Smaller, Flatter, Faster. Is The Two Pizza Team Finally Going Mainstream?

This weeks post looks at the two pizza team which was popularised by Jeff Bezos.

In the early days of Amazon he instituted a rule that every internal team should be small enough that it could be fed with two pizzas.
The goal was, like almost everything Amazon does, focused on two aims: efficiency and scalability.

Is it finally the time that our organisations will make the shift to smaller teams, not just because of financial savings, but because of their increased effectiveness and productivity?

Read the post by clicking the link. And if you like it I’d really appreciate a share on your social network of choice.

Have a great weekend!

Best wishes

Paul

The latest cartoon by Tom Fishburne seems to sum up what a lot of people are feeling right now. As he writes, “In a chaotic year, many brands and businesses are relying on adrenaline only. Organizations can only run on those fumes for so long. Adrenaline-based speed can lead to burnout.”

I’d argue that we are not seeing speed as much as lots of activity. Organisations are busy , sure , but it’s a reflexive response to an era in which they have no control over anything , even down to when and where people work. In organisational design terms – we are all still out there panic buying toilet rolls and hand sanitiser.

One of the issues here is that legacy organisations are not designed for speed, it’s just not what they do. Many people who have set up internal accelerators or innovation labs ultimately fail as they run up against hard wired bureaucracy and hierarchy purposefully designed to crush any ideas that threaten the status quo.

In their report , Reinventing the organisation for speed in the post COVID era , McKinsey note that CEOs recognize the need to shift from adrenaline-based speed during COVID-19 to speed by design for the long run.

It calls for work to speed up in three ways:

Sped up and delegated decision making.  This means fewer meetings and fewer decision makers in each meeting. They point out that some organisations are adopting a “nine on a videoconference” principle. (I’d suggest this is still a couple too many). Others are moving towards one to two-page documents rather than reports or lengthy PowerPoint decks.

Step up execution excellence. Just because the times are fraught does not mean that leaders need to tighten control and micromanage execution. Rather the opposite. Because conditions are so difficult, frontline employees need to take on more responsibility for execution, action, and collaboration.

Cultivate extraordinary partnerships. Working with partners is routine. But the speed of action only goes so far if other players in the ecosystem fail to move just as fast. The connected world is breaking down the traditional boundaries between buyers and suppliers, manufacturers and distributors, and employers and employees.

The building blocks at the base of all these things are , guess what, small empowered teams.

Is it finally the time that our organisations will make the shift to smaller teams, not just because of financial savings, but because of their increased effectiveness and productivity?

I’ve been an advocate of a the minimum viable team for a number of years. The concept of as few as people as possible – small enough to be fed on two pizzas, is attractive because it reduces social loafing and allows us to get off the hamster wheel of management and ‘work about work’. Once you’ve done it and moved away from managing lots of people it would take an almighty pay rise to tempt you back.

The Two Pizza Team was popularised by Jeff Bezos who in the early days of Amazon instituted a rule that every internal team should be small enough that it could be fed with two pizzas. The goal was, like almost everything Amazon does, focused on two aims: efficiency and scalability.

Its roots lie in the concept of the Minimum Viable Team which recognises that many companies spend an awfully long time thinking and planning to do something: longer than it takes to actually do the thing. It’s built on the premise of Parkinson’s Law – that work just expands to fill the time and resources available. The MVT idea is rather than layer on additional resources (that are ultimately wasteful) , you “starve” the team and make them pull only the necessary resources as and when they need them. 

Most organisations reserve this structure, if they use it at all, for either DevOps type environments or hipster design or innovation teams. However it has a sound evidence base – after devoting nearly 50 years to the study of team performance, the Harvard researcher J. Richard Hackman concluded that four to six is the optimal number of members for a project team and no work team should have more than 10 members.

How many project teams do you know that have four to six members?

Remote work exacerbates this problem. It’s hard enough to run productive in-person meetings with lots of people in the best of times, but trying to foster engaging discussions with lots of virtual participants is nearly impossible.

Despite the rhetoric of agile small teams – the shift won’t happen overnight as there’s a genuine question about what to do with all the people you might not need. I’d argue that post- COVID the immediate challenge is how we slow down to speed up.

We are in a new world with new challenges and we sometimes confuse operational speed (moving quickly) with strategic speed (reducing the time it takes to deliver value)—and the two concepts are very different. The more you can reduce organisational initiatives to a few key problems the more you can bridge the gap.

Do Fewer Things, Better. And Faster

No organisation, large or small, can manage more than five or six goals and priorities without becoming unfocused and ineffective, and it’s exactly the same for us as people.

The best organisations don’t try and do everything. They focus on a few differentiating capabilities — the things they do better than any other company.

This is not an either/or. IF we can reduce our priorities to a few key goals AND make small focussed teams the default way we operate , arguably we’d be a lot happier, healthier and more productive.


Photo by Erik Mclean on Unsplash

Do You Really Know What Is Going On In Your Organisation?

We are at an inflection point:

When it comes to workplace culture, there is a large gap between what leaders think is going on and what employees say is happening on the ground.

The Hidden Value Of Culture Makers

According to the latest Accenture report – two thirds of leaders feel they create empowering environments—in which employees can be themselves, raise concerns and innovate without fear of failure— but only one third of employees agree.

This perception gap has consequences for both colleagues and customers. It results in a kind of organisational drift – an ever widening gap between what processes say should happen, and what actually happens. ‘Work as imagined by management’ versus ‘Work as is actually done by colleagues’.

In a steep hierarchy it is a happier and happier story that reaches the top ranks

Robert I. Sutton

If you just hang around organisations and watch and listen you have a much clearer picture of how things really work than you do by reading a board report or press release.

I was recently in hospital for an 11 day period, and after a while you begin to be part of the furniture – and are exposed to all sorts of unguarded conversations from staff. I’d say I had a pretty good insight into how people felt about how the trust was coping with Coronavirus and PPE supplies. A better insight than I’d get from official channels that’s for sure.

Credit: Virpi Oinonen

The concept of the ‘iceberg of ignorance’ – that most problems in organisations are invisible to leaders, and therefore unsolvable – was popularised by Sidney Yoshida in the late 1980’s.  Whether or not the numbers are correct ( I’d suggest that executives see a lot more than 4% of the problems or even see entirely different challenges ) it remains a useful metaphor.

‘Clowns Supervised By Monkeys’ – Lessons From Boeing

On 10 March 2019 Ethiopian Airlines Flight 302 crashed just minutes after takeoff and killed all 157 people on board. The circumstances echoed an accident the previous October in which another 737 operated by Lion Air, an Indonesian carrier, had crashed and killed 189 people.

For Boeing the fatal crashes of two of its new 737 Max jets was about to shine a light on a corporate culture which had prioritised production speed over quality and safety.

The redacted emails (you can read herehere, and here) that come from documents Boeing sent to Congress show a culture in which everyone was talking about problems , but no-one was solving them.

According to Peter DeFazio the Congressman who led the investigation into the development of the 737 Max the messages “paint a deeply disturbing picture of the lengths Boeing was apparently willing to go to in order to evade scrutiny from regulators, flight crews and the flying public even as its own employees were sounding alarms internally.”

It’s too easy to blame this type of scenario on one person. This is a complex problem that involves more than just the CEO. Indeed, organisational systems and cultures often prevent people speaking truth to power, even if the ultimate boss is willing to listen. I once worked with a leader whose entire organisational department were told in explicit terms that ‘dirty linen was not to be washed in public’. Whatever the flaws and screw ups of the business unit – none of it would make it beyond the local management team.

As Amy C. Edmondson has written , the absence of psychological safety — the assurance that someone can speak up, offer ideas, point out problems, or deliver bad news without fear of retribution — can lead to disastrous results.

Most of our organisational disasters don’t kill people – they just waste people’s time. All of us have worked in organisations where large change or transformation projects have either failed completely or failed to deliver the intended results. I’m willing to bet that failure was not a surprise to you or any of your colleagues.

Why is this so common?

In psychology, there is a phenomenon called the Bystander Effect where individuals are less likely to offer help to a victim when other people are present. Indeed, the likelihood of someone taking action in a particular setting is inversely proportional to the number of people present.

The same rule holds true in most companies. Imagine a scenario where most of an organisation has the roughly the same view on the set of things that ought to be done to improve performance. Why are these changes not immediately adopted?

There’s a complex mix of reasons people walk on by – and it’s a never ending leadership task to understand why and reduce barriers to personal empowerment.

Post-COVID – Walking The Virtual Floor

It’s now almost certain that we’ll never return to the same office life that existed before. Of course we will see some go back to their default and be happy to be back in a physical office together again, but we’ll also see the other end of the spectrum where the prospects of huge savings in capital expenditure and zero travel costs lead to a default remote working plan.

This places a challenge and an opportunity:

  • How do you pick up the weak signals of emerging problems in a majority remote workforce?
  • How do you have water cooler conversations when the water cooler no longer exists?

There’s no silver bullet here. The best bosses are those who know that they are always prone to discovering blind spots about themselves, their colleagues, and problems in the organisation. They work to minimise these blind spots by remaining curious, visible and actively seeking out feedback.

When management talks about the challenges of remote work it often focuses inside out:

  • How do you give feedback virtually?
  • How do you communicate effectively?

The problem we must overcome is exactly the opposite.

  • How do you sense, listen and respond in a digital world?
  • How do you create psychologically safe virtual spaces where people can speak truth to power?

Most of us, if we are honest, choose to stay silent on some of the most obvious changes that our organisations should make. We can all be bystanders – but we don’t have to be.

Do we really know what’s happening in our own organisation? Probably not as much as we could or indeed, should.


Image by StockSnap from Pixabay

(Note: there is conjecture that the Yoshida paper, and the conference that he purportedly presented it to, is an urban myth )

The Way We Work Isn’t Working

The office, after management, is arguably the biggest inefficiency tax that organisations layer over themselves.

They cost huge amounts to procure and maintain, they become an all too convenient base for meetings (another inefficiency tax), and they set a precedent for the expected hours that people are meant to work.

Offices promote lengthy commuting which has consequences for both the environment and our own mental health. A recent study found that just a 20-minute increase in commute time is equivalent to getting a 19% pay cut for job satisfaction.

Most importantly – our workspaces have a productivity problem.

Despite technology which previous generations could only dream of we’ve never felt so unproductive at work.

What’s the problem here?

A recent report from Asana finds that employees spend nearly two-thirds of their day on “work about work”. Constant emails, message notifications, and unexpected meetings consume the best part of most days.

Over 10,000 people were interviewed globally and there’s some significant findings:

  • The majority of respondents’ time (60%) is spent on work coordination, leaving just 27% for the skill-based job they were recruited to do.
  • Responding to a constant barrage of emails and notifications is the primary reason that nearly one-third of employees regularly log extra hours, followed by unexpected meetings and chasing people for input or approval.
  • Respondents surveyed believe that nearly two-thirds of meetings are unnecessary.
  • Over 10 percent of an employee’s day – 4 hours and 38 minutes per week – is spent on tasks that have already been completed. This amounts to more than 200 hours of duplicated effort and wasted efficiency annually.
  • Less than half (46%) of respondents surveyed clearly understand how their output contributes to the achievement of their organization’s objectives and mission.

Screenshot 2020-03-08 at 10.32.27

It’s astonishing to me that this isn’t bigger news within organisations – the cost of unproductive downtime plus the wellbeing impact is mind boggling.

Parkinson’s Law. Work expands to fit the time available for its completion

In a post that is more relevant than ever Chris Bolton asks why do we waste so much time on trivial things in work? One of the reasons is our tendency to hoard unnecessary resources – to fill work with work.

“The basic theory is that an individual within a large administrative organisation will reach a point in their career where things start to get a bit ‘too much’ for them. Rather than leave the job or share it with anyone else, they make the case for acquiring subordinates. Subordinates will lead to more subordinates and eventually there is a department to manage. However, the quantity of real work hasn’t actually increased very much (if at all).”

Brooks’s law – Adding manpower to a late project makes it later

The ways most organisations respond to a new circumstance is simple: hire more resources. Even though everyone knows that throwing more resources at things is the very worst thing you could do.

The growth of ‘work about work’ seems unstoppable.

As Gary Hamel has explained – a small organisation might start off simply – one manager and 10 employees.  But as it grows it will often keep this ratio and sometimes reduce it. So an organisation with 100,000 employees will have at least 11,111 managers. Because an additional 1,111 managers will be needed to manage the managers.

And that’s before you go near management related functions whose entire function is , well , management.

The constant interruptions to our work day means very few of us spend time in a state of flow. Flow, a state of consciousness where we feel our best and perform our best, is the most desirable work state on earth, but it’s also the most elusive.  According to Steven Kotler , the average person spends less than 5% of their day in flow. If you could increase that to 15%, overall workplace productivity would double.

What’s the solution here?

Arguably we are into wicked problem territory – with a complex web of technology, management and bureaucracy.

Screenshot 2020-03-08 at 11.30.48

In the report Asana naturally put a lot of emphasis on the role technology could play – and they are right – it is ridiculous that in 2020 colleagues are duplicating effort on the same tasks. The tools are here to design that out today.

I’d go further and suggest that every manager should attend productivity training on an annual basis – and be assessed at their competence at using collaborative tools.

We also need to challenge our culture of busyness which worships at The Altar Of Having Too Much To Do.

We haven’t got too much to do – we’ve got too much ‘work about work’.  And the onus is on each and everyone of us to fight it.


 

 

The Asana Anatomy of Work Report can be downloaded here 

How Technology Can Increase Collaboration And Build Trust

This post is an shortened version of a plenary talk delivered in Cardiff for the Wales Audit Office 


Depending on your age it’s likely that the two things you were not taught in school were:

a) how to collaborate effectively

and

b) how to use technology to connect and share with others

And yet these – the essential skills of the digital economy – are hardly ever talked about, much less taught and promoted, in our places of work.

Our 21st century economy demands workers excel at collaborating through technology, but as employers we struggle to work out how to equip our people with these vital skills.

There’s a reason for this of course, most of our organisations are still obsessed with organising ourselves into neat little directorates with clear accountabilities and reporting lines. This creates a very efficient looking functional silo system – encouraging employees to stay in their lane and get things done.

However in a digital economy we can no longer afford to think in conventional terms of efficiency. The more interdependent the world becomes, the less it needs lone problem solvers and the more it needs great collaborators and orchestrators. How to collaborate productively is a skill we all need to learn as it’s essential to our having greater impact in the digital world.

Problem-solving, creative thinking, digital skills and collaboration are in greater need every year yet are not the focus of our learning and development.

We still spend most of our time and resources on leaders. This incessant focus on ‘leading’ ‘and ‘leadership’ is actually a throwback to an industrial model and unwittingly acts against collaboration. When we continually promote the importance of leaders we imply that they are ones to take charge of situations.  They are the the ones to sort our problems out.

However, this concept of the heroic leader is fundamentally anti-collaborative as it compels those being ‘led’ to be submissive and unquestioning.

How can our organisations become more collaborative? 

Ultimately , we’ll only build collaborative organisations if we design them that way.

At its best, collaboration in the workplace can help people think more deeply and creatively about a subject and develop more empathy for others’ perspectives. It can boost productivity and innovation and create better workplace engagement.

But, it takes time and requires space and patience. And – it’s incompatible with cultures built on ego and fiefdoms.

As I’ve written previously, if we don’t teach, measure, encourage or reward collaboration it doesn’t tend to happen.

At Bromford we’ve begun the process of democratising innovation and design by training all our colleagues in collaborative problem solving and cross-team working. It won’t happen overnight, but it’s supported by an organisational DNA that has a design thinking – and hence a collaborative – mindset at its core.

How technology can increase collaboration and build trust

What are the challenges?

The technology is there to enable cross-team, cross-sector, and cross-country collaboration. Much of it is free to use.

Legacy thinking is more of a barrier to this than legacy IT.

We still have a tiny percentage of leaders who are really living a digital lifestyle. There are still relatively few having open debates , showing transparency in public discourse , answering questions online and sharing progress.

Too many of us are hiding behind unfounded concerns about data privacy and fear of working in the open.

We need to teach and support people how to make the best use of social technologies to connect and collaborate at scale.

What are the opportunities? 

For the first time in history, we now have the ability to ‘go beyond’ our organisational boundaries, connecting and sharing with the public and each other.

The basic unit of innovation is not a creative individual, nor even a team, but a creative community.

Millions of people connected without hierarchy and working together to solve some of our biggest challenges. This provides the opportunity for a 10x improvement in our communities. 

For organisations and systems that are used to ‘providing services’ rather than ‘connecting people’ that’s clearly a challenge  – but it is one we can and must step up to.

We can’t change the world on our own. We need to build movements.

Why Do We Hate Our Offices?

If you are working in an office today you will be interrupted – or you will interrupt yourself – every 3 minutes.

And what’s worse is it will take most of us up to 23 minutes to recover from that distraction.

If your boss lets you, go home. Walking out the office door is likely to be the single most productive decision you’ll make this year.

It’s not hard to see why we dislike our workspaces and what they bring us:

  1. About 11 million meetings are held on average every single day, with employees in the US attending about 62 meetings every month.
  2. British workers spend 492 days of their lives travelling to work, spending over £800 every year.
  3. A survey of British workers, published in June, found that those in a hot-desking office took an average of 18 minutes to find a seat.
  4. The average professional spends a third of each work day reading and answering email, according to a McKinsey analysis. And 62% of that email is not even important.

On top of this the actual design of our workspaces is mostly poor. Whilst the technology we use is unrecognisable from 15 years ago, the places we work from haven’t really developed.

How The Open Office Came To Rule The World

In 1958, an art professor named Robert Propst set out to design the office to rule them all. He had researched the habits of office workers, including what made them inefficient, what they liked and disliked, how often they moved from their desks.

He monitored every wasted second—in the hope that he might save us all, not by leadership, but by design.

Typically, he observed the the manager in a corner office and the majority of workers at open desks that were arranged in static lines, with very little consideration for any form of privacy, storage or intrusion.

The ‘action office’ he invented was intended to take us away from the distractions of open environments, and give us a semi private space we could decorate with photographs and other items. It was an ‘office’ for those of us who were not important enough to warrant a real office of our own.

It wasn’t the fault of Propst, but his original designs came to be dumbed down and the mutated into the cubicle, which came to visually represent the office silo, banks of workers not talking to one another.

We needed a solution, an open office that made us collaborate and communicate with our colleagues.

 

chartoftheday_17356_work_distractions_n

The pursuit of increased workplace collaboration led managers to transform cubicle offices into ‘open’, transparency-enhancing spaces with fewer walls, doors and other spatial boundaries. However, research by the Royal Society shows that open plan offices do not build teams or increase collaboration.

The reason why we don’t collaborate is far more complex. If we don’t teach, measure, encourage or reward collaboration it doesn’t tend to happen. Office design is only a miniscule part of that.

Equally, office design has done little to improve our productivity. UK workers are putting in the longest hours in the EU, but this isn’t translating into improved productivity. In fact, the research shows employees in Denmark put in over four hours less than UK workers – whilst productivity in Denmark is 23.5 percent higher than the UK.

It doesn’t look like the innovators can save us either. The latest office disruptor – WeWork – appears to have stalled too. WeWork’s fundamental business idea — to cram people into cool looking spaces and give them snacks — puts lipstick on the problem, but wholly fails to address it.

The cost of all this is measurable, in employee disengagement scores and the costs of our locations. The average annual property cost for a British office worker is £4,800 ($6,000), according to Investment Property Databank.

Can the death of the office come soon enough?

The office is the biggest inefficiency tax that organisations layer over themselves.

They cost huge amounts to procure and maintain, they become an all too convenient base for meetings and managers (the next biggest inefficiency tax), and they set an unhelpful precedent for the expected hours that people are meant to work.

Rising travel costs, advances in technology and the climate crisis are cohering to guarantee that working from home becomes relatively commonplace. And a new form of remote work has emerged: working from anywhere , in which employees can live and work where they choose.

After over a century of trying to solve the productivity problem with physical design we need to ditch the idea of the office as being the answer.

We don’t require new workspaces but new cultures.

There is no unique formula for productivity or creativity. It’s now the role of the leader to work with others to find out what their own unique formula is.

That might mean:

  • Giving teams true autonomy and flexibility, rather than trying to micromanage their  work
  • Providing funding for informal meet-ups to allow people to collaborate in ways that suit them
  • Giving people freedom over the technology they use, allowing them to make use of personal devices not company mandated relics.

Your next conversation with your team could be about how much sleep they are getting, when they feel they are most creative, and what the optimal conditions are to get their full concentration.

When and where we are productive is as individual as our genetic code. That’s why getting people to agree on what workspaces should look like results in them being the average of everyone.

Yes – we need a radical review of the purpose of offices and that means having to think very differently about what it means to “go to work”.

It also means getting to know teams, actually listening to people as individuals, and letting them become the designers of their own unique workday.


 

Featured Image by Pexels from Pixabay

Why We Are So Bad At Defining Problems

If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions. – Albert Einstein

I don’t know whether Einstein ever used those words. It may be just like the Henry Ford “Faster Horses” quote – something perfectly phrased and also perfectly true that no-one actually ever said.

Whether he said it or not, Einstein believed the quality of the solution you generate is in direct proportion to your ability to identify the problem you hope to solve.

And of course he was right, you can’t really solve a problem you don’t fully understand. “If you can’t explain it simply, you don’t understand it well enough”. Another quote he (probably) didn’t say.

Either way, 60 years after his death, many of our organisations have still failed to learn his most valuable lesson. So what is so difficult about problem definition?

Many of our organisations have set the climate for solution focused rather than problem defining behaviours.

A solution focused culture is exacerbated by the following conditions:

  • Leadership putting pressure on finding quick fixes and the realisation of short term goals – rather than long term impact
  • Discussing problems, or considering that organisation itself may be part of the problem, is seen as taboo or a sign of weakness
  • Management falls in love with a solution too easily even if it’s not solving the problem at hand
  • An implicit assumption that leaders have all the answers. “Let managers manage and get on with it”
  • A lack of evidence based enquiry – which allows bullshit organisational ‘facts’ to circulate and obfuscate true problem definition

In my work over the past five years, since I’ve given up having any operational responsibilities, I’ve seen how easily we can all lapse into solution focused work.

Unlike Einstein, when given an hour we often spend – at best – 5 minutes on the problem and the remaining 55 minutes solutionizing.

Our+Approach+To+Design++-+Simon+Penny+(7)

As Simon Penny writes in a great piece for Bromford Lab “when we talk about design we are using it as shorthand for 4 key elements of problem solving activity – discovery, definition, development and delivery. That means that at least half of what we do is based on truly understanding and defining the problem we are trying to solve and the other half is based on developing, testing and iterating ideas into a scalable solution. In short, we think about design as a whole end-to-end process”.

So rather than seeing problem definition as a one off activity, it’s now what we do all the time, objectively helping the organisation to solve the right problems and resist its inbuilt solutionist behaviours.

The five step approach to problem definition

1 – Establish the need for a solution

This sounds completely obvious but just because you’ve seen or thought of a solution doesn’t necessarily mean one is actually needed.  Starting with a high level question of “What problem are we trying to solve here?” and being very clear about it is a good starting point. You’ll usually come up with a lot of further questions – so don’t even bother trying to fully define the problem at this point. There may not even be one.

2 – Match the problem to organisational strategy

Even if you’ve established the need for a solution – it may not be one your organisation is best placed to provide. No organisation, large or small, can manage more than five or six goals and priorities without becoming unfocused and ineffective. The best organisations don’t try and do everything. They focus on trying to solve fewer problems, in better ways.

That involves finding your ‘irreducible core’ of services and then constantly refining and innovating against it.

It also means saying no to trying to solve everyone else’s problems.

3 – Explore the context to the problem

Often your problem will be one that the organisation has tried to resolve before. We rarely stop to reflect on why our previous efforts failed and what we should avoid this time.

If the problem is industry wide, it’s crucial to understand why the market has failed to address it, and whether it is even feasible.

4 – Writing the problem statement

Now you’re ready to write something down. A problem statement should describe the undesirable gap between the current-state and future-state. It should avoid any mention of a solution and be no longer than a tweet.

5 – Initial prototype solution

As Simon Penny also wrote here , prototyping can also be used to test an idea; not by creating a smaller working version of a service or product, but by testing the many different component parts or even thinking abstractedly in order to start to uncover what it might feel like to use the service or product. This can be tested – with people – to help you further refine the problem. Thinking of prototyping as part of the problem definition helps you avoid falling in love with your first idea.

All of this takes time , and this is why our organisations are bad at it.

Falling in love with the problem , rather than the solution means:

  • Accepting your first idea could be the worst idea – and might be wrong
  • Being brave enough to pull the plug when you realise you’re not the ones to solve it
  • Becoming comfortable with failure – as the only way you’ll ever explore a problem worth solving is through a ‘try, fail, learn and try again’ model.

When you truly fall in love with problems, not solutions, you not only stand a better chance of solving them. You also start unlocking a path to a better, less complicated organisation.


Footnote:

By the way – it is possible to argue you can solve problems without first defining them.

I’m currently travelling and it’s inconceivable that we once had to carry suitcases. The first wheeled luggage was invented by Bernard Sadow because he had a bad experience in customs returning from Aruba. Struggling to carry his heavy luggage, he observed an airport worker effortlessly rolling a heavy machine on a wheeled skid. The rolling suitcase was born.

That’s not how our organisations work though. If the eureka moment was so common place we’d have solved most of our most intractable problems by now!

What We Can Learn From The Oldest Companies in The World

Shigemitsu Kongo, a Japanese Buddhist temple builder, formed his construction company Kongo Gumi in in 578 AD. His company built relationships with their customers that lasted for 1,400 years, surviving through many wars and natural disasters,  just like their temples.

It wasn’t technology that nearly killed the company, but cashflow. The oldest company in the world became a subsidiary of Takamatsu Construction in 2006.

There’s a very good chance you will outlive the company you work for. Whilst our life expectancy is increasing, the lifespan of organisations appears to be in decline.

The average age of a company listed on the S&P 500 has fallen from almost 60 years in the 1950s to less than 20 years today. Only 30 of the original companies still exist in 2019, the 35th anniversary of the FTSE 100.

Disruptive technology is killing off older established companies at a much faster rate than ever before.

This is why when you go to conferences you’ll see presentations selling the virtues of Uber, Amazon, Netflix and Google.

Be like them the wisdom goes. Be agile. Only by doing as they do may you survive.

This is only half the story though.

Rarely , if ever, do we look at the companies that are bucking this trend. The companies who have been around forever and are still doing business.

A look at the oldest companies operating today is fascinating.

Worldwide there are over 5,500 companies that are over 200 years old. However the distribution of these is heavily weighted to just a few. Japan dominates the list (3,146), followed by Germany (837), then the Netherlands (222), and France (196).

I started this week staying in Düsseldorf, Germany, in a district known as “Little Tokyo on the Rhine” — one of Europe’s largest Japanese communities. I was there to talk to European students about the opportunities of smart cities , but I concentrated more on the possibilities of building upon the wisdom of communities that have existed for generations.

It’s deeply unfashionable to talk about , let alone revere, older things today. It’s almost like innovation started with the iPhone and disruptive companies began with Uber.

My week ended with a visit by the Disruptive Innovators Network to Bromford, who at 56 years old is barely out its pre-school stage in Japanese or German terms. It was interesting to hear in the talks by Helena Moore and John Wade how there was almost an apology for referring to things we had learned more than five years ago, as if we were becoming embarrassed by the weight of our own history.

We shouldn’t be though. The right culture for innovation is one where there is:

  • Just enough friction – with teams having regular, intense debates
  • The practice of high standards, with a steady supply of high performing people who are committed
  • Permission to be different – a culture where it’s allowable, even encouraged, to push back. 
  • The ability to think and act experimentally with a tolerance for failure through practical experiments

However it’s also a culture that creates a feeling of belonging and a feeling of purpose.

Why have so many Japanese and German businesses lasted so long?

A study by the Bank of Korea found that such companies thrived over the years because they created new demand while sticking to a corporate culture that promoted tradition, attention to detail, and frugal innovation.

Instead of going after short-term results, they pursued longstanding trust with customers and partners. They also pursued growth within their means, rarely borrowing to expand.

In his book The Living Company, Arie De Geus attributed the success of older businesses to four factors:

1. Long-lived companies were sensitive to their environment and remained in harmony with the world around them.

2. Long-lived companies were cohesive, with a strong sense of identity. No matter how widely diversified they were, their employees felt they were all part of one entity.

3. Long-lived companies were tolerant and generally avoided exercising any centralised control over attempts to diversify the company.

4. Long-lived companies were conservative in financing. Frugal even.

However his strongest point is contained in one sentence “Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations’ true nature is that of a community of humans.”

It’s time to stop worshipping the new and the shiny. We need to strike a delicate balance between continuation and innovation, being reliable and disruptive at the same time.

Creating a culture where these two competing sets of values can coexist is difficult – and not always a comfortable place to be.

Clearly though , the innovation potential of us older lumbering giants is vastly under appreciated – and the disruptive power of the younger and hungrier is often overstated.

How Good Company Culture Can Go Bad

Here’s a sentence I never thought I’d write.

One of the best hours I spent this week was with our Governance, Risk and Assurance Team.

There – I said it.

Joking aside, the relationship between governance and innovation is an important one.  As I wrote in my last post – for an organisation to support innovation the culture must accommodate the risk and uncertainty that accompanies it.

A culture of risk aversion is a culture that limits innovation. The bedrock of innovation is experimentation, and this requires a relaxed attitude to failure. That failure though has to be well governed, to make sure you don’t flagrantly waste money or harm organisational reputation.

If your innovation efforts are to be taken seriously, and to scale and spread, you need to have a mature approach to risk. At Bromford, a member of the Governance team sits on our weekly Design Group, jointly agreeing every new concept we test.

The session made me reflect on how the organisational cultures I promoted last week , can become so constraining that they start to promote the wrong behaviours.

Can good cultures go bad?  

A lot of organisational assessments (Best Companies etc)  seem to hold teamwork, cooperation and shared purpose up as a kind of holy grail.

However, innovation often thrives because of diversity and discord. “The idea that will get you fired” is often the best one to explore.

Strong cultures are a positive – but there’s a tipping point. A point where conflicting opinions can get stifled rather than being actively cultivated.

Phrases such as “That’s the way things get done around here” or “That person isn’t really a (insert company name) sort of person” are red flags you’re reaching that point.

In The Three Box Solution by VG Govindarajan he proposes a simple test to assess the size of the challenge in forgetting your organisational past.  

Here are some of the questions:

  • We primarily promote from within
  • Our culture is homogeneous
  • We have a strong culture
  • Employees have a long tenure
  • We rarely recruit from outside apart from entry level positions
  • When people are recruited from outside, we have strong socialisation methods
  • We have a track record of success
  • We don’t mess with success
  • The senior management team has a long tenure and has also worked primarily in our sector

VG asks us to answer the questions scoring 1-5, with 1 representing ‘strongly disagree’, and 5 representing ‘strongly agree’. The higher the score the bigger the challenge.

I ran my own organisation through this and found we score pretty highly. As VG teaches us – this is not cause to throw our heads into our hands and despair. Rather it’s about surfacing awareness of the weight of our history – and the chains we may need to break to move forward.

This history can lead to what Donald Sull called active intertia, which is when managers get stuck in a rut so that when an entirely new situation arises they revert to old responses. Active inertia, Sull says, is “management’s tendency to respond to the most disruptive changes by accelerating activities that succeeded in the past”.

These can become cultures built around an excessive drive for performance at all costs, where status is more important than relationships based on equality, challenge and collaboration.

How can we mitigate against this? In the session this week we discussed the following activities:

  • Keeping teams curious. Encourage them to go out and explore the wider world beyond the office door. Maintain a high degree of customer closeness and never believe your hype.
  • Maintain relationships with people who actively disagree with you. This means embracing misfits – not rejecting them from “your” culture.
  • Go beyond your sector and generally avoid the places your peers gather. People are working on the same things as us across the globe and we won’t solve things on our own. We are desperately inward looking as sectors.
  • Encourage informal teams to work on cross cutting problems. More work in innovative organisations is accomplished through informal teams than formal ones. 
  • Have the right set of organisational design principles that ensures your company is joined up and consistent. However this needs to be capable of challenge , so the way we do things around here is constantly under scrutiny and capable of iteration.

Contained in our own personal and organisational histories are thousands of assumptions. Assumptions that we live by everyday.

Organisational DNA can become so baked in that we don’t even question what we are doing.

A crucial part of keeping a good company culture is about challenging our assumptions about why we do what we do, how we do it, and who does it.

Everyday.

Creating The Right Culture For Innovation and Change

I’m not sure I buy into the concept of organisations having a culture of innovation.

After all, innovation is a process consisting of four things:

  • Having an idea that solves a problem
  • Doing something with that idea
  • Proving that it delivers new value for people
  • Translating it into reality and making it part of the everyday

The idea then that innovation is everyone’s job is naive at best.  Successful organisations need to be boringly reliable and radically disruptive at the same time, living with two competing sets of values.

However I do believe in creating the right culture for innovation.

Indeed, for an organisation to support innovation the culture must accommodate the risk and uncertainty that accompanies it.

What kind of culture are we looking for?

For me there are four elements to this:

Just enough friction: the most effective teams have regular, intense debates. As leaders, we need to help our teams disagree more. Discord has to be allowed to take its proper place if we are to solve the problems that matter.

The practice of high standards: innovation requires a set of crosscutting practices and processes to structure, organise, and encourage it. This requires a steady supply of high performing people who are committed. And if you create an environment of energy and high performance it will attract other high performers.

Permission to be different: a culture where it’s allowable, even encouraged, to push back. Everyone should be OK with questioning assumptions,  calling out inconsistent behavior and challenging old business models.

The ability to think and act experimentally: a tolerance for failure through practical experiments that show whether the fundamental assumptions about innovation are correct and what they mean for the business.

These traits only happen through a commitment to creating the right conditions. These are cultures that are reinforced every day, not just by the leadership , but with active collaboration from people at every tier of the organisation.

Let’s face it – most Mission Statements and Company Values are a complete waste of time. They exist as tacked up bits of paper on a wall rather than something that sits in the hearts and minds of people.

Here are three organisations from very different industries whose values are conducive to supporting innovation:

Zappos

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Zappos , the online shoe and clothing store, are known for their unique culture and values. Their CEO Tony Hsieh has said his company’s number one priority is the company culture. “Our whole belief is that if we get the culture right, then most of the other stuff, like delivering great customer service or building a long-term enduring brand or business, will just be a natural by-product of that.”

Here are the Zappos core values that are designed to be different:

  • Deliver WOW Through Service
  • Embrace and Drive Change
  • Create Fun and A Little Weirdness
  •  Be Adventurous, Creative, and Open-Minded
  •  Pursue Growth and Learning
  • Build Open and Honest Relationships With Communication
  • Build a Positive Team and Family Spirit
  • Do More With Less
  • Be Passionate and Determined
  • Be Humble

With the call to “create fun and a little weirdness”, Zappos are making it a place that supports innovation.

Buffer

I love the culture of Buffer, a service that helps you share to social networks.  You can feel the genuine enthusiasm for the organisation from the people who work there and what they tweet and blog about.

The Buffer team has jointly decided which words define the culture and put together this list of the 10 Buffer Values and how they live them.

Buffer-Values-e1417635934521-1024x897

What’s impressive here is that they are a continual work in progress, with all members developing them in the open.

Having dealt with Buffer on a number of occasions I can say their values are displayed both in 1:1 dealings and in their online social presence: Listen First , Then Listen More.

Bromford

(Disclosure:  I work for Bromford and have a hand in developing the DNA – but I think it’s worth sharing the story)

Imagine screwing up your mission statement , vision and values and handing it over to three colleagues to start all over again and pitch it direct to the CEO. That’s what Bromford did and it’s how they came up with their original Bromford DNA.

The latest version of the DNA though, developed under new CEO Robert Nettleton, had a completely different genesis – focusing on collaboration. Bromford held more than 30 workshops with over 500 colleagues attending and sharing their views.  After these sessions a smaller group of colleagues took part in a fusion session with Bromford Lab – and from this the final definitions of our DNA emerged.

DNA Slides

 

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The fact so many people have co-developed the DNA gives Bromford a head start in embedding the culture. When you’ve energised the early adopters, you have given the framework for the culture added impetus and traction.

Bromford have even provided colleagues with a personalised notebook for them to record their actions and barriers to consistently living the DNA.

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Supporting ideas from fruition, selecting the best ones, experimenting and growing them is a very fragile process.

All we can really do as leaders is to create a climate that supports innovation –  a climate that will help to sustain a future ready organisation over the years to come.

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