11/26/2007
Last week's column set some readers' teeth on edge (Why Johnny Corporation can't learn, Keep the Joint Running, 11/19/2007). The issue was its negative tone.
The column explained why corporations rarely learn from their mistakes and even more rarely learn from their successes. "Don't bring us problems -- bring us solutions," was the gist of the complaints.
Fair enough, so long as we all agree that unless you understand the underlying dynamics of a problem you're unlikely to find a solution.
Solutions to these two problems are especially tough to implement because doing so calls for challenging some very popular business beliefs and practices. In particular, companies that truly want to be "learning organizations" will have to thoroughly and deeply re-think their approach to accountability, to metrics, and to compensation.
The first, and possibly most important step you can take is to give up one of the most cherished notions in American pop business culture -- the need to hold people accountable. KJR has covered this subject before (see The dark side of accountability, 11/3/2003).
Among the many disadvantages of a hold-people-accountable business culture is that it pretty much guarantees that anyone associated with a mistake will do everything possible to hide it -- to sweep it under the rug, bury it in a quarry, or put sawdust in the crankcase and call it a mint-condition classic.
Or, if there's no way to hide the mistake, they'll find some poor schnook to serve as a scapegoat. Root cause analysis? The root cause is that this schnook here caused the problem.
Think anyone will admit to a mistake under these circumstances? Of course not.
So Lesson One in creating a learning organization is to create a culture of responsibility. That means consistently praising everyone who identifies mistakes and takes the lead in fixing them, without ever paying the least bit of attention to who made the mistake in the first place.
The next place to look is metrics. Last week's column pointed out that when your metrics define failure as success and vice versa, they guarantee you'll repeat and extend your mistakes because you always get what you measure.
The best metrics assess your progress toward real, meaningful goals. They aren't proxies or indexes, and they don't assess intermediate results.
To illustrate, imagine three police departments. The first measures success by the ratio of arrests it makes to crimes committed. The crime rate goes up, not down, because the city's peace officers are insufficiently concerned about determining who actually committed each crime, and even less concerned about making sure the evidence they present isn't thrown out because of irregularities.
The second police department, headed by wiser leaders, measures the ratio of convictions to crimes. Much better. For the most part, its officers take care to arrest only those who seem to be guilty.
Much better, but still not as good as the third police department, which measures its success in terms of overall public safety.
Which is why Lesson Two in creating a learning organization is to choose your goals wisely and measure them carefully. Doing so points you in the right direction and makes sure you know success and failure when you see them.
Lesson Three is simply stated but difficult to put into practice: Align compensation. It's particularly important if you want to learn from success.
This isn't a matter of rewards and motivation, because compensation, properly understood, isn't about rewards and motivation. It's about the most tangible form of communication a company has -- what it pays for. To understand this point, compare these two phrases: "Here's what we want you to do," and "Here's what we're paying you to do."
The latter packs a much stronger punch, don't you think?
Aligning compensation means defining acceptable performance as delivering results and strong performance as delivering repeatable results. Exceptional performance? That means repeating the results of others, not having them repeat yours.
Whether the subject is reusable software modules, successful business practices, or borrowing another employee's PowerPoint deck, if you want a company that learns from its successes you had better provide the highest compensation to those employees who find those successes and learn from them.
Even this is dangerous, by the way. Because if you aren't careful you'll stifle innovation along the way.
It has to be that way. Learning from success means you don't reinvent the wheel.
Innovation means you do.
-----------------
Copyright and other stuff -- The great KJR link point
Tuesday, November 27, 2007
Tuesday, November 13, 2007
De-verticalization and other random ideas
11/12/2007
Apple creates brilliant user interfaces.
Macs are much cooler than Windows PCs. If OS/X is a Lexus, Windows is a Chevy Lumina. (Linux on the desktop, is, by extension, an AMC Pacer.)
The iPhone is so cool most people think it does something my Treo doesn't, although they aren't sure exactly what. So why can't it fast-forward my music?
But this isn't a column about user interfaces. I'm not really sure what it is about. Let's keep going.
Maybe it's about technology. We just mentioned the ultimate in cool. Now let's look at something very hot: Software as a Service (SaaS).
SaaS is hot. I can't get over the nagging feeling that it's hot only because the IT trade press acts more like a bunch of cheerleaders who can't dance very well than like journalistic enterprises.
Dale Vile of Freeform Dynamics, writing in The Register -- one of the few exceptions to this complaint -- points out how poorly SaaS has been accepted in real-world (as opposed to press-released) enterprises. Other than SalesForce.com, where is it? (See Rewriting the SaaS laws for more).
eWeek is more optimistic (10 Things You Should Know about SaaS, no byline, Gartner, AMR Research and Forrester cited as sources). Interestingly, while it says only 20% of all SaaS implementations are CRM (read SalesForce.com), everything else in its report is about SalesForce.com. I wonder why.
No, actually I don't.
As Vile points out, SaaS is an excellent choice for narrowly focused solutions that don't require a high transaction volume, tailored configuration, or significant integration with other systems.
Situations, in other words, that are also solved easily with shrink-wrapped software.
Deep down I know SalesForce.com must provide something important to the enterprise that it couldn't get with Act! or Goldmine. I just don't know what, other than redirecting service desk calls from those annoyingly demanding salespeople to an outside vendor.
Huh. That can't have been the topic either. I don't have anything else to say about SaaS that I haven't said before (Trend, fad, or blah blah blah? Keep the Joint Running 2/13/2006). Let's try a former hot trend: Internet telephone services.
A couple of years ago, before the patent infringement suits, Vonage and Skype were hot.
(Definitely not the point, but a thought I feel like sharing: I'm going to apply for a business methods patent. The business method is applying for patents on obvious and pre-existing ideas, then filing hundreds of nuisance suits to become rich for no apparent reason. With the patent I'll sue anyone who files nuisance suits based on stupidly awarded patents.)
Where was I? Internet telephone services. Hot or not, they are interesting. Not for their technology, but for taking de-verticalization to the consumer sector.
Once upon a time, telecommunications was completely verticalized. AT&T wasn't just a monopoly. It was a seven-layer monopoly. It owned the entire protocol stack, from the physical layer (the wires) all the way to the application layer (telephony).
Then came Carterphone and MCI. They didn't just break the monopoly. They also de-verticalized telecom. MCI provided only the network layer. Carterphone provided only the application layer. (Some companies -- aggregators (also called "aggravators") -- service only the invoicing layer.)
Internet telephone services do for consumers what PBX vendors did for the business marketplace years ago. They separate the network from the telephony applications.
In doing so they have achieved something else that's even more notable: They make it possible to buy telephone service from a retailer.
Which brings us to the point of this column (hey, it has one after all!) -- a prediction: Vonage and its competitors represent the end of the line for the cellular networks. It will take a decade or more, but it will happen, because cellular providers aren't retailers. They're telecommunications companies.
Choose any cellular provider. Go to its website. Try to figure out what you'll have to spend. Look at your cellular bill. Try to figure out if it's right.
Now go to any of the Internet telephone company websites and figure out what you'll spend and what you'll get for it. Something miraculous will happen -- you'll find you can. The Internet telephone companies think like retailers.
We'll still have to wait a decade or more because we won't have a ubiquitious WiFi mesh until then. The rule is old but it's still valid: Innovation is fast, but infrastructure is slow.
Once we do have ubiquitous WiFi, we'll be able to take our WiFi Internet telephones with us. Then we'll use them instead of our cell phones to become distracted while driving so we can crash our AMC Pacers into a tree without noticing.
Much better.
-----------------
Copyright and other stuff -- The great KJR link point
Apple creates brilliant user interfaces.
Macs are much cooler than Windows PCs. If OS/X is a Lexus, Windows is a Chevy Lumina. (Linux on the desktop, is, by extension, an AMC Pacer.)
The iPhone is so cool most people think it does something my Treo doesn't, although they aren't sure exactly what. So why can't it fast-forward my music?
But this isn't a column about user interfaces. I'm not really sure what it is about. Let's keep going.
Maybe it's about technology. We just mentioned the ultimate in cool. Now let's look at something very hot: Software as a Service (SaaS).
SaaS is hot. I can't get over the nagging feeling that it's hot only because the IT trade press acts more like a bunch of cheerleaders who can't dance very well than like journalistic enterprises.
Dale Vile of Freeform Dynamics, writing in The Register -- one of the few exceptions to this complaint -- points out how poorly SaaS has been accepted in real-world (as opposed to press-released) enterprises. Other than SalesForce.com, where is it? (See Rewriting the SaaS laws for more).
eWeek is more optimistic (10 Things You Should Know about SaaS, no byline, Gartner, AMR Research and Forrester cited as sources). Interestingly, while it says only 20% of all SaaS implementations are CRM (read SalesForce.com), everything else in its report is about SalesForce.com. I wonder why.
No, actually I don't.
As Vile points out, SaaS is an excellent choice for narrowly focused solutions that don't require a high transaction volume, tailored configuration, or significant integration with other systems.
Situations, in other words, that are also solved easily with shrink-wrapped software.
Deep down I know SalesForce.com must provide something important to the enterprise that it couldn't get with Act! or Goldmine. I just don't know what, other than redirecting service desk calls from those annoyingly demanding salespeople to an outside vendor.
Huh. That can't have been the topic either. I don't have anything else to say about SaaS that I haven't said before (Trend, fad, or blah blah blah? Keep the Joint Running 2/13/2006). Let's try a former hot trend: Internet telephone services.
A couple of years ago, before the patent infringement suits, Vonage and Skype were hot.
(Definitely not the point, but a thought I feel like sharing: I'm going to apply for a business methods patent. The business method is applying for patents on obvious and pre-existing ideas, then filing hundreds of nuisance suits to become rich for no apparent reason. With the patent I'll sue anyone who files nuisance suits based on stupidly awarded patents.)
Where was I? Internet telephone services. Hot or not, they are interesting. Not for their technology, but for taking de-verticalization to the consumer sector.
Once upon a time, telecommunications was completely verticalized. AT&T wasn't just a monopoly. It was a seven-layer monopoly. It owned the entire protocol stack, from the physical layer (the wires) all the way to the application layer (telephony).
Then came Carterphone and MCI. They didn't just break the monopoly. They also de-verticalized telecom. MCI provided only the network layer. Carterphone provided only the application layer. (Some companies -- aggregators (also called "aggravators") -- service only the invoicing layer.)
Internet telephone services do for consumers what PBX vendors did for the business marketplace years ago. They separate the network from the telephony applications.
In doing so they have achieved something else that's even more notable: They make it possible to buy telephone service from a retailer.
Which brings us to the point of this column (hey, it has one after all!) -- a prediction: Vonage and its competitors represent the end of the line for the cellular networks. It will take a decade or more, but it will happen, because cellular providers aren't retailers. They're telecommunications companies.
Choose any cellular provider. Go to its website. Try to figure out what you'll have to spend. Look at your cellular bill. Try to figure out if it's right.
Now go to any of the Internet telephone company websites and figure out what you'll spend and what you'll get for it. Something miraculous will happen -- you'll find you can. The Internet telephone companies think like retailers.
We'll still have to wait a decade or more because we won't have a ubiquitious WiFi mesh until then. The rule is old but it's still valid: Innovation is fast, but infrastructure is slow.
Once we do have ubiquitous WiFi, we'll be able to take our WiFi Internet telephones with us. Then we'll use them instead of our cell phones to become distracted while driving so we can crash our AMC Pacers into a tree without noticing.
Much better.
-----------------
Copyright and other stuff -- The great KJR link point
Sunday, November 11, 2007
Tuesday, November 6, 2007
Taking the measure of IT professionals
11/5/2007
Take everything you think you know about employee compensation. Put it all aside (other than the last two editions of Keep the Joint Running). Read two books: Robert Austin's Measuring and Managing Performance in Organizations and Alfie Kohn's Punished by Rewards.
You'll realize that the two assumptions on which most modern compensation systems are built -- that managers can objectively measure employee performance, and that compensation systems should use those measures to create incentives for stronger performance -- are pretty much worthless.
I devoted a column to Austin's book (Can metrics be saved? Keep the Joint Running, 11/7/2005). But while I've mentioned Kohn in my books, I was surprised to discover I'd never once mentioned him in Keep the Joint Running.
I don't entirely agree with Kohn. In particular I don't agree with his rejection of praise as a leadership tool. Still, his core insight -- that compensation-as-incentive amounts to bribing employees to perform -- is what first drove me to re-think the whole subject.
Credit where it's due.
We've spent two weeks on how to structure compensation. Underneath it all is this chain of logic:
Motivating employees is something business leaders are supposed to do. The best you can hope for from your compensation system is to avoid demotivating them.
To avoid demotivating employees, compensation systems have to be fair and perceived as fair.
To be perceived as fair, compensation systems have to have clear, strong connections to both marketplace value and employee performance.
To connect to employee performance, managers must know how to assess it. Not measure it. Assess it.
In business, some employees have jobs whose performance is easy to quantify -- factory workers, for example, who process some number of widgets per hour with some (presumably smaller) number of defects.
That some employees have jobs whose performance is easy to quantify has led to the strange conclusion that all of them do. Managers who haven't fully quantified them just haven't been clever enough to manage the task.
That isn't the case. In particular, the list of IT jobs where performance can be quantifiably and objectively measured is quite short. In most shops it's entirely empty.
Stop trying to objectively measure the performance of IT staff. It isn't going to happen any time soon, and when it does it will mean we've degraded the profession to the status of an assembly line. Assess staff performance instead, recognizing that many dimensions of the job have fuzzy boundaries and subjective qualities.
Here are some ideas for what you might look for:
What each employee accomplished. Keep a list for each employee, which should include the accomplishments of teams to which they belonged. Encourage employees to keep their own lists, too. If you're leading with maximum effectiveness, you won't know everything employees achieve.
What they didn't accomplish. You want self-starters. Employees who are such self-starters that they disregard the work you assign to them, though, shouldn't be rated as highly as those who get it done. Botched and ignored assignments matter.
How their performance in quantifiable tasks compares to their colleagues. Many responsibilities aren't quantifiable. Some are. For example: Some developers plow through their share of the maintenance and enhancements queue faster than the rest, with higher levels of end-user satisfaction and fewer bugs. Value this.
The extent to which they pitched in. Sometimes there's dirt on the floor. You want whoever notices it to grab a broom and dustpan and take care of it. Stuff needs doing. You can't list it all in advance, put it on job descriptions, partition it all out, and schedule it.
How well they supported their colleagues. "Team" is an overused word. It's a team when its members align to a common purpose, trust each other, communicate well, and help each other out. You want this. Some employees do more to make it happen than others.
Good judgment. Some employees make better choices than others. The worse ones might do so deliberately through malicious obedience, or because they just can't figure it out. Regardless of the reason, employees with good judgment are more valuable than the ones who need everything spelled out thoroughly enough that their job is just painting by numbers.
Measuring the performance of IT professionals is an infinitely complex task. Assessing it, on the other hand, is not. You have to take on just three responsibilities.
The first is to know what you value. The second is to communicate it.
The third is to pay attention so you know if you're getting it.
-----------------
Copyright and other stuff -- The great KJR link point
Take everything you think you know about employee compensation. Put it all aside (other than the last two editions of Keep the Joint Running). Read two books: Robert Austin's Measuring and Managing Performance in Organizations and Alfie Kohn's Punished by Rewards.
You'll realize that the two assumptions on which most modern compensation systems are built -- that managers can objectively measure employee performance, and that compensation systems should use those measures to create incentives for stronger performance -- are pretty much worthless.
I devoted a column to Austin's book (Can metrics be saved? Keep the Joint Running, 11/7/2005). But while I've mentioned Kohn in my books, I was surprised to discover I'd never once mentioned him in Keep the Joint Running.
I don't entirely agree with Kohn. In particular I don't agree with his rejection of praise as a leadership tool. Still, his core insight -- that compensation-as-incentive amounts to bribing employees to perform -- is what first drove me to re-think the whole subject.
Credit where it's due.
We've spent two weeks on how to structure compensation. Underneath it all is this chain of logic:
Motivating employees is something business leaders are supposed to do. The best you can hope for from your compensation system is to avoid demotivating them.
To avoid demotivating employees, compensation systems have to be fair and perceived as fair.
To be perceived as fair, compensation systems have to have clear, strong connections to both marketplace value and employee performance.
To connect to employee performance, managers must know how to assess it. Not measure it. Assess it.
In business, some employees have jobs whose performance is easy to quantify -- factory workers, for example, who process some number of widgets per hour with some (presumably smaller) number of defects.
That some employees have jobs whose performance is easy to quantify has led to the strange conclusion that all of them do. Managers who haven't fully quantified them just haven't been clever enough to manage the task.
That isn't the case. In particular, the list of IT jobs where performance can be quantifiably and objectively measured is quite short. In most shops it's entirely empty.
Stop trying to objectively measure the performance of IT staff. It isn't going to happen any time soon, and when it does it will mean we've degraded the profession to the status of an assembly line. Assess staff performance instead, recognizing that many dimensions of the job have fuzzy boundaries and subjective qualities.
Here are some ideas for what you might look for:
What each employee accomplished. Keep a list for each employee, which should include the accomplishments of teams to which they belonged. Encourage employees to keep their own lists, too. If you're leading with maximum effectiveness, you won't know everything employees achieve.
What they didn't accomplish. You want self-starters. Employees who are such self-starters that they disregard the work you assign to them, though, shouldn't be rated as highly as those who get it done. Botched and ignored assignments matter.
How their performance in quantifiable tasks compares to their colleagues. Many responsibilities aren't quantifiable. Some are. For example: Some developers plow through their share of the maintenance and enhancements queue faster than the rest, with higher levels of end-user satisfaction and fewer bugs. Value this.
The extent to which they pitched in. Sometimes there's dirt on the floor. You want whoever notices it to grab a broom and dustpan and take care of it. Stuff needs doing. You can't list it all in advance, put it on job descriptions, partition it all out, and schedule it.
How well they supported their colleagues. "Team" is an overused word. It's a team when its members align to a common purpose, trust each other, communicate well, and help each other out. You want this. Some employees do more to make it happen than others.
Good judgment. Some employees make better choices than others. The worse ones might do so deliberately through malicious obedience, or because they just can't figure it out. Regardless of the reason, employees with good judgment are more valuable than the ones who need everything spelled out thoroughly enough that their job is just painting by numbers.
Measuring the performance of IT professionals is an infinitely complex task. Assessing it, on the other hand, is not. You have to take on just three responsibilities.
The first is to know what you value. The second is to communicate it.
The third is to pay attention so you know if you're getting it.
-----------------
Copyright and other stuff -- The great KJR link point
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