the  comment  that  businesses are  complex places and managers should make the effort and take the time to understand them. At the very minimum they should understand the flow of money. Where is it generated? Where and when it is invoiced? And how is it spent? Not necessarily at the fine detail level, but most certainly at the building block level.