A 2 x 2 analytical framework for identifying who you’re dealing with. Doodled while trying to explain the difference.
This morning my husband contacted me from a different time zone. He’s working as part of the leadership of a growing company, and they are trying to articulate their core values to support their rapid growth. They are very smart people, and want these values to be strong and meaningful. My husband asked me if there was a short article that describes what core values should be.
I obliged him thusly:
A company’s core values should
1. Embody a sense of purpose and aspiration
2. Establish the key values that will guide decision-making – especially hard ones.
3. Highlight what is distinct about the personality or approach of the organization – a powerful statement of “who we are”. Are you funny? Offbeat? Fearless?
4. Be expressed and espoused equally both internally to rally the team, and externally to make an impression in the market
6. Apply to all employees equally.
5. Be authentically lived – leadership should constantly be looking to embrace – and show the team how they embrace – those values. They should also bring them up and remind the team of them as decisions are being made, and encourage the team to do the same.
This is not a trivial exercise. Not to be quickly typed out over a weekend.
Who do you want to be? What do you want the journey to look like? What would like like people to admire about you? What would you want your team to admire about each other? These questions require consideration. Lots of listening and honesty. The kind of listening and honesty that’s rare in business.
I further suggested that the best way to get there was via conversation rather than editing documents of any particular kind.
I look forward to seeing where they land on this issue. They are a remarkable team doing remarkable things, and I hope they find their way to articulating values that reflect that. I wish the same for you, of course.
We’ve been seeking enterprise 2.0 and social business for several years now with some notable success, but still quite a lot of “vague,” and some level of fatigue.
We have found some easy fixes (employee social streams), and discovered challenges that are devilishly difficult (aligned and coordinated, but still autonomous action and decision-making, or convincing boards of directors that sometimes employees and customers need to precede shareholder value).
The recent announcement by Zappos that it was changing its organizational structure to a “holocracy” suggests that forward-thinking companies are taking it all very seriously. They recognize the emerging proof that a more collaborative organization is a more profitable one.
So what does this mean for the rest of us? What of big, hierarchical, traditional organizations – especially public ones – can they change? Should they? How can we make this happen? Now command and control is only one of several recognized models of leadership and organizational design. Alternatives are no longer fringe ideas, but increasingly mainstream.
Organizational design has a huge impact on decision-making and collaboration, and both reflects, and often creates, the level of collaboration and autonomy with and amongst the workforce. Culture may eat strategy for lunch but decision-making, reporting and budgeting structures can either birth or strangle both culture and strategy with both hands tied behind its back.
At this stage we have four primary organizational models along a continuum from command and control to cooperative and anarchic. From GM to Valve, we might call it with a Basecamp and a Zappos thrown in to complete the picture. Each has strengths and weaknesses.
This new diversity of models is a good thing, and in the long run different orgs will benefit from different models. What works, for example, in an R&D environment may not work in retail or restaurants (Or maybe it will, eventually.)
What are their relative strengths and weaknesses? What could catalyze a shift from one model to the next? Some reflections:
1. Command and control (push) hierarchies.
We are all familiar with this. Decisions are made at the top by one or a few people and pushed down to people who are expected to act on orders, not to question them. Those below the point of decision-making are rarely asked to contribute to a decision. Discipline is strict. Fear is the primary motivator along with the potential to rise in the ranks.
- Consistency: Reliable, repeatable systems.
- Rapid, if not always optimal, decision-making.
- Efficiency of scale, in many domains.
- Thrive in in highly stable environments, and can use relatively unskilled or illiterate workers (some will argue that they are “exploiting” rather than “making use of”)
- Inflexible. These organizations are not quick to learn, or change in response to changing events. This depresses innovation, along with most employees that have achieved any level of consciousness themselves. There are exceptions of course.
- Employees are only rarely engaged or committed to the work. They may or may not be aligned with a mission that they may or may not understand.
- Capabilities are generally limited by the decision-makers themselves. So the strengths and weaknesses of the oligarchy are in effect the strengths and weaknesses of the entire organization, for better or worse.
2. Pull hierarchies
Decision-making is still concentrated at the top. The difference between push and pull hierarchies is management style and communications pathways. Management “pulls” insight and contributions from the team. Leadership approach is the key difference. Leaders ask their teams to inform answers and decisions. Leaders are meant to help their teams collaborate, grow as individuals, do great work, build mastery and commitment from their teams in service to a mission or purpose that is broadly recognized.
Strengths: More Rapid Learning, high(er) employee engagement, more flexibility and innovation than pull hierarchies. Leaders encourage and value collaboration, recognizing the difference between leadership and management. The potential of collaboration, diversity are better captured. Employees are more respected for having information and capabilities that management doesn’t.
Weaknesses: Success depends on leadership capabilities and philosophies of each manager. Decision-making can be complex, slow, and ambiguous. Conflict has the potential to undermine the model – it works well when things are going well, and can seize up when times are hard. There are few formalized practices for dealing with conflict, so a lot depends on people’s willingness to cooperate. These organizations are often uneven, with some managers or leaders understanding their role well, and others taking a more C&C approach.
How to transform a Push to a Pull Hierarchy:
Change leadership – to make the change from push to pull, one must either change the hearts and minds of existing leadership or replace them wholesale. The challenge is that this is almost always a gradual and uneven process, difficult to measure, and can create lots of conflict in the transition. The transition depends on the conversion of the former command and control leadership. While some grassroots efforts have impact in some teams and some organizations, ultimately it is the commander in chief – in whatever guise – that must buy in to make it work.
Holocracy is new to me. I learned about it along with most of you, around the time of the Zappos announcement that it was going hole. Many fine writers have commented on this structure. Steven Denning’s somewhat skeptical review of Holocracy was the first I read, and I followed a number of his links to original sources of Holocratic thinking. In essence, the business becomes a hierarchy of self-directed and self-organized teams, governed by a constitution (at least it’s not a manifesto.) This is somewhat reminiscent of the early work in Agile software development, with which it has some values and processes and general concepts in common –a ritualized structure and process for achieving highly flexible organizations.
Holocracies are purpose-driven and use well-defined processes to of distribute decision-making. One of Holocracy’s proponents wrote an interesting response to the Denning article. He is from a company called Holocracy One. Holocracy is their brain child and a registered trademark. Hmm.
Strengths: Distributed decision-making and self-direction better capitalize on human potential. Rituals and procedures oversee potential areas of conflict, clarifying decision-making in areas that a pull hierarchy struggles with. This theoretically will maximize learning, business outcomes and individual development.
Weakneses: The general public doesn’t have much exposure to real life holocracies yet. Zappos is not the first to go Holocracy, but it is the largest. We aren’t familiar with how it scales. I would not be surprised if Holo followed a similar path to agile in terms of becoming a mainstream idea over the course of a couple of years, adopted by some and mangled by many, if not most.
How to change form a Pull Hierarchy to Holocracy:.
This would require deep commitment from the board, the c-team and their core teams. It would require extensive education and training for the entire organization. It is a wholesale and intentional re-org.
Did Zappos fire all the managers? Get them to agree to non-manager roles? Convert them all to “team leaders”? Adjust their salaries? Did they need to? Did they have a month of company-wide training in Holocracy practices and procedures? I haven’t yet found any information on this. It would be interesting to hear how this reorg is being received now and how employees will feel about it a year or more from now. It’s a gutsy move, and I applaud it, but wonder how it will work in reality.
Some information: Wirearchy is a term coined several years ago by Jon Husband. It’s a perfect term for the emergent, collaborative structures of a heavily connected community of peers. It gives a name to a kind of idealized organization – what Stowe Boyd would call a cooperative. It focuses on creating and sustaining flows of information. One could argue that Valve is sort of a wirearchy (thought it could also be a variant of an holocracy). Valve describes its approach as “spontaneous order” and actually have a very interesting economist thinking through their organizational challenges with them. They consider their organization an economy of merit. (The next big discussion we need to have about all of this is the role of scale and emergence. Emergent entities like economies (and cultures) act very differently at different scales.)
At valve, employees choose which projects they want to work on and how much time to devote to each. The idea being that the best ideas and people will draw in the best resources.
Strengths: optimizes individual contribution, emergence and opportunity space.
Weaknesses: Top-down planning extremely difficult. Ensuring coverage of the mundane can be extremely difficult. Outstanding, but potentially unreliable results. (By unreliable, I really mean unpredictable. Which is ok, in many situations, but may not be in life or death situations. This is where we still have a lot of learning to do – this balance on the edge of optimization and rigor, emergence, resilience and dependability. Faith and knowledge. Where business begins to resemble eastern philosophies.)
This type of organization may work best at very small or very large scale. The middle places –where the vast majority of business is done – is tricky.
How to transform a Holocracy to a Wirearchy: I am not sure you can. It would be a matter of faith. It would have to be undertaken in such a way that the downside risks of unpredictability are low – either because there isn’t much to lose or worry about.
This may be the kind of structure that you need to be born into. An organization born with these principles will have a vastly greater opportunity to succeed than a command and control organization that dreams of something different. The change would challenge every notion of business, making the transition painful and difficult for existing people.
Do Hierarchies dream of wired sheep?
If you believe that “command and control” never dreams of wirearchy, you may be wrong. In many large organizations, especially the ones where the outcomes are “real” – beyond shareholder value – I’m talking about hospitals, and government, and energy and the military and education – people are recognizing that there are new models out there. There is a nascent optimism that the intractable problems of generations shimmer with new potential. That in a giant leap of faith, we can step away from our expectations of the past and reimagine a future without limits.
You may not travel far down this path with any one organization. Or perhaps you may. The profound thing here is that there are real options and real experience to begin to learn from. We are no longer limited to the idea that one model fits all. It’s a new opportunity to be creative and to test centuries old assumptions.
Go forth and report back, please.
The best is yet to come.
In 2014 Business will embrace the intangible.
The first step is to measure whatever can be easily measured. This is OK as far as it goes. The second step is to disregard that which can’t be easily measured or to give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can’t be measured easily really isn’t important. This is blindness. The fourth step is to say that what can’t be easily measured really doesn’t exist. This is suicide.
– Robert McNamara as attributed by Thomas Handy in The Empty Raincoat
In the 20th century business success sprang from the combination kind of property rights (intellectual or physical), process and efficiencies of scale.
But in the 21st century we are rapidly accumulating data that suggests that the new competitive advantages are both much simpler and more complex. (Not that value chains, and differentiation don’t still matter, but scale is now definitely a matter of debate.). The new, primary source of competitive advantage is customer satisfaction and innovation. Studies suggest that the most effective way to ensure customer satisfaction is to have employees who give a darn and are empowered to act.
There’s another 20th century reality as well. Complexity. Complexity is (a lot of things, some of them very precise, but for the purposes of this discussion…) the state of being which is either intrinsically impossible to understand by traditional rationalist methods, or where the cost or time involved in such analysis makes it impractical for the time being.
It is these two big truths – the shift in competitive advantage, and the paradigm-shifting complexity that now defines our world, that are the real motivators behind the shift in business toward new humanistic models.
There are a few unacknowledged side effects of the shift, but perhaps the weirdest is the fact that business is now highly dependent on intangibles. We must accept things we do not understand, act in environments where cause and effect are nearly impossible to discern, and deal with the paradox of needing to think holistically and intuitively while existing in a constant state of data saturation.
So – what kind of intangibles, and what do we do about it?
My prediction is that in 2014, you’ll see these words at the center of important conversations, along with research and experimentation that leads to deeper, more actionable understanding of each. (Send in the philosophers for some of this).
In 2013 I wrote about the importance of intention, how it colors our perspective and nuances every decision and every act. Moreover, intention is a uniquely human (or at least organic) capability to both set and discern. This is why authenticity rapidly became so important. Authenticity is a very specific intention and people are viscerally capable of detecting it, like we can symmetry.
How do we understand wickedly complex situations? Through narrative. People are exceptionally good at inferring patterns and meaning. Narrative can frame a wicked problem in a way that we can share it, discuss it, make inferences, and create a vision of the future. The trick of course is that narrative takes some intangible skills to build, and is not absolute. There is no one narrative, there can be many. But the way a certain narrative frames the problem (is light a wave or a particle, is data a privacy or a property issue?) can profoundly affect what we are able and willing to do with those ideas.
The overused and very poorly understood emergent behavior of a human community. It matters. You know why? Because customer satisfaction and innovation depend heavily on it. And yet we are incapable of talking about it intelligently – yet. A recent HBR blog suggests a not terribly unique but inarguably correct list of things many good cultures have, but makes no suggestion as to how we achieve those things. There are some theories. I have some myself, but we’re going to start to get serious on this issue. We have to.
Seriously. Leadership of the advanced seeker mentality. Leadership that asks questions, inculcates values and intention, narrates intention, mission, and purpose, that constantly balances confidence and humility. Leadership with the intention of building more leadership. The Charlene Li 2,0 leadership, will begin to emerge from myth and legend and the yeah, but what about Steve shadows, and start to get serious. How do we build it, recognize it, and most importantly install and sustain it. Other forms of leadership will be failing at a pace that becomes noticeable.
Yikes. Who am I? What is human? How much of my identity do I own? Do I have identity rights? Are they the same or different from privacy rights? Singularity, transhumanism… these topics leave the world of freaks, sci fi, “Futurists” and other fringe places and become an important part of civic dialog.
These topics, among others, will stop being airy-fairy stuff. They will be the stuff that business is investing in. Whether we can measure it (now) or not. This century will depend on the immeasurable, the intangible, the unpredictable. Business will develop a… kind of faith …. In the complex systems and the wondrous things that (can) emerge.
The best is yet to come.
Let me explain. The happiest man on earth would be able to use the Mirror of Erised like a normal mirror, that is, he would look into it and see himself exactly as he is.” — Albus Dumbledore to Harry Potter
I am beginning a new journey in a new role as a marketing leader. As such, and fresh from a delightful coffee with @mpedson, I think we need to talk about marketing.
What Marketing Was
Traditionally, marketing has been fundamentally manipulative. Marketing was designed to make products (and brands) desirable by whatever means necessary or possible.
(If you are not a Harry Potter fan, then get reading. The few nights of sleep you’ll lose reading them are a very reasonable price to pay.)
In the first book we find poor orphaned but magical Harry around about the castle, where, in an old and unused room, he finds the Mirror of Erised, in which he sees his deeply yearned for and long gone parents. Ron, sees himself holding the big trophy. The mirror, as you well know, shows people their deepest desire (hence the name).
Traditional marketing tries to put its brand or product in your Erised reflection. It wants you to want it (with some apologies to Cheap Trick). It strives to make things an object of desire that you happily pay for.
What Marketing Can Be
Marketing 2.0 (or enlightened or social or what have you modern marketing) is a different thing altogether. The idea is to put you back in the mirror — you, slightly better. But the very best marketing, the marketing I aspire to, my Erised, shows an improved you in the mirror, along with a real, credible way to get there.
In plain(er) English, it’s like this: Every human wants the opportunity to aspire, to be something a little bigger, a little better. The goal is to build a company that helps people do that. Helps its employees, its customers, partners and the world think a little bigger, be a little better.
The new marketing is about building a bridge on the back of a slightly guilded self-Erised reflection, right to the place where the treasure is stored.
That’s the point of thought leadership, the point of content marketing. The point of Nike ads telling us to walk away from the notion of greatness as reserved for the chosen few, and give it back to each of us.
Marketing, as I try to practice it, is about helping us all to find our greatness.
The best is yet to come.
You’ve may have already noticed that the mobility is issue over and done. In fact, mobile, social, wearable and the internet of things have converged. What remains is to understand what it all means. What just happened to us?
Sitting in Starbucks a few months ago with my 8-year old daughter, we were playing 20 questions. She chose an oddly specific creature, a black and white warbler, but she had a spotty knowledge of its habits. Turns out she was doing a little research project on the bird. She knew its song and its size, but not its habitat. So with my iPhone and Starbucks free WiFi, we Googled the bird, and were able to find facts, images, and even hear its song. Mobile can be beautiful.
Super powers and Artificial Senses
Your iPhone, or Android, or whatever, may be in your hand more than your car keys, your silverware and your loved ones combined. It gives you superpowers. You have in your hand a super-human sense of everything from location and speed to radiation, food freshness, proximity, blood pressure and much more. It also gives you constant access to our “continually improving, communal, prosthetic memory” (thank you, Gibson), known as the internet (I have always found the capitalization of internet disturbing. Don’t do it. Just live with the green underlining.)
Your phone also gives you, should you choose to accept it, a constant awareness of the world around you – whether its telling us about the latest sports hero or dictatorship to go down, Bezos buying the Washington Post, or the earthquake you’re about to be rattled by. We have constant contact with our kith and kin. It gives you protection in uncertain circumstances and aid in emergencies. It can be a Geiger-counter, a blood pressure monitor or more. It gives you freedom. Certainly it gives my kids theirs – I’d never let them roam untethered.
We have seen phones, connected to social networks, catalyze the fall of tyrannical regimes, and coordinate aid in disasters. We’ve seen them both record and create historic events. The medium is indeed the message. [McLuhan understood so very deeply, so early. Of course he was also witnessing a social revolution. The 1960s and 70s reexamination of social mores hardly compares with the revolution we are seeing today, but today’s social refactoring will play out over a longer time horizon. Maybe.]
A third way – neither animate nor inanimate
There is no longer a simple dichotomy between animate and inanimate objects.
There is a new class of objects. I’ll call them signalers. They are objects that send signals. These include your phone of course., along with many other things. Soon to be a nearly infinite number of things. Your thermostat, for example, always was a sensor. It sensed temperature, and turned on or off your furnace accordingly. Your Nest, however, does more. It monitors, and adjusts, but also attempts to record patterns and adjust according to those patterns, which is interesting, but still not the point. The point is that Nest knows when you are likely to be home and your temperature preferences and it is iphone app controllable, which means that data is stored in someone’s cloud. Not your cloud. This is true also of your GPS, of course.
Your box of cornflakes is not a signaler, but a signal. When you buy your cereal, it is scanned. The price is displayed and added to your grocery bill. It is also logged with the grocery store inventory processes, and, of course their marketing database. Because the supermarkets now give very large discounts for joining their clubs, along with gas discounts and others – few of us are radical enough to resist joining. Not to mention the fact that this same information is also registered with your financial institution because you probably paid with another signaler – a bank card or credit card. This began decades ago, but back then they were collecting data with little ability to do much with it. Well big data has come a rather long way – and now Target can detect your unwed teenage daughter’s pregnancy before you can.
Now objects can see you back.
We are used to being anonymous in an inanimate world. No longer. Your objects are pumping you information at the same time as they are pumping it back to some central location. Who’s watching and why? The government is watching some of it, and you can be certain that the company who sells or services your object/service is also watching. Probably to maximize their profits, and sometimes to also maximize your enjoyment. Apple wants to know what you listen to so that they can sell you more. Target and Safeway want your information so that they can sell you more. The government wants your information to track down bad guys, or possibly for other reasons such as public health or protection of civil rights (rather than, we hope the suppression of them).
In 1995 I was working for a now-defunct startup where I played with complexity theory. FedEx hired us to do a tiny project for them.
They were exploring smart packaging. If packages were imbued with certain kinds of intelligence, would they be able to smartly route themselves along the most efficient route? Routing millions of packages globally throughout the world is a very hard problem. Optimizing the routes is extremely difficult – especially when you need to deal with things like scheduling changes, weather events, natural disasters and so forth. So FedEx was exploring the notion that the best possible solution to route optimization is to allow the packages themselves to detect and connect to their local environment and make their own routing decisions locally.
My simulation, of course, showed packages routing themselves around the world very efficiently, gracefully rerouting themselves around obstacles and dramatically reducing overall transit time for the system compared with the traditional centralized, predetermined routing system.
Those packages were not exactly inanimate. They were smarter than your box of cornflakes. They were like robots in that they could detect and react, and they can phone home.
For now, as you’ve noticed, FedEx put barcodes on every packages they are, like your box of cornflakes, signals, for now.
The pervasive internet of things. Privacy, Prism and a very big question
But just like in the grocery store, the benefits have a quid pro quo – the GPS means I’m rarely lost anymore, but it also means that someone can know where I am – at all times. So does the phone company, and possibly the NSA.
So we have a new, urgent and mind-blowing privacy debate to have.
Here’s the truth. If you are storing information anywhere but within the confines of your house, you can be certain that someone other than yourself can see it. This means your cable box, your social media accounts, your Nest thermostat, your phone are conduits for others to see the most intimate details of your life.
Have we technologied ourselves out of privacy? Is the only truly private person a cash-wielding, non-cellphone, no-club card, AAA map-folder? An anachronism? Turning on your car or your kitchen lights with your iPhone is very cool, extremely convenient, but also logged in someone’s database.
Is there a right to privacy? If so, are private companies restricted in the same way as governments? The bill of rights, read a certain way, is a list of curbs on governmental powers, but they also dictate the rules of society and commerce. Should there be warnings on your credit card and GPS that explicitly say what data is collected and to what purpose? Should this sort of thing be allowed at all?
If it is unacceptable for our government to monitor our communications and movements and finances for the purposes of national security, is it tolerable for AT&T and Wells Fargo to do the same for purposes of revenue?
The right to privacy is not listed in the U.S. constitution and was brought into the public debate in the Roe v Wade decision in 1973. We have many rights that come a a very high cost. Free speech for example. Miranda. We have anti-slavery laws (including, most importantly, modern minimum wage and worker safety laws).
I came across this legal brief by two Supreme Court judges:
Recent inventions and business methods call attention to the next step which must be taken for the protection of the person, and for securing to the individual what Judge Cooley calls the right “to be let alone”  Instantaneous photographs and newspaper enterprise have invaded the sacred precincts of private and domestic life; and numerous mechanical devices threaten to make good the prediction that “what is whispered in the closet shall be proclaimed from the house-tops.
Would you be surprised to learn that this was written in 1890 by Judges Warren and Brandeis?
Public data can aid in public health, democracy, safety and our understanding and access to the world. This talk, by Jennifer Pahlka shows how public data is, in fact, the basis of American Democracy, and that it is essential that we grow and protect its integrity. It can bring critical resources to those in need. It might build a more just and civil society. It might also shift power – that is to say information and knowledge – into another resource like money – that governments and phone companies have lots, and citizens have little, and little hope of achieving it. We’re going to have to decide how we want this to go, and start experimenting with the rules and regulations we’ll need to get us there. Where will we compromise?
And so we get back to intention. Is society’s intention to maximize profit or to maximize prosperity – life, liberty and the pursuit of happiness? What unimagined extensions to human capability and prosperity will pervasive computing bring us? In what way will it refactor our expectations of society and our role within it as individuals?
The best is yet to come.
This post originally appeared in CMSWire.
Title image courtesy of loop_oh (Flickr) through a Creative Commons Attribution-NoDerivs 2.0 Generic license