Productivity, creativity and spaghetti sauce

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Another great quote from Bob Sutton’s book Weird Ideas That Work: How to Build a Creative Company, this time, dealing with the face design firm IDEO:

I am also sometimes asked to talk to reports and executives from other firms about IDEO, and the question they ask most is, “Why are the people there so creative?” The short answer is the IDEO understands that, especially in the early stages of product development process, management oversight can drive out creativity.

In a world depending more and more on creativity, the fact that management oversight can drive out creativity puts a question mark around the idea of management oversight (or, as I like to call it, rules).

The more I think about it, the more I get convinced that the business world, generally speaking, is divided into two  distinct parts. Productivity driven – where the focus is efficiency – and creativity driven – where the focus is effectiveness. While one is focused on the short-term – making the most out of what we have now – the other is long-term focused – making sure we have more later. As the quote suggests and as I have written before, they operate under very different assumptions and thus convey very different concepts for effective management. And while you need to have elements of both no matter what your business is doing, the overall balance between them is important.

In the past, you could have succeeded with 80 percent productivity focus and 20 percent creativity focus. (or even less than that). Now, the world has changed. In many areas, the rate of creativity can’t keep up with the real world. When a cell-phone model becomes obsolete in six months, you can’t spend 80 percent of your time making it better. You have to spend 80 percent of your time coming up with the next model. So while focusing on making your products, cheaper, better, faster, is important and your business can’t survive without it, the important word here is survive. In order to really excel, to make breakthroughs, you not only need ti improve on what you have, you need to reinvent.

And if that is the case, then 80 percent of you management structure should be a structures that supports innovation and creativity. And guess what? The traditional hierarchical structures not only do not give the support for innovation, they actually, as Sutton points out, suppress it.

Two questions to ask:

1. In my organization how much focus is given to productivity and how much to creativity?
2. Is my management style in line with the main focus of my team/department?

The answers to this questions not only helps you better understand where you are, they will also help you understand what it is you need to do. I am not saying that efficiency is not important anymore. Organizations still need to focus on it and some departments probably should focus mostly on it. It is just that we need to stop treating it like the only answer.

Sutton’s book is called Weird Ideas That Work: How to Build a Creative Company. But if you think about it, the ideas he talks about in his book, are not really weird at all. They are only weird if you assume a productivity-efficiency focused business. And this is what we had for the last 100 years. But for creativity-effectiveness focused organizations, these ideas are not weird, they are just different.

In his famous TED talk, Malcolm Gladwell tells the story of Howard Moskowitz, who is most famous for reinventing spaghetti sauce. The greatest insight Moskowitz produced was that there isn’t one perfect way to make spaghetti sauce like everybody else thought. There are actually a few peaks of needs for different groups of people. A lot of the discussion in the world of management is based on the assumption that there is one way to manage. I know I have sometimes made this mistake. But the more I think and read about it, I understand that just like with spaghetti sauce, management has a few good recipes. You just need to understand the needs before choosing the right sauce.

Elad

Changing perspectives

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I was reading an interesting article on HBR.org about the attempts to find a replacement for GDP as the main measurement in macro economics. In it, I found this paragraph:

Advocates of a new way of thinking about the economy say focusing on Bhutan’s problems masks the deeper lessons to be learned from the underpinnings of GNH. “As a society, we have not taken the issue of time seriously at all,” said John de Graaf, founder of the Take Back Your Time movement to combat the societal “time famine” plaguing our 24/7 world: “Our focus has been on growing more, faster and faster. One of the sacrifices we’ve made on this hedonic treadmill is the sacrifice of time. Less time with each other, less time taking care of ourselves, our communities, our environmental health.”

It reminded me so much of my effectiveness vs. efficiency discussion and many discussions about long-term and short-term thinking I had here, that I had to quote it.

Our world, business, political and personal, needs to change its focus. No more myopic thinking concentrated on the more now. More thinking that looks at questions from a wider perspective and understands that most things in life are processes and not events. And this, like many other things, starts with how we measure things and what kind of measurements we put as the guides for our behavior.

Elad

Listening and not listening at the same time

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Dan Pink writes about a subject matter that I find important for every aspect of business and management (and politics). The concept of “listening to your customers”:

Give customers what they want.

It’s a sturdy principle of business, one that most of us endorse. But it’s also a principle that can carry seeds of its own demise.

Leadership and management are not a popularity contest. While listening to your clients, peers, employees etc. is not only important it is a must, knowing when to ignore them or do something they can’t even think about is just as important. As I wrote a few months ago:

I don’t know about you, but if a few years ago somebody would have asked me what do I want my cell phone to do, there is no way I would have said: “Oh, you know what, I want it to react to movements when I move it around so I can play games with it”. I don’t know it for a fact, but I think the people at apple just put that quality into the Iphone without people telling them that is what they want. And that is a one great quality for a product. That is a way to make it a purple cow.

It works with customers just as well as it works with employees. In all fields of life, the work of great change makers was first criticized, misunderstood and fought against. “Why the hell do we need that?” the critics ask. But the change makers are the ones that make an impact on our lives. This is the difference between incremental innovation and radical innovation. One improves on what you have; the other changes the rules of the game. As Henry Ford famously said: “If I have asked people what they wanted, they would have said: ‘a faster horse’”. This is how Pink summarizes it:

Enhancing a category is cool; creating a category is cooler. Providing people what they want is a smart tactic; giving people something they didn’t know they’re missing is an even smarter strategy. Listening to the customer can be helpful; listening to your own voice can be revolutionary.

Every word here can be applied to customer service, development of new products and more importantly, management of people. Listening to them is good. But giving them what they want is not always best. Like giving employees answers – they would want it, but it is not good for them. And this reminded me of what I was trying to say about effectiveness and efficiency:

What the definitions don’t tell us is the focus. Efficiency is about marginal improvements. We take the current situation and try to make it better. To make the most of what we have. To do better with what we have. And that is a very useful skill. But it rarely leads to huge leaps. And it rarely breaks the boarders and provides levels of performance we haven’t thought possible. Effectiveness, on the other hand is about change. Is about finding a better fit to our goal. It is making something work better, not in the margins, but in the core of its being. It is about finding the right solutions to the right questions. If you make something more effective, you are changing the way it works, re-inventing it (maybe a bit more similar to term Efficacious). And you are focused on the long-term effects.

Everybody will tell you that you should listen to your customers. But everybody tells you to do that, everybody else is doing it too. Why don’t you try to listen to them, but not listen to them at the same time? Now that is something special.

Elad

Effectiveness vs. Efficiency

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Take a deep breath. I am back, with a long one!

A post I wrote a few weeks ago (“The efficient, but less effective, way”), and a comment by one of the readers (thanks Jono), started me on a long path of thinking about the issues of Effectiveness vs. efficiency.

Now I know that this debate is not a new one. Every decision is some kind of tradeoff between the two and people are totally aware of that. And then again, are they?

Like many things in life, to a certain extent, we can’t do both. We can focus on one and do it very well and do a little of the second one. In I think in the last century and especially in the last couple of decades, our society has focused more on of efficiency than on effectiveness. And one of the reasons for that is that we don’t fully appreciate the philosophical differences between the two. Look at these definitions from dictionary.com:

ef·fi·cien·cy –noun,plural-cies.

1. the state or quality of being efficient; competency in performance.
2. accomplishment of or ability to accomplish a job with a minimum expenditure of time and effort: The assembly line increased industry’s efficiency.
3. the ratio of the work done or energy developed by a machine, engine, etc., to the energy supplied to it, usually expressed as a percentage.

ef·fec·tive –adjective

1. adequate to accomplish a purpose; producing the intended or expected result: effective teaching methods; effective steps toward peace.
2. actually in operation or in force; functioning: The law becomes effective at midnight.
3. producing a deep or vivid impression; striking: an effective photograph.

What the definitions don’t tell us is the focus. Efficiency is about marginal improvements. We take the current situation and try to make it better. To make the most of what we have. To do better with what we have. And that is a very useful skill. But it rarely leads to huge leaps. And it rarely breaks the boarders and provides levels of performance we haven’t thought possible. Effectiveness, on the other hand is about change. Is about finding a better fit to our goal. It is making something work better, not in the margins, but in the core of its being. It is about finding the right solutions to the right questions. If you make something more effective, you are changing the way it works, re-inventing it (maybe a bit more similar to term Efficacious). And you are focused on the long-term effects.

Efficiency is a closed-world concept. You work with what you know and have and “minimize damages”. And as a closed-world concept, it has its disadvantages.  Justin Fox pointed out one of them on HBR.org:

At one level this is much more efficient than the old system. The spreads are smaller, so investors are getting a better deal, right? Well, not if the system also becomes much more fragile, and susceptible to sudden collapses. Over the past three decades our financial system has become vastly more complex in terms of technology and diversity of available financial products. By some measures it has become more efficient — trading commissions have certainly come down. But it has also become more prone to crisis and (maybe) collapse. Efficiency (and this is an argument borrowed from Taleb) breeds fragility.

And Tony Schwartz makes a related point on the same blog:

But is it good news? Is more, bigger, faster for longer necessarily better?

Americans already put in more hours than workers in any country in the world – and that doesn’t include the uncounted shadow work that technology makes possible after the regular workday ends.

Here’s the bigger point. Just as you’ll eventually go broke if you make constant withdrawals from your bank account without offsetting deposits, you will also ultimately burn yourself out if you spend too much energy too continuously at work without sufficient renewal.

Michael Watkins and Umair Haque both make similar points on the HBR.org blog.

Big, simplified example? The focus of the last few years was on more money. A lot of efficient ways to make more money. Were they effective? We all know that answer to that question.

Now, I am not saying that efficiency is a bad thing. That couldn’t be more wrong. Every young MBA student struggling with the concepts of strategy will tell you that you have to keep cutting costs, systematically, never-endingly. You have to improve your business and do it in the best way you can. Otherwise the competition will. I am just saying the emphasis is wrong. Because if you can’t do both all the time at a high level, you must have priorities. And while focusing you priorities on efficiency leads to all the aforementioned problems, focusing on effectiveness, while it is harder, is the real promise of the future.

By now you must be wondering how all of this is related to the subject of this blog. I talk about management of people and how to foster relationships, reduce rules and create an environment of autonomy, mastery and purpose. There is no doubt that all of these practices are effective. You don’t have to trust me about it. There are years of research to prove these things. The problem with these things is that if you look at them from the efficiency point of you, they seem inefficient. “What, I have to sit with my employee for an hour and a half and talk to him? Who has the time???” These are complaints I hear from people when I discuss some of these issues with them. “In the fast paced reality, there in not enough time to practice all these ’soft skills’ best practices”, people tell me. And apparently, I am not the only contemplating about these issues. Look at what Bob Sutton writes in his blog:

…the difference between good and bad bosses, it made me realize that — although good bosses are concerned about using their time well, and especially, making sure not to waste their people’s time — that they tend to think and act as if it is more important to do things as well as possible than to do things as quickly as possible.  Indeed, some of the work bosses I can think of always seemed to be focused on finishing whatever they are doing at the moment so they can get on to the next thing.  The result, unfortunately, is that they spend their days rushing around, doing one thing after another badly.

And I saw similar things said in Susan Scott’s book, Fierce Leadership: A Bold Alternative to the Worst:

Physicians who don’t get sued take a little more time – three minutes more than physicians who do get sued. And it was the quality of the physician-patient conversation, how the doctor talked with their patients – notice with, not to their patients – that made the difference. Patients like doctors who really listen, draw their patients out (tell me more about that), and answer their questions fully. Those three extra minutes and how they were used were the differentiator. In the blink of three minutes the patient felt seen, heard, understood, valued, and respected. You don’t get that in every doctor’s office. Or in every executive’s office.

Yes. These doctors are not as efficient (they will see fewer patients per day) but they are much more effective. Sometimes we need to slow down to speed up.

What is your bias? When the priorities are on the table, which one do you consistently prefer – efficiency or effectiveness?

Elad

The efficient, but less effective, way

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“… [B]usiness students are trained to find the single right plan, right. And then they execute on it. And then what happens is, when they put the marshmallow on the top, they run out of time, and what happens? It’s a crisis. Sound familiar? Right. What kindergarteners do differently, is that they start with the marshmallow, and they build prototypes, successive prototypes, always keeping the marshmallow on top, so they have multiple times to fix ill built prototypes along the way. So designers recognize this type of collaboration as the essence of the iterative process. And with each version, kids get instant feedback about what works and what doesn’t work.

This amazing short TED talk and the above quoted part got me thinking about a term I came across in the beginning of my MBA training and recently came across again while reading Leading Teams: Setting the Stage for Great Performances. Equifinality:

Equifinality is the principle that in open systems a given end state can be reached by many potential means.

We are sometime so consumed with the chase after efficiency that we forget two things:

1. There is rarely one “right” way to succeed at anything.

2. Redundancy, multiplicity and wealth of options sometime lead to better outcomes in terms of effectiveness, even though they might seem be less efficient.

A few months ago I wrote this about a different TED talk:

As managers we need to remember that each employee has a world of his own. We need to remember that his world is different than ours and different than “the world” we are trying to create. And that is not necessarily a bad thing. Different does not mean wrong. The challenge is to acknowledge the differences and find similarities and connections between the worlds in order align them.

There is a lot of talk about the power of diversity. But diversity is not only in culture, gender, race, age and other demographic qualities. It is also, maybe even more importantly, about abundance of ideas. If different does not mean wrong, then it must have some kind of right component in it. Synergy, by definition, is better than the sum of its parts. But if you only think in one “right” way, there is no way to reach synergy, as it only comes from combination of different ideas.

In a world where efficiency is a standard and where effectiveness will become more and more the differentiator, it is time to start and think in terms Equifinality.

So, do you have one right way?

Elad

Unlearning from Frederick Winslow Taylor

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In my presentation “No More Rules!” – which earned me a few heartwarming reviews up till now (Still waiting for yours!) – I claim that the use of too many rules in management today is harmful in many ways and that we need to revamp our thinking about their use and efficiency because in aggregation they might create more harm than good.

One issues I talk briefly about in the presentation is the fact that the basic assumptions about the use of rules comes from the thinking of Frederick Winslow Taylor whose work and book The Principles of Scientific Management revolutionized American industry leading it to new levels of efficiency and productivity. In the last few days, while reading 12: The Elements of Great Managing by Rodd Wagner and James Harter, I found two very interesting references to the Taylor’s work that amplify the normative argument I try to make in the presentation.

The first is a direct quote from Taylor’s The Principles of Scientific Management:

The development of a science (of managing tasks) involves the establishment of many rules, laws and formulae which replace the judgment of the individual workman and which can be effectively used only after having been systemically recorded, indexed, etc.”.

The second quote is from Taylor biographer Robert Kanigel who wrote in the book The One Best Way: Frederick Winslow Taylor and the Enigma of Efficiency (Sloan Technology):

Scientific management was degrading. In reducing work to instructions and rules, it took away your knowledge and skill. In standing over you with a stopwatch, peering at you, measuring you, rating you, it treated you like a side of beef. You weren’t supposed to think. Whatever workmanly pride you might once have possessed must be sacrificed on the altar of efficiency, your role only to execute the will of other men paid to think for you. You were a drone, fit only for taking orders. Scientific management, then, worked people with scant regard not only for the limitations of their bodies but for the capacity of their minds.

I don’t know about you, but the fact that this kind of approach is at the base of many of the achievements of the 20^th century makes me feel a little bit ashamed. Notwithstanding the fact that today’s competitive advantage does not stem anymore from productivity and efficiency (which can be replicated easily) but from innovative thinking, Art and practical wisdom, this kind of approach seems inhuman and unsustainable. And still, in the number of times I encountered Taylor in my academic education, his approach was treated with respect and as a basis for modern thinking.

History is filled with individuals that, sometimes for noble reasons, led different disciplines in the wrong way. I do not think Taylor was a bad man. He probably believed he was working for the general good. However, the long-term damage his thinking produced is felt today and probably will be felt in the future. His assumptions are so intertwined into our thinking that it is hard to identify their exact influence. It is time to let go of our Tayloristic heritage and start celebrating the capacity of human minds. History will judge us on how well we learned from Taylor’s mistakes and how fierce we were in our approach to change it.

The change begins with you. What are you doing for it?

Elad

My day at the bank (or, how will the future be more productive)

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My day at the bank (or, how will the future be more productive)

I was at the bank today in order to set up another account that will allow me to get some interest on my money. For some reason, I could see the bank clerk computer screen and I was watching her use of the computer.

I don’t know about you, but as someone who grew up with computer since he was ten, I feel very comfortable around computers. But this clerk wasn’t. And for someone like me, it was easy to see that. It is not that she did not get the job done; it was that she was doing it very inefficiently. She was using the mouse courser for things she could do with the keyboard, she used slow ways to move around text boxes, she deleted entire textboxes that she needed to fix instead of just correcting the word, etc. when the computer did not agree to accept my address because it had more that 30 characters, it took her a few minutes to get over that.

What she did in five minutes I could do in two. Not because I am smarter but because computers are a second nature for me.

That got me thinking. There are so many people today in service industries that computers are not a second nature for them. Think about that bank clerk. Show must have been working for the bank for 20 years, using paper and really old interfaces. She probably does not use a lot of computers on her day to day life. More importantly, she probably did not grow around computers. No matter how much training she will get, she will never be very efficient around a computer.

But that is changing. As computers get more common and kids are growing up using them, more and more people will feel natural around computers. And that means a boost of efficiency. Multiply the 3 minutes the bank clerk could have saved today by millions, and you get a pretty clear picture. Even if the current technology will stay the same, efficiency is going to improve, just because the people are going to get more natural at using it.

Elad