Process and attitude or results and luck?

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Mihaly Csikszentmihalyi writes in Good Business: Leadership, Flow, and the Making of Meaning:

An organization where only success counts, and one in which an employee who does all the right things and fails is evaluated by the same measure as one who fails because of ineptitude, is an organization that is not likely to generate a great deal of loyalty. It is a part of management function to recognize and reward the performance and the attitude of employees, and not just their success, which may be due to entirely to fortuitous circumstances.

And it is not only a matter of loyalty, but of long-term success. Yes, results matter. Without results nobody will be able to succeed, long-term or short-term. But focusing too much on the “bottom line” results might be detrimental. Not only is luck involved many times, it is also a recipe for repeating mistakes. And most of all, it disregards the human element. If you ignore what people feel and think you will lose them on the way. And without the people, where will you be. And as Csikszentmihalyi points out, you owe your employees to keep those who really give all they can and have the potential (does all the right things) from those who are just not right for the job (ineptitude).

So – when you evaluate people do you focus only on results (and luck) or do you also focus on the process and attitude?

Elad

Shorts: Michael Crouch on doing the easy thing

You should read this interesting interview with Michael Crouch for many reasons. One sentence caught my eye:

Some thought we should be selling what everybody else sold because that was much easier to sell

And I ask you – are you selling what everybody else is selling because it is easier? Are you doing what everybody else is doing because it is easier? Are you not standing out and not being remarkable just because it is easier?

If it is easy, there is a good chance it is not worth doing.

Elad

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Awareness (2)

Yesterday I wrote about awareness and how it is important for managers to be aware of their surroundings in order to to reach a human connection. Then I encountered the next two quotes:

Whoever knows essentially his own nature, can know also that of other men and can penetrate into the nature of beings. He can collaborate in the transformation and the progress of Heaven and earth (Confucian teaching).

How can the soul, which misunderstands itself, have a sure idea of other creatures? (Seneca).

Exactly what I said. Just shorter and more to the point.

Elad

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Awareness

Photo by Metro Centric

In the last few weeks I have been taking classes in positive psychology and practical philosophy. Both disciplines have a lot in common but the main thing is the idea of awareness and noticing out surroundings. The basic idea is kind of ironic. Only by truly being aware of the now and truly feeling it, you can achieve long-term goals of a sustainable happier life.

If you watch the amazing clip above, you will learn many things about human behavior. One of the most interesting pieces of information in it is that while American people complain that they don’t have enough time for themselves, for their families and their friends because there are swamped at worked, when asked what they will do with an extra day a week, they answer – will work more. Talking about being aware and not noticing what we are doing to ourselves.

When you think about, this tension, between long-term goals and short-term, almost hedonic, needs is a tension that is found in all facets of business and management life. How often do you stop to reflect and ask yourself – what am I doing right? What am I doing wrong? How can I make sure I recharge myself so I can keep up this crazy race in the long run? I am sure the answer is – not much. Life is to hectic, work to demanding, costumers want things yesterday.

Now think about your employees, peers, teammates? When is the last time you stopped and noticed them? Spent some time really getting to know them? Thought about their lives and what drives them? Thought about how to make their lives easier so they can survive the long run? Besides the fact that socializing and informal communication was found to be an important antecedent of creativity, innovation and team effectiveness, there are much simpler reason to be aware of your employees.

Grant McCracken asked, on HBR.org, a few days ago: Do You Know What Your Employees Are Watching? While McCracken suggested that we can learn about trends in the economy from employees TV habits, I think the question is important on a much more individual and personal levels. Are you aware that your employee loves to watch that dance show, because he always dreamt of being a dancer or even taking a dancing course? What will happen if instead of giving him a standardized bonus next time, you would be able to buy him a dance class for the same amount of money? What if you suddenly notice that all your employees are into Glee… will that enable you to create a contest between teams in your department that will boost morale?

Opportunities to make a difference are out there all the time. the question is, are you aware enough to notice them and utilize them for long-term benefits.

Elad

Correction: In the post I talk about a clip, which I forgot to include. Here it is:

Patience

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I was watching an amazing talk by Dan Myer on how to give math classes a makeover. Watch it! It’s worth your ten minutes. I won’t ruin it for you. However, I liked one of the main starting points for his talk. Here it is:

David Milch, creator of “Deadwood” and other amazing TV shows, has a really good description for this. He swore off creating contemporary drama, shows set in the present day, because he saw that when people fill mind with four hours a day of, for example, “Two and a Half Men,” no disrespect,  it shapes the neural pathways, he said, in such a way that they expect simple problems. He called it, “an impatience with irresolution.” You’re impatient with things that don’t resolve quickly. You expect sitcom-sized problems that wrap up in 22 minutes, three commercial breaks and a laugh track. And I’ll put it to all of you, what you already know, that no problem worth solving is that simple. I am very concerned about this, because I’m going to retire in a world that my students will run. I’m doing bad things to my own future and well-being when I teach this way. I’m here to tell you that the way our textbooks, particularly, mass-adopted textbooks, teach math reasoning and patient problem solving, it’s functionally equivalent to turning on “Two and a Half Men” and calling it a day.

I feel this on myself. When is the last time you looked at something new and asked yourself – how does it work? And sat to think about it and find out by trial and error. Kids start out being really curious. A small child really wonders how things work and sets out to try to understand things, usually by trail and error. Along the way, we lose that. Seth Godin wrote:

We often forget to teach kids to be curious. A student who has no perceived math ability, or illegible handwriting or the inability to sit still for five minutes gets immediate and escalating attention. The student with no curiosity, on the other hand, is no problem at all. Lumps are easily managed.

Same thing is true for most of the people we hire. We’d like them to follow instructions, not ask questions, not question the status quo.

Godin and Myer talk about the same thing. And I think that our “impatience with irresolution” is not only an issue in studying math problems. It represents a problem in our business world and a problem with how we manage people and relationships. As I have written before a couple of times, people think in events and not in processes. We sometimes neglect to see the long-term effects of how something happening right now can affect the future. It is another facet of short-term thinking.

So, managers don’t invest in the little things, don’t resist the temptation to give answers , strive for efficiency instead of effectiveness and use too many rules that don’t require our employees to develop and use judgment.

We need to re-integrate patience into our lives. As Myer says, it starts with the way we educate our children. But it continues with the way we manage our businesses.

Elad

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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

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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

Lessons learned through a discussion of the Amazon-Zappos deal

Last week as we heard the news of the Amazon-Zappos deal an on-line discussion started between a few of my fellow students at the AGSM MBA. We discussed whether it was a good idea, what will the effect of it on the culture of the two companies, etc.

Amazon has always been a company I admired (and had some very good customer service experience with), so I was glad that as part of the discussion and even more glad to come by this movie clip of Amazon CEO and founder (Thanks Amit). You never know how much of what the CEO is actually saying is happening in real life. But, there is no doubt that Amazon is a success story. And I think that the principals they stand for and Jeff Bezos is presenting in the video are very similar to things I write about a lot in this blog.

Obsess over customers (not over competitors) – I love this approach. First, because it takes the company out of the regular We (or I) culture. As humans we attribute to much importance to ourselves in the mind of others. And this translates to companies’ strategies and tactics that focus on the company and not on the customer. Nobody really cares about company X. People care about themselves. But the second part of this concept is even more important. We spend so much of our lives comparing ourselves to others, using benchmarks, thinking – I want to be like him/her. We forget to be ourselves. We forget to excel at what we do. We forget to exploit our comparative advantage. Instead of focusing on them, we should focus on us. And I know what you are thinking. Isn’t that a contradiction? You just said that we should stop with the culture of we. Well it isn’t. They can co-exist. And anyway, F. Scott Fitzgerald famously said that “the true test of a first-rate mind is the ability to hold two contradictory ideas at the same time”.

Invent – There is no doubt in my mind that the need (and ability) to invent is and will be the hallmark of successful people and companies in our changing world. Not only invention of new products but also of process, of business models, of ideas and of sharing mechanisms. A company that puts invention as its core belief represent, in my mind, a great manifestation of everything that is good in the capitalistic system.

Think long term for customers not according to customers – Again, two very strong ideas. Long term. The financial crisis has proved, if any more proof was needed, how important the idea of long term thinking is. Again, it is a manifestation of a very basic human trait that is discussed a lot these days. The need for immediate gratification. I hear about the Gen Y phenomena and the fact that people today are looking for immediate gratification and I involuntary cringe. This is not something we should celebrate. This something we should avoid. I think mentioning the famous marshmallow experiment is enough to make my point. Patience and perseverance, in the business world are essential. The second part of this concept is about customers and that they don’t always know what they want. Listen to your customers, but don’t be entrapped by them.

And not less important: “it’s always day one”. There is always more to learn, discuss, improve and question.

Elad

Live long and prosper in horse manure

150668050_0a55ed8b3aPhoto by Rikki_

My friend Jonathan sent me a link to an article writing in the subject of the email: “long, physiologic and fascinating”.  The article, from “The Atlantic Online”, bears the very promising headline: “What makes us happy?“. Although I don’t think it actually answers this question, it sure does give you a very interesting journey of trying to understand it.

In a nut shell, the article describes the writer impressions from spending one month in the file room of the Harvard Study of Adult Development, one of the longest running – and probably the most exhaustive – longitudinal studies of mental and physical well-being in history. It begun in 1937 as a study of healthy, well adjusted Harvard sophomores (all males) and it has followed these subjects for more than 70 years. I will leave the work of reading the article and answering the question “what makes us happy?” to you, but I do want to quote and comment shortly on two quotes I liked in particular.

The first quote is a very short story the manager of the research, Dr. George Vaillant, gives as an answer to one of the questions:

… [T]he story of a father who on Christmas Eve puts into one son’s stocking a fine gold watch, and into another son, a pile of horse manure. The next morning, the first boy comes to his father and says glumly, “Dad, I just don’t know what I’ll do with this watch. It’s do fragile, it could break.” The other boy runs to him and says, “Daddy! Daddy! Santa left me a pony, if only I can just find it!”

We always hear the importance of looking on the part of the glass that is half full, and not the one that is half empty (link in Hebrew). As I mention in my e-book, In Randy Pausch ‘s last lecture he said: “We cannot change the cards we are dealt, just how we play the hand“. When is the last time you woke up to see horse manure on your table and thought to yourself – this is an opportunity. They say that times of depression are times when people get rich. It is the people who can see the opportunity in the horse manure. The following thought is self evident. When you are assembling your team – are you looking for people who opportunities in horse manure?

This is the second quote:

In fact, Vaillant went on, positive emotions make us more vulnerable than negative ones. One reason is that they’re future-oriented. Fear and sadness have immediate payoffs – protecting us from attack or attracting resources at times of distress. Gratitude and joy, over time, will yield better health and deeper connections – but in the short term actually put us at risk. That’s because, while negative emotions tend to be insulating, positive emotions expose us to the common elements of rejection and heartbreak

I talk a lot about short-term versus long-term thinking in this blog. And about the fact that short-term thinking is to be blamed for a lot of the problems this world is facing.  Actually, my last post was about this subject. I also mentioned, a couple of times, that I believe the most important challenge of a leader is the dissipate people fear’s about the future. This outlook on the subject, gives another explanation, why long term view is so important and why it is so hard to reach. This also explains why the talent of leadership is so important and why we need to create processes that help us overcome out behavioural tendencies 

Elad

What can learn from the marshmallow?

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photo by bill barber (very sporadic)

I have been watching this fascinating six minute lecture by Joachim De Posada from TED. In it, he describes the famous experiment with kids and marshmallows. They took a group of four year old kids and gave them a marshmallow. Then, they told them that if they will wait for 15 minutes without eating the marshmallow, they will get an extra marshmallow. About two thirds of the children ate the marshmallow right away.

15 years later those same kids, now adults, were invited again. This time the researchers surveyed their status in life. It turned out that the kids who did not eat the marshmallow right away were all very successful, had great grades and were doing very good socially. The kids who ate the marshmallow right away, were generally doing much worse, many of them, dropped out of school.

I heard about this experiment a number of times and I find it fascinating, but, I am not sure what the immediate implications of it are. If I am a parent you young children, what should I do to make sure that my child is in the group that waits?

But in this talk, De Posada explains, that this ability to postpone gratification, is predictive of success, because many times in life, if you wait, your success is bigger. He gives the example of a salesman not going for the quick deal, but sitting diligently with the clients to find out their real needs, thus making a more profound and sustainable sale.

I think there is a great lesson here. In a world ruined with havoc because of short term goals and gains the inclination to wait, to think things through, to try one more check, is increasingly important. And it is growing in importance even more, as are world is getting faster and faster. We hear a lot about flexibility of firms, their ability to respond quickly to the markets and the importance of constant change management. I am not saying all of that is wrong. But I am advocating, at least as part of some process, to be more patient. To learn to postpone our immediate gratification.

The problem is that it is extremely hard. Most people have a lot of trouble dealing with the unknown future and taking risk is part of the game. But there is a difference between taking a calculated risk and just taking a risk. So, how can me incorporate flexibility and risk taking and still think things through.

As usual, I think the answer lies in creating a better process, which will enable quick decisions within a more general framework, which keeps some kind of boundaries and keeps evaluating and re-evaluating decisions. This is, off course, easier said than done. I have a thought. Maybe, firms fail because they try to be both risky and prudent? What if we would allow our employees to be risky and flexible, but will create a better debriefing process. Create a process that checks every decision with milestones, ignoring sunk costs. Maybe, because we know the problems, the solution should be different?

Elad