Rethinking Management

1      Introduction

2020 will almost certainly go down in history as the year of Covid-19, the year when a pandemic got people all over the world isolated, forbidden from mingling, seeing friends, colleagues and family.  On every continent, people are to “self-isolate” for periods from a week to several months while politicians scrambled and argued as to what was the best way to contain the virus and health professionals worked overtime to try to find a potential resolution.

The World Health Organisation representative stated in a conference[1]:

“What we have learnt with the Ebola outbreaks is that you need to react quickly […] you need to be consistent, you need to be coherent, you need to look at the other sectors impacted, […] the security, the economy.  Be fast, have no regrets, you must be the first mover.  If you need to be right before you move, you will never win; perfection is the enemy of the good when it comes to […] management; speed trumps perfection.  And the problem we have in society at the moment is that everyone is afraid of making a mistake, everyone is afraid of the consequence of error.  But the greatest error is not to move; the greatest error is to be paralysed by the fear of failure.”

From a business point of view, it is a real crisis.  Many small organisations will cease to exist as people stay away from shops, bars and restaurants.  Larger companies have to learn to work without using the office, managing teams that are working from home, each team member isolated, yet expected to work together.

In the beginning, we had mechanistic management, in which the manager needed to maintain visibility on the unskilled workers, continuously checking that they were doing as instructed and not taking unauthorised breaks.  Towards the end of the previous century, a more systemic style of management came to light. Management focused on interdependencies between functions and skills, the value of employees as skilled and trained assets begun to be understood and we got rid of the old concept that you can replace anybody with anybody else.  Within this area, some remnants of mechanistic attitudes remained, particularly with the creation of the most counter-productive “open plan” offices with its noise levels, interruptions and workers isolated behind earphones.

The time has come to reinvent the way we collaborate and interact based on remote working and distance learning.  The technology is ready, but many people are not. This state presents a significant number of problems and challenges to resolve and questions to answer. However, it also offers you a unique opportunity to rethink and reorganise your business to be more efficient.  I would like, in the following paragraphs, to make some suggestions and recommendations as we move towards a new management style.

2      The Challenges

2.1     Security

Are people accessing your company data remotely?  Are you sure that they have the security levels that you would expect in your business transactions?  The penalties for a GDPR infringement are costly and you could be putting the future of your organisation at risk if you allow one of your home-workers to access personal data over an unsecured home wifi network.

It is not difficult to implement a firewall that only allows registered computers to access your network (white-listed) to stop employees from downloading customer information unto their personal devices and placing you at risk.

2.2     Work Space

When working from home, you need to have a dedicated workspace.  You cannot expect people to work efficiently if they are working from a couch with a laptop on their knees, or at a kitchen table that must be cleared away three times a day for meals.

The business should offer to subsidise, within limits, the creation of a home office.  I do not expect you to pay for all your staff to have a home extension, but they should get support in the setting up of a good quality desk, an office chair, appropriate lighting, and whatever they need to be able to do their job.

2.3     Team Meetings

Team meetings are valuable: you need to be able to exchange information and keep each other up to date with what is going on regularly.  There is no excuse not to have remote team meetings today; the technology for this is easy to use and cheap. Skype and Skype for Business, WhatsApp (including desktop version), Google Meet, Zoom, Discord, Slack, Microsoft Teams, MeetUp to name only some of the most common all allow quality communication and exchange, sharing and presenting, as well as audio-visual interaction.

Team meetings should be organised at regular hours, included in people’s calendars, and compulsory unless they have a valid excuse, just as if they were in the office.  Also, just like in the office, the meeting’s facilitator needs to ensure that people remain focused and participating.

Online meetings are more challenging than face-to-face because you cannot necessarily see if team members are listening, participating or reading their emails.

2.4     Support

When you are in the office, you can see that one of your colleagues is not well, not happy.  They appear depressed or distressed; they are not joking anymore and don’t want to talk to anyone; you can see that something is not right and offer them support, friendship.  You can reach out to them or make sure that someone who is usually close to them does.

When you are on a conference call, will you notice the person who does not participate?  Will you realise that one of your team needs additional care and support?  It is easy to miss in the best of times, but when you are only communicating through devices and phone lines, it becomes a challenge.  Additionally, when at the office, team members call in to say they cannot come in because they are not well; when working from home, that warning signal no longer exists.

We a manager, you bear a responsibility to some extent for the mental health of your team.

I would recommend that you set up some sort of “buddy system” – teammates who are in contact with each other at least once a day, making sure that their colleague is OK, physically and mentally through informal banter.

One approach to implementing this is through daily peer reviews: every day I will have a call with team member X to review what they have done, and a second call with team member Y to present/explain/test what I have done.  This approach creates an active chain of best practices, lessons learnt and continuous improvement of the work, while time ensuring that no one is left isolated and there is a dynamic check on all team members.  Depending on your business, these daily calls could also be mentoring calls or have another defined purpose.

Even more, I would recommend that, whatever tool you are using to keep in touch with each other, you allow for informal chat, jokes, “water-cooler” conversations between team members.

2.5     Mental Health

Working alone, not going out, whether it is because of a crisis like Covid-19, illness or the need to care for children or parents can be very stressful.  Cabin-fever is a real problem when you are locked up continuously.  When working with a remote team, management must ensure that their people are not suffering unduly from their isolation.

You need to encourage them to take breaks regularly.  Remind them that the objective is to achieve the results, create the products, deliver the services and not to sit at your desk from 09:00 to 18:00 every day.  Some might prefer to work early mornings or late nights and take time off during the day.  You should not penalise them because they run an errand or have a nap during office hours.

You should also encourage them to get out of their home if that is possible.  Go for a walk or some other exercise they can do; if they cannot go out, remind them to open their windows wide at least once a day, even in the coldest winter, to air out the place.  They should be encouraged to go to a gym or do yoga.  “Mens sana in corpore sano”: if you don’t take care of your body, your brain will suffer.

2.6     Motivation

How do you motivate team members who are working on their own, isolated in their homes?  It can be very demotivating to have no one to whom you can speak, not seeing a colleague for days.

2.6.1     Maintain Relationships

We are social animals, and our society is not one of individuals, but an intricate system of relationships.  Our sense of self is derived from our social interactions, and when one is socially isolated, it can be extremely soul-destroying.

Building on what I wrote above, it is critical that, as a manager, you keep communication lines open and active with every individual in your team.  Your position requires that you regularly have personal communication with everyone in your team – not necessarily daily, but at least weekly.  There are different ways to achieve this contact.  The “Agile” software development methodologies recommend daily “stand-up” meetings with the whole team to review what each one has done, is going to do next, and what problems or concerns are blocking them[2].   As a team leader or manager, you should enforce these meetings and ensure that you can identify anyone who might be struggling.

2.6.2     Critical Thinking

One of the best motivational tools is coaching people to discover the solution themselves rather than telling them the answer or deciding for them what they need to do, how and when.  Your role as a manager is not to bully your team into obeying your orders, but it is about helping your colleagues embrace critical thinking and decision making.  When and working from home, it becomes more challenging to decide to call in to ask whether they are allowed to do something and wait for the response.

The Socratic (or elenctic) method is a method of verifying and validating someone’s ideas and assumptions by questioning them and presenting them with cases when their concept doesn’t quite manage practical reality.  A good leader will seek to ask the right questions rather than demand to be respected.

2.7     Rewards

As in so many other areas, frequent small rewards go a long way to motivate and encourage.  These rewards need not be complicated; public recognition can be enough in many cases.

To assist with performance and productivity, the usage of frequent small rewards may become more habitual.  When working from home, team members may remember that they are free to decide their working hours and methods but must remember that their objective is to complete the tasks to match expectations.

Of course, it may not be as simple as paying them based on results you are already using salaried members of staff. Still, you must consider how to reward individual members of the team for continued quality work.

2.8     Social Life

Many companies know the value of social life, regularly organising a Friday social drink or a lunch to celebrate some event.  Events can also be arranged online, with a regular meeting to which everyone is invited, but no work-related agenda is set.  Team members join with cup or glass of something and just chat, socialise for half an hour.

Of course, all team members should be encouraged to invite their colleagues to meetings or chat directly through one of the many tools available.

Another aspect of this is the community social responsibility of the organisation.  Many companies have a charitable department in which employees volunteer to organise fund-raisers or support a local charity.  Corporate social responsibility should be encouraged, allowing individuals to participate and organise remotely, alone or in groups.

2.9     Tasks and Objectives

If team members are going to work more or less independently, they should have a clear understanding of their tasks, roles, objectives and limitations.   The management team (at every level) must ensure clear, coherent and consistent messages at all times, in what they say, write and do.  Team members cannot just walk over to a colleague and ask “what did she mean by that?” They now have to contact someone online and will be more careful about asking “stupid questions” in writing.

As a consequence, it is required that all communication, from the company vision statement down to the assigning of tasks, be known, understood and accepted by the people concerned.  An approach such as OKR (Objectives and Key Results) facilitates the aligning of objectives and needs in a clear, quantified manner.  If the final aim isn’t understood and measured, you may safely expect your team members to deviate from their task and deliver something that does not correspond to expectations (whether over or under).  Tom Gilb’s approach to value planning and his “Planguage” also allows refining requirements and expectations beyond common misunderstanding.

2.10  Planning and Discipline

Team members need to share their detailed plans and must strive to respect them.  If you want to work from 06:00 to 08:00, then have a break until 10:30, that is all right, but should be communicated in your schedule.

It is essential when working alone to have a clear routine.

Within that schedule, one needs to ensure that work can be completed without excessive distractions.  When working from home, you potentially have a spouse, children and pets to interrupt your work; you have the opportunity to take a nap or start cleaning; you may decide to go shopping or sit on the couch and watch television for hours.  These are all real temptations for the home worker, and there is little management can do about it other than remind them about the need to deliver on time.

One additional time-waster is the vast array of “social media” that are available.  You should encourage (not enforce) team members to switch off all social media when working, except for those required for business reasons.  You do not need to read your emails as soon as they come in, you can read them two or three times a day and be up to date.  You should not be tempted to jump every time an acquaintance posts a meme on Facebook.

2.11  Right to Fail

When working alone, you may go down the wrong path and completely misunderstand an activity or task.  It might only become apparent when the work is complete, time and money invested, and the results of various team members are consolidated into a final product or service.  Failure should be considered an opportunity to learn and not a cause of castigation.

“Fail fast” is a recommendation in most cases.  You should not hesitate to try something new, but test it to determine its viability and eliminate the solution as rapidly as possible if necessary.

The object of science is not to find the ultimate solution and the perfect answer; it is to identify the smallest number of assumptions that allow you to explain, through deduction, the largest number of observable phenomena.  When finding a solution, it becomes the duty of anyone following a scientific process to test it and determine whether it is valid.  If you identify a case in which your assumptions do not appear to support the evidence, it may be that they are false, or it may be that you have identified the limit of their applicability[3].

Encourage team members to fail as quickly as possible.

3      A New Way Forward?

The 2020 global crisis has had many consequences and an enormous impact on the way people work all over the world.  While it has undoubtedly created hardship in many places, it has also had an amazingly beneficial effect on the environment and the rest of the world.  The problems raised are primarily due to the lack of preparation and the surprise factor.

We need to learn the lessons and start implementing a new approach to the way we conduct business with remote management options.  For many jobs, there is no need to work in a given location or at specific times.  I regularly come across IT professionals who have left an idyllic country life and moved to a crowded, noisy, polluted city to find work.  This move should not be necessary in the age of satellite communication and high-speed internet.

We have an opportunity to rethink our businesses and management techniques.  We can move our new management firmly into the 21st century, respecting employees and promoting a global community-based culture in which family and work can merge and support each other.

I do not believe that we need to throw out everything; I am not saying that we should condemn all office buildings and make everyone work from home. However, I do believe that these buildings can be used more effectively by reducing the space required, have more meeting rooms and better layouts for workers who do not come to the office every day.

[1] I have removed the words that point specifically to health care and Covid-19 as I want to make sure that managers reading this don’t discard the information as not relevant to their business…

[2] These “scrum” meetings, if you are not familiar with them are daily, but severely time-boxed to no more than 15 minutes during which every participant gives their progress report. The “scrum-master” gathers all the impediments and roadblocks and ensures that they are handled appropriately.

[3] The theory of universal gravitation is not false just because the theory of relativity and quantum physics appear to prove otherwise.

Managing Fear

I recently gave a talk on “Managing Fear” at the Bosch “Future of Mobility Day”.   This talks about the need to translate fear into something positive that can be used as a powerful tool for progress and change. Without fear, there would be no progress…

This is now available online.

For the recording of the presentation, please go to https://youtu.be/5X95IPaKNqo.

A copy of the slides (they are not always clear on the film) can be found at https://www.slideshare.net/PeterLeeson/managing-fear.

Bosch Managing Fear
Presenting Managing Fear

Defining Quality

The following was first published on LinkedIn on 5 July 2019

Framing Quality

For many years, I have been interested in Quality.

Quality is something unique and needs to be taken seriously because Quality is the only thing most businesses have to offer their clients: I can find your products and services somewhere else, only your quality differentiates your offer from your competition.

Quality is strange because few people appear to know what it is or make an effort to define it. They may complain about lack of quality, but don’t actually take the time to explain it in measurable terms. Frequently, it is the absence of Quality that allows us to frame its definition.

Business people are generally familiar with the basic concepts of collecting and collating, qualifying and quantifying clients’ values, needs, expectations, requirements and desires; they know how to prioritise, plan and perform your work accordingly. However, when one asks them about the amount of quality they will put into it, they can’t answer.

Engineers may answer by explaining how many – or few – defects per thousand line of code they leave in their software, or they may mention the mean time between failures of their equipment. That is not quality, that is minimising averageness.

Salespeople and designers respond with the coverage of requirements and compliance to standards, but that is not quality. It is delivering a product or service that matches what you promised to your customer and does not break down. That’s not Quality, that is the contractual obligation. The fact that you are compliant to ISO9001 or some other industry standard, or that you have implemented PRINCE2 is really of no interest to me as it does not guarantee anything. These are valid standards, but they refer to the apparent quality of your processes, but not of your products and services.

Quality as a Relationship

Quality is hard to define because it is not a functional characteristic you can produce. Quality is not something intrinsic to your products or services: it is the relationship between an individual and a product or service. The quality of your products is the relationship your clients (and prospects) have with them – and relationships are more complicated to engineer, plan, estimate or measure. Relationships may even change from day to day, sometimes better, sometimes worse, dependent on external factors.

Quality is whatever your client says it is today.

So, the question is: how does one plan, design, estimate and cost a theoretical relationship that a potential future client might have with a product that does not yet exist?

Defining Quality

Drawings of the basilica of Fano

Let’s go back a few years; in fact, let’s go back many years, all the way to the year nought and a Roman architect called Vitruvius. The man’s a bit of a mystery; we’re not sure what his full name was: he may have been called “Marcus Vitruvius Pollio”, or possibly “Lucius Vitruvius Cordo”, maybe he was called Mamurra. He is known to have built a basilica in Fano, but no trace remains of it.

Vitruvius

What does remain is his 10-volume treatise called “De Architectura”.

In his oeuvre, he sets out a few fundamental principles defining quality, principles that are still as relevant today as they were two thousand years ago. Vitruvius’s theories resurfaced in the fifteenth century and acknowledged as a source of inspiration for architects and designers such as BatistaDa Vinci and Michaelangelo. In the 1970s, his ideas inspired Christopher Alexander to write a seminal work on architecture defining what he called “A Pattern Language”. This book, in turn, was a source for the 1994 book called “Design Patterns” which fundamentally changed the IT industry and software development.

A Roman architect from antiquity who revolutionised computer software development must have said something of value.

Sense of Proportions

A central concept of Vitruvius was the relationship required to relate the very big to the very small.

FRANCESCO DI GIORGIO MARTINI illustration from (1492-1502), Trattati di architettura ingegneria e arte militare| based on the Vitruvian Man theory of human proportions

He explained that your building, your product, no matter how big and majestic, no matter how sublime and enormous, must have proportions related to those of the human body. The structure and proportions must remain consistent from the highest-level concepts, down to the minutest details.

Today, in the world of business, we need to ensure that our principles, values, vision and mission statements remain understandable and coherent from the lofty CEO level down to the factory floor. Everything – policies, processes, procedures, plans and practices – need to be aligned and consequent.

Quality Without a Name

However, the critical Vitruvian concept for me is his trefoil description of Quality; one which Christopher Alexander called the “quality without a name”, an absolute quality surrounded by known measurable concepts that reflect it but are not sufficient to define it.

Vitruvius describes quality as being composed of three key ingredients: firmitatisutilitatis and venustatis.

Firmitatis

The first quality is the stability or reliability you offer.

How well do your products or services survive in times of trouble? How good are they when storms hit?

If you build a house in which the roof leaks or the walls creak in a strong wind, you have failed. If you sell a car that won’t start when the outside temperature is below freezing or a network that overheats if used consistently for more than a week, your product has fallen at the first hurdle, and the very idea of quality is out of your grasp.

Utilitatis

The second aspect of quality is the utility or usability of your product.

Of course, all businesses are aware of this and believe that they are delivering something useful. However, this needs to be confirmed by your clients. A Lamborghini Testarossa is of little use to a disabled person trying to go shopping in a medieval cobbled village; in that context, the car cannot be considered as quality as it is not fit for purpose. Few people would appreciate the value of a great enlightened book on the keys to success in their own business should it be written in an unknown script like Sanskrit or Georgian.

To understand the usability of your products and services, you must have a clear understanding of your clients’ needs, beyond their requirements, why they might be interested in your products, and how they plan on using them. You need to understand their business, their life, their issues.

Venustatis

The third aspect of quality is the desirability or beauty of your products.

If I can find the same thing elsewhere and if I can find it cheaper, what would make me want to buy from you? What will make me come back for more in a few weeks, months or years? What is the additional feature, the surprise, the “wow” factor built into your offering? What is the thing I was not expecting but brings more value than I would have imagined? What is it that I have not requested, have not considered, and to which I might not have agreed to pay if you had suggested it?

Desirability is something that was understood by Steve Jobs, but not by Bill Gates: no one ever queued up overnight to buy an upgrade to Windows.

That additional feature or aspect, that extra, that unexpected thing that your client really appreciates, even if it is only retroactively, that is your added-value, where your quality lies. That is the Quality what you need to estimate in terms of value and cost.

Quantifying Quality

In business, you have a risk appetite: your risk appetite defines the amount you are willing to spend, invest or risk without security. At the most elementary level, this is how much work you will do before you get paid. You estimate the cost of labour and expenses based on your risk appetite; it defines how much time, resources, money and effort you invest in developing or delivering something no one requested yet.

The next step is to estimate the value at the same time as the cost, with the same rigour, based on your market research, your understanding of your competition, your knowledge of your clients’ needs and desires, your insight into what your clients’ competitors are planning. That is the added-value or quality of your development work.

What would it bring if you added this function, how much would it attract, tempt, hook your existing and future customers?

If the value is higher than the cost, do it, whatever the cost.

If you estimate the cost to be higher than the value, don’t.

Can Schools Learn from Business?

The following article was first published on LinkedIn, 4 July 2019.

I recently had the great pleasure of listening to Peter Twining (@PeterT) from the Open University speak on the topic “If School is the Problem, What is the Solution?”

He raised all the traditional concerns and shortcomings of the schooling system in which there is a focus on getting good grades for the school, rather than educating or teaching the students to learn. The purpose of school has largely been forgotten and it has turned into a bureaucracy aimed at demonstrating the statistical value required by the authorities who allocate grants and funding.

In the 19th century, something similar happened to businesses, as a new life-form evolved on planet earth: the corporation. While businesses in the past were created to offer a service or product to neighbours, they evolved into creatures whose sole purpose was to grow, eat and reproduce. The corporation’s main ambition is to kill off the competition in order to maximise profits. Those profits are then not spent on the community or the service, but on increasing the wealth of shareholders and owners; the original concept of service to neighbours is largely forgotten.

During the past few decades, a flotilla of new concepts have come into existence for businesses, concepts that are promoted by management consultants – sometimes to the benefit of the business, sometimes to the benefit of the business’s staff or clients, sometimes solely to the benefit of the business consultant. One of the key players in this field was a man called Dr.Deming. Dr Deming’s best-known contribution to the world is probably the “plan-do-check-act” cycle, that has been used, misused and abused millions of times – mostly by people who restricted themselves to only reading the four words and believing that they understood the underlying principles.

One of Dr Deming’s more fundamental business recommendations were his “14 points for the transformation of American industry” (“Out of the Crisis“). It is my belief that it is high time the education system start considering the same solutions. I am listing them hereunder in their shortened form with some explanation as to what this might mean in education:

  1. Create constancy of purpose toward improvement of product and service – it would, of course, be necessary first to identify what are the purpose, product and service of the education system. Is it really just to train people to succeed at tests and exams? Is it to provide a steady stream of potential employees in industries and jobs that may be obsolete in a few years? Or is it to create people able to think for themselves, to generate a thirst of knowledge? As long as there is no clear understanding and commitment, the very concept of “improvement” remains impossible to achieve.
  2. Adopt the new philosophy. We are in a new economic age, we must accept the challenge, learn our responsibilities and take leadership for change – in a world where all information is at your fingertips, in your pocket, in the world of Google, does it still make sense to teach facts and memorise dates? Isn’t it time that we start teaching our young people to understand historical causes and consequences, how to differentiate between facts and rumours, how to understand what is propaganda and what is science? In a globalised world, isn’t it high time that we eliminate the parochial aspect of national education and work at establishing a generation that understands other cultures, speaks many languages and can accept differentiation without disdain?
  3. Cease dependence on inspection to achieve quality – quality needs to be designed into the education system, with an understanding that different people have different interests and that it is the responsibility of the education system to create the variety required to progress society rather than trusting exams to demonstrate conformity to theoretical principles.
  4. End the practice of awarding business on the basis of the price tag – nothing is more valuable to a society than the education of the next generation, yet governments continue to scringe on basic needs because of short-term costs; we cannot build a solid future for the world if we allow the education system to be undermined by bureaucratic bean counters; we need to understand the value of education and prioritise this over vanity projects by politicians or devising more interesting ways to kill people and break things.
  5. Improve constantly and forever the system of production and service to improve quality and productivity, and thus constantly decrease costs – the education system needs to analyse the manner in which things are being done and delivered; lessons need to be learnt as to why one school or educator is more successful than another – instead of rewarding the successful school with extra grants, we should be using their experience to educate the educators.
  6. Institute training on the job – this may have to be inverted in the case of education: it would be good for people who have been in the education system for a long time to have a break from the classroom and actually go into a different job, related to their teaching, in order to get them to understand the relationships between their theories and the real world.
  7. Institute leadership – the education system in many countries is bogged down by administration and management levels: management focuses on the budget and stability, respect of rules and processes; we need leadership, focused on change and inspiring people to the “pleasure of finding things out” – leaders are people you want to follow, managers are people you have to obey.
  8. Drive out fear, so that everyone may work effectively – the education system is run with the constant stick and carrot of grants and ratings; fear does not promote efficiency, fear promotes compliance to whatever the authorities say, even if that is visibly counter-productive.
  9. Break down barriers between departments – one of the more successful education ideas I know is the idea that “secondary” courses are taught in a foreign language, by a native speaker instructor: teach geography in Swedish, teach PE (physical education, gym) in Arabic – you will help young people understand how other cultures think.
  10. Eliminate slogans, exhortations and targets (…) they only create adversarial relationships – no comment, this is self-evident.
  11. Eliminate quotas, management by objectives, management by numerical goals. Substitute leadership – exams and tests are valid tools to determine where the system is failing the students, they should not be used to determine success or failure of students or the relative value of schools and universities, they should be used to determine which students are requiring more assistance and support. Today’s league tables encourage schools to exclude students that are failing in order to raise the school’s average, instead, the measurements should be used to identify what additional support and guidance they need.
  12. Remove barriers that rob [people] of their right to pride in their workmanship – an educator’s job should be focused on educating rather than filling out forms that nobody will read. Dr Deming’s point continues to say this means inter alia, the abolishment of the annual or merit rating.
  13. Institute a vigorous programme of education and self-improvement – every teacher, instructor and educator, should be on a continuous training programme that allows them to improve their personal value; this is not the same thing as closing down the school once a year for “teacher in training” sessions during which they learn of the latest government initiatives, rather this is increasing the value of the teacher, demonstrating the thirst for knowledge that they should be inspiring.
  14. Put everybody in the company to work to accomplish the transformation – people working in the education system know better than anyone else why the system is failing, certainly better than government officials in offices far removed from the institutions. Let them speak up.

The ABC of Growing Pains

The Challenges of Managing a Growing Business

Managing a growing business presents unique challenges. In this article, I am referring to three case studies. These three businesses suffer from problems that originate in a very similar root cause. I could help them identify this with “organizational therapy”. The structure of the article is:

  • General introduction to the context of the three businesses;
  • Defining the common problem;
  • The main problem and results for the three case studies;
  • The principles of organizational therapy with which I could assist all three;
  • A brief conclusion on the pains of managing a growing business.

Establishing the Context

I have recently been working with three growing business. In this article, I will name them by their initials, as these are handily A, B and C. They all three work in the interactive, web-based IT services, but function according to very different business models:

  • A is an IT service provider. They deliver cloud storage and managed services. They support their clients to let them focus on their own business rather than managing their cloud and data needs. A team of professionals assures clients that their systems are updated and maintained.
  • B is a software outsourcing business, developing and delivering web-based applications and websites on customer specifications. They have a number of teams designing, building and delivering websites and interactive online products.
  • C has its own product, a niche market, but a market leader in their area, particularly in North America. Their team works with specialised, cutting-edge skills and deliver solutions that remain one step ahead of what their clients expect.

All three companies started up fairly recently (in the past ten years). All three are located in the same region in Central Europe.

All three companies are still being managed by the enthusiastic and extremely competent technical entrepreneurs who originally created the business.

All three companies are building high-quality products that have earned them an international market presence.

All three companies are self-aware enough to identify that they needed help in managing their growing business.

All three companies grew from a handful of people to a size at which structured management and skills are needed. All three suffered in different ways from their success and growth. This led them to contact me and ask me to come to help them understand and sort things out with them.

Defining the Problem

Growing city
Business, like towns, need to manage the balance between preserve, improve, enlarge and rebuild as they grow

Entrepreneurs are typically technically savvy people with creative ideas. They understand how to build great products or deliver amazing services. They build their business and create something that works; with some marketing, they sell their product.

However, entrepreneurs are not natural managers. They create their business by doing everything, working all hours, designing, building, refining, updating, marketing, negotiating, selling, making the coffee… Once the business grows they find that they need to start hiring people. These new employees are expecting a job, a regular salary and “normal” working hours. A growing business means more management and more management skills.

  • With more than twenty employees, entrepreneurs are no longer able to know what everyone is doing at any given moment.
  • With more than fifty, they no longer know about the people in their business. They may know the faces and the names, but not much more than that.
  • At a hundred employees, they don’t even know some people working for them. They see people in the office, who greet them by name, but they don’t know who are these person or what they do.

Now for bright technically competent self-starters, there comes a time when they must decide they need a professional CEO and hand over the reins. This is a difficult choice. I am suggesting they need to put their baby up for adoption -not a newborn child that they do not want or cannot afford, but one to whom they have given birth, nurtured, loved and watch grow up…

Rarely are entrepreneurs ready to manage a growing business.

The Individual Business Issues

Company A’s Vision

Company A had some teething problems, but the founder was rapidly turning from an entrepreneur into a businessman. He understood that he needed to hand over responsibility and authority in order to manage the business rather than developing the product. Of course, this was not an easy step to do, and he was still caught out publicly contradicting one of his directors. When you place someone in charge of a division of your business, you may not contradict that person in front of his or her team. Ever.

However, the main issue for company A was to clarify and deploy a vision and strategy for the company. As it had grown, different areas were starting to have a life of their own, and there was a risk for the company unity.

Over a couple of days with the management team, we drew up a business strategy and vision statement. The vision statement was the usual one-line BS feel-good statement – after all, we want something catchy that people can remember. But, more importantly, we drew up a “butterfly diagram” of the vision statement. This included a list of effects and changes that should be noticeable if the vision was implemented, and a list of risks, issues and impediments that would stop the vision from becoming reality.

Bow-Tie planning format
The “Bow-Tie” or Butterfly principle

From that, we could assign specific goals to all the key people to either remove, mitigate, reduce or avoid a specific risk or issue, or accelerate, facilitate or deploy one of the noticeable consequences of the vision.

This approach gave structure to the management team and help define their goals more clearly.

Company B’s Measurements

Company B had probably grown too fast, been too successful. As an outsourcing company, they had done what their clients required, giving them a wide range of expertise in a variety of technologies and tools, depending on what clients wanted. This meant that they had different teams working on different tools, using different methodologies… Rapid success allowed the founders to build the company largely on a reactive mode: they responded to client requests instead of leading and guiding them. The entrepreneurs who set up the business are still at the helm and coming to terms with the fact that they probably reached the point when they needed help to effectively manage the business. They also understood they were no longer up to date on the technologies being used.

Cost of Removing Defects
Understanding the cost of defects and the value of V&V

Because of the reactive nature of the organization, they were lacking in a clear understanding of their own performance or productivity, even less of their actual quality. Most people, when I spoke to them said that they knew they were producing quality if clients did not complain. When speaking of “defect density” or “mean time between failures”, they had no clear understanding of what these meant. By introducing systematic measurements of the cost of quality, a better understanding of the key activities for continuous improvement would become possible. It will also help the marketing and sales side of this outsourcing business as they can prove the quality they deliver and justify the time and cost required to deliver high-quality and high-performance products.

Company C’s Organization

The management team of the third company understood that they needed to bring in professional management and they hired a new senior manager. However, differences of opinion at a personal level soon came to light between the entrepreneur and the new vice-president who came from a large corporate environment. One continued to intervene and change things at a micro-management level, the other tried to establish rigorous processes and controls. Many staff members reacted to this difference of opinion and frequently sided with one or the other. They considered the entrepreneur as a bully, or they considered the VP as too weak. Management must speak with a common voice (at least publicly) in a growing business.

In addition to badly defined roles and responsibilities, the lack of defined limits of authority of the senior people was the apparent key issue. A significant number of people expressed frustration at the confusion between who was responsible for what and the absence of limits to what a senior manager was allowed to do. Formalizing and standardizing this could solve this.

SFIA Responsibilities
The 7 levels of responsibility in SFIA

This involved clear definitions of roles, responsibilities and authority to ensure that people their role and position in the company. It also led to the creation of separate teams that worked, according to Agile-Scrum principles to be able to rapidly deliver upgrades to their standard product. In addition to this, the recommendation was that the roles, responsibilities and authority should be defined using a table of skills and competencies similar to that proposed by SFIA.

Organizational Therapy

The approach taken in these three businesses was based on what I have been calling “organizational therapy“.

This is a process through which I proceed through a series of interviews, starting with senior management and moving through the various layers of the business up to the people doing the “real work”, those who are actually building the product and delivering the services, the “factory floor”.

In most businesses (and I have been an international consultant for over twenty years, and an employee in a number of companies for over forty years) The disconnect between management and team members is found to be the main issue regarding quality and performance. You expect this in large multinationals, with a distant executive team on the top floor and 15 layers of middle management. However, you need to recognize it in small and young companies where the director is known and accessible to all members of staff.

The Problem with hierarchy
Traditional hierarchy, with many people trying to control the few who are developing

And yet…

Small companies, start-up companies are frequently run by an entrepreneur who has too much power. It is difficult for them to understand that things have moved on and that some form of formal, structured management is now required in a growing business.

By communicating the failures caused by the absence of structure to the management team, I help them understand the urgency, but, as long as they do not see the frustrations of those people that the form the base of the business, the ones who are actually producing what your clients want, they probably do not really understand the problem, let alone acknowledge their own limitations.

Conclusion

Entrepreneurs are usually great at the creation of businesses, products and services; they are rarely suited to manage a growing business. An entrepreneur wants to be involved and know everything that is going on in the business; a manager needs to be able to step back.  The three breaking points at which an entrepreneur can expect to lose control are when you get more than 20, 50 and 100 employees. At those points, the whole culture changes. When there is a probability of reaching one of these breaking points, it is important to be prepared. Communication, processes and metrics, reporting structures need to be designed and defined. If you let them evolve organically, they are likely to be wrong.

These problems can be resolved with an independent, confidential discussion with employees. The conclusions of which are redacted and reported.

Change is important, pragmatic improvement is critical.

Skills Management and More

I was recently requested to give a short talk at the launch of “Today Software Magazine” in Cluj (Romania). As this was very much at the last minute, I did not have the time to prepare my talk as much as I would normally do. However, I am happy to share it.

Foreseeing the Future

As a new year starts, it seems that (nearly?) all journalists are busy making their forecasts for the future. Of course, at the end of the year, we may be given the opportunity to look back at their predictions and see how wrong they are. They are currently predicting that President Trump will not last the year, or that he will last but not get reelected next year, or that he will get reelected, or that he will be in prison, or that he will stand down in exchange of amnesty, or just about anything else. As we listen to these predictions, we must think to ourselves that these journalists don’t really know or believe themselves what they are saying – it is mostly making predictions based on personal desires or fears…

And yet, in business, we believe that all estimates need to be contractually binding, transformed into deadlines, with penalties for “non compliance” should a delivery be a day late. I have already written about estimating problems, so I will not return to that topic.

However, I do want to remind you that an estimate, ultimately, is just guesswork. Perhaps you have a lot of data to demonstrate that, in the past, this was how long something took; perhaps you have done a statistical analysis and can show root causes of variations, but it is still, in the end, just a guess.

When requesting an estimate from someone, you should always ask for a confidence level. I tend to recommend an estimate to be provided in the form of an S-curve:

S-Curve
Probability and deviation in estimating

This approach allows you to say that you will only feel 100% comfortable if you are given at least x (in this picture, 703 days) to complete the project. If you want to negotiate down to 500 days, I feel 80% comfortable that we can deliver; if you are willing to take the risk, we can work together.

A consequence of this is that, as I have frequently said:

  1. an estimate should never be translated into a deadline;
  2. always make sure that you are clear why you are asking this and what you plan on doing with that estimate.

Language is tricky. If you request an estimate, a forecast or a prognosis, you may get very different data depending on how people interpret that word. If you request a projection, an evaluation, an assessment or an opinion, who knows what you might get in return.

But remember, ultimately, it’s just a guess.