Naturally Innovative

“But if you will it, it is not fantasy” – Theodor Herzl

Recently, virtually every organization that I speak with has put innovation front and center as a necessary, in fact imperative characteristic of their organizational cultures. The thinking is clear. In order to thrive in turbulent environments organizations must innovate, must examine the way they do business, update their products and services, and must differentiate themselves in order to outperform the competition. Competition, environmental stress and the need to survive as an organization spur on innovation.

Innovation is often described as coming in bursts, but much more common is the rolling-up-the-sleeves, hard work, incremental innovation, building on other’s breakthroughs, often in a collaborative fashion, that over the long run can radically change the way things work and the products that an organization offers.

It could easily be argued that innovation occurs naturally among all of the earth’s creatures. Species innovate constantly and naturally in the never ending battle to survive. One species of cuckoo finch has eggs that mimic the coloration of another species so that when the finch deposits their eggs into the other species’ nest, the hatched baby birds are raised by the tricked surrogate parents. As a defense the second species, the tawny-flanked prinias evolved more colorful eggs that looked different form the finch’s eggs but the finches responded by evolving and again mimicking the more colorful eggs. Evolution is innovative.

The mitochondria that inhabit our cells and produce the energy which powers cells originated externally from the cells they now inhabit. They have their own DNA and can reproduce only from their own DNA, indicating that they were a separate life form somewhat like bacteria. Prior to their role in our cells they existed independently. Mitochondria entered into a symbiotic relationship with cells and then that combined organism evolved into the variety of cells that make up human beings. Today we would not be able to survive without these creatures living within our cells and the mitochondria would not exist without us. Evolutionary innovation is often collaborative.

Beyond evolving on a biological front, humans evolve and innovate their behaviors constantly if not quickly, with our ancestors developing new forms of stone tools over millennia, fire being tamed, the taking up of living in shelters of one sort or another, and placing metal strips on the teeth of our children to improve function and appearance.

Many of the inventions that propelled our civilization and were described as deriving from “ah-ha” moments were nothing of the sort. Rather the innovative breakthrough came from groundwork that laid the foundation and was then built upon. Basic innovations often sit dormant until additional development work and insights are gained allowing the innovation to be applied in day-to-day life.

Take Edison’s light bulb for instance. It is often credited to Edison as a singular event. And in fact Edison played a very important role in the light bulb, but without the innovations of those who came both before and after him the light bulb would not have become as wide spread as it has. Here is a chronology of the major milestones.

• The first electric light was made in 1800 by Humphry Davy. When he connected wires to his newly invented battery and a piece of carbon, the carbon glowed, producing light.
• Much later, in 1860, physicist Sir Joseph Wilson Swan was determined to devise a practical, long-lasting electric light. He found that a carbon paper filament worked well, but burned up quickly. In 1878, he demonstrated his new electric lamps in Newcastle, England.
• In 1877, Charles Francis Brush manufactured some carbon arcs to light a public square in Cleveland, Ohio, USA. These arcs were used on a few streets, in a few large office buildings, and even some stores. Electric lights were only used by a few people.
• Thomas Alva Edison experimented with thousands of different filaments to find just the right materials to glow well and be long-lasting. In 1879, Edison discovered that a carbon filament in an oxygen-free bulb glowed but did not burn up for 40 hours. Edison eventually produced a bulb that could glow for over 1500 hours.
• Lewis Howard Latimer improved the bulb by inventing a carbon filament (patented in 1881); Latimer was a member of Edison’s research team, which was called “Edison’s Pioneers.” In 1882, Latimer developed and patented a method of manufacturing his carbon filaments.
• In 1903, Willis R. Whitney invented a treatment for the filament so that it wouldn’t darken the inside of the bulb as it glowed.
• In 1910, William David Coolidge (1873-1975) invented a tungsten filament which lasted even longer than the older filaments. The incandescent bulb revolutionized the world. (Enchanted Learning).

Rather than being the exception the “evolution” of the light bulb is very often how innovation occurs with multiple people contributing, often working collaboratively over a period of time.

There are multiple methods available for measuring the existence of innovation in organizations. You could count the number of patents issued to the organization, or the age of each of its product’s since design, the amount of time that employees spend on innovation, the R&D budget, the headcount assigned to “innovation”, or the perceptions of the customers towards the organization’s products and services as being innovative. One method for measuring the degree of innovation in organizations is through the perceptions of the employees.

Employee surveys will often ask about the “emphasis” on innovation within the organization, but I prefer asking about whether innovation is actually occurring. Critical when measuring innovation through employee surveys is to ask about:
• the generation of innovative ideas;
• the ability to test out those ideas from a funding and other resources standpoint;
• the ability to evaluate innovations to see which one’s should be implemented organization-wide and which ones rejected.

Examining or asking about the reward system is also often very informative as an organization may truly desire to be innovative, but is actually rewarding its employees for playing it safe and not trying new things rather than the innovative efforts desired.

Slack and redundancy are two concepts that are also critical to be in place for an organization to successfully innovate. If an organization is being run in such a tight fashion with no slack so that it can’t try new things, because all resources are dedicated to getting the work done the traditional way, the ability to be innovative does not exist. And likewise if the organization does not have the ability to experiment with new methods, while another redundant process is performing in a traditional fashion, the evaluation of innovative ideas and processes will be very difficult to objectively assess.

Organizational innovation is critical and creating organizational cultures that support innovation rather than suppress it is within reach for all organizations.

______________________________________________________________________
© 2012 by Jeffrey M. Saltzman. All rights reserved.
Visit http://www.orgvitality.com

First, Do No Harm

[tweetmeme source=”jeffreysaltzman”]

The notion of “first, do no harm” arises from the world of medicine. While that exact phraseology is not part of the Hippocratic Oath the intent is certainly there.  From the original oath, “I will prescribe regimens for the good of my patients according to my ability and my judgment and never do harm to anyone.”  Late in the 1800’s medical professors began to use the phrase in writings and in their lectures to students. The notion was further refined to have health care providers “consider the possible harm that any intervention might do…and recognition that human acts with good intentions may have unwanted consequences.”

As an example of good intentions having unintended consequences, it has been reported that Libyan rebels who where supported first by the United States air bombing campaign, and then NATO, overran weapons depots of the Kaddafi government, selling the mustard and nerve gas shells they obtained from those depots to the terrorist organizations Hezbollah and Hamas, through Iranian channels and funding.  As the materiel was being transported through Sudan’s well known arms smuggling routes on its way to the Gaza Strip, the individuals responsible for the arms transfer mysteriously had their car hit by  a missile.  The good intentions of supporting the overthrow of a dictator, resulting in the unintended consequences of putting extremely lethal mustard and nerve gas into the hands of those who would not hesitate to use them on civilian population centers. Protecting civilian population centers as an ethical standard seems to apply to the Libyan rebels only when those population centers are theirs.

First, do no harm, and its implication of perfect knowledge, when taken to the extreme of unintended cause and effect has the potential of resulting in greater harm through paralysis and inaction. What are the longer term consequences, if for instance I was running a company that had expenses that were greater than income, and I chose to do nothing about it? I freeze because the consequences of the potential actions (e.g. forcing early retirements, layoffs, freezing or reducing salaries, forced part-time, cutting benefits, eliminating expenses) will result in harm to a subset of individuals, the harm however, will be greater in terms of the number of people affected when the company subsequently fails.

What if a rapidly spreading disease kills 50% of those afflicted, and I choose not to distribute a vaccine that will save the lives of 50 out of 100 afflicted people, but will result in the deaths due to allergic reactions of 5% who otherwise might survive, am I guilty of greater or lesser harm? By distributing the vaccine I can save a substantial number of lives, but by acting I will knowingly kill people, but not as many as would otherwise perish. Most choices are not easy and often have unintended consequences. But what about when people act, not taking the unintended into account at all?

Contrasting the role of behavioral expectations in the roles of medicine vs. business, Jonathan Baron of the University of Pennsylvania writes, “the positive obligations that stem from ethical codes are almost always contingent on voluntary promises and agreements. Likewise in business, almost all positive obligations arise from contracts, even if the contracts are only implicit.” His point of view would conclude that the obligations that arise from an ethical moral code are voluntary, while those that arise from business are legislated through a contract. Therefore, using this logic, obligations that arise in business cannot be assumed to be executed in an ethical manner unless they are contractual and/or by extension regulatory.

The number of and types of scandals that have been evident in American business recently seems to support this notion. In the Forbes Corporate Scandal Sheet they actually state that “ we’ll follow accounting imbroglios only–avoiding insider-trading allegations like those plaguing ImClone, since chronicling every corporate transgression would be impractical–and our timeline starts with the Enron debacle.” It then goes on to list scandals that hit 21 major companies from 2002 alone. It is easy to be cynical about ethics in corporate America when you could pick up the Wall Street Journal from virtually any day and read about some ethical scandal or another.

What are the obligations of those working for or supporting organizations that are involved in unethical or immoral practices? Should workers follow some sort of code of conduct, an oath to uphold business ethics that they take upon being hired by a company? And maybe once a year they renew their vows? Should workers be able to point to an outside moral code of conduct when an organizational leader asks them to do something that crosses the line? How could a company object?

In one study Dan Ariely, MIT professor and author of Predictably Irrational found lower levels of cheating on a test when the participants were reminded of a moral code just prior to the test.  Organizations cannot actually be unethical or immoral, only people can. People are the only ones who can behave ethically or unethically and it is people who direct organizations. That is why organizations are very rarely charged with a crime, but people within organizations can be. Organizations tend to be charged only when the illegal behavior has been systematized across the institution.

The challenge will be in the definition of ethics itself. And with some of the miscommunication/varying definitions that stem from incongruous meanings of the term ethics, depending on where you sit in the organization. For a typical worker, ethics often revolves around relationships, trust, being true to your  word. If the management of an organization changes the workers benefits, work schedules, overtime requirements, staffing or workloads, the management runs the risk of being seen as in violation of voluntary promises and agreements which can be deemed as unethical. Meanwhile those in management can look at those same changes and deem them as lawful and not in violation of any contract and therefore see no ethical issue. Managements see ethics as  related more to following the legal letter of the law and based on this standard of ethics, if there is a legal way to break a contract that would be ethical  ehavior, as would be a legal way to reduce headcount etc.  Ethics is a word that holds somewhat different definitions depending on whom you are asking to define it.

But if we as a nation can derive a universal standard of business conduct, say the 15 Commandments of Business Ethics, no lets shorten it to 10 (thank you Mel Brooks), and have every worker (management as well as non-management) subscribe to those standards we may make a positive impact on what we  view as ethical behavior.

_________________________________________________________

Ariely, D. (2009) Our Buggy Moral Code, TED Talks, http://www.ted.com/talks/dan_ariely_on_our_buggy_moral_code.html

Baron, J. (1996). Do no harm. In D.M.. Messick & A.E. Tenbrunsel, Codes of conduct: Behavioral research into business ethics. pp.  197-213. New York: Russell Sage Foundation.

Debka, (04/07/2011) Special operations team hit top Iranian-Hamas arms smugglers in Sudan, http://www.debka.com/article/20821/

Forbes.com, The Corporate Scandal Sheet, (08/06/2002) http://www.forbes.com/2002/07/25/accountingtracker.html

Hippocratic Oath (4/17/2011) http://en.wikipedia.org/wiki/Hippocratic_Oath.

Jolton, J. & Saltzman, J. 2008, Preventative Maintenance: How Industrial/Organizational Psychologists Can Build and Maintain  an Ethical Culture, SIOP annual convention.

© 2011 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

Earth, round or flat?

The Earth used to be round.

The group that first proposed that the Earth was round is thought to be the Greeks. Although a little bit of researching turns up some potentially conflicting claims, credit is typically given to Pythagoras (of theorem fame). Some say Aristotle first thought up the idea. Either way the notion that the Earth is round has been around a relatively long time.   

The Earth is now thought to be flat.

Thomas Friedman suggests that the Greeks were wrong, at least from a current economic perspective. His book “The World is Flat” examines the consequences of the dot com bust that occurred in 2001 and the “flattening” of the world in subsequent years. This is one of the scariest books I have recently read (at least from an American or European perspective).

The dot com euphoria that captured the hearts of the world’s stock markets fueled an “easy cash” machine for the high tech companies. Anybody building things internet or computer related were showered with cash, including telecommunications companies.  Telecommunications companies spent billions and laid fiber optic cable around the world in anticipation of greatly increased utilization of telecommunication services driven by data and internet demands. Manufacturers of fiber optic cable couldn’t keep up with the demand. Then came the bust. Many technology companies went out of business, entered bankruptcy, selling assets for pennies on the dollar or simply struggled to survive in greatly diminished form.

All of this extra capacity for data transmission began to drive down the price of using the internet and related technologies for businesses and consumers. This price reduction and capacity has changed the world and brought about far reaching sociological changes.  Places like China and India are no longer simply low wage manufacturing centers but are becoming knowledge centers that can instantaneously communicate with the far reaches of the world. Today businesses are taking advantage of the “flattening” by outsourcing, off-shoring, joint ventures, etc.

Why is this scary to an American or European?

As the world becomes flatter and flatter the competition for jobs, of almost any kind, is no longer simply with others in your locale. The competition for jobs becomes world-wide and with the wage disparity that exists and the tremendous population resources, it becomes increasingly attractive for American and European companies to place those jobs not in America or the UK for instance, but in lower wage areas like China and India. Some companies handle this as a lower cost expansion and growth opportunity and others cut jobs in one place in order to move them to another.  In either case companies feel compelled to take advantage of these opportunities because of the global nature of the competition they are now facing. If they don’t continually drive down the cost of their goods or services, while maintaining quality, someone else will, taking away their customers (who feel the same pressure) and eventually driving them out of business.  

Is there any light at the end of this competitive tunnel?

There has been much talk and continues to be much talk about the differences in people by generation, by country of origin, by ethnicity etc. Much of those differences, when it comes to people at work are the results of either unchallenged folk wisdom (e.g. you just can’t trust this younger generation, I remember when I was their age…), contrivances of some of the lay press looking for interesting stories, eager consultants looking to sell prepackaged solutions as well as management teams looking for reasons as to why their policies and practices are failing or at least not working up to their expectations.

The workers of today in China, those who are currently working in sweat shop like conditions, are driven by economic necessity rather than any kind of difference in what they are hoping for out of a career or the work environment. They have the same desires, the same hopes and dreams as you or I. The same hopes and dreams that our grandparents had and our children have. Some of us have the very fortunate luck of being born in countries with fairly high economic standards that allows for us some additional freedom of choice; most of the people in the world today do not get that luxury.   

The wave after wave of immigration that built and is largely responsible for the entrepreneurial and innovative spirit that drove the US economy to its current heights was not accomplished by people who simply felt like uprooting their families, leaving behind the familiar and sometimes living apart for long periods of time. It was accomplish by people who out of economic necessity were willing to put up with conditions of uncertainty, hardship and worse. It was accomplish, by and large, by people looking for a better life, an escape from the harsh conditions of where they were from. (There were of course millions who were brought to American shores against their will as slaves).

Recently I examined the attitudes of employees of a company who had located some of their back office operations in India. They wanted to know why turnover among this population was high, what this group wanted, and what would keep them engaged in their work? The answer ended up being that given the relatively recent “start-up” nature of this group, the employees had concerns that any employee group anywhere on the planet would have. Where is the company going? How do I fit into that? How committed is the company to our group? What can my career here be like? How will I be developed? The company of course was putting into place all the business processes and procedures for the “business operation” to be successful and given the huge amount of work that represented, the impression one was left with was that they had not put the same amount of emphasis into the human side of the equation, taking into consideration what people would want out of the working environment.  The unstated assumption being made by that company was, “After all we were in India, and shouldn’t they be happy just to have a job?”  

What becomes clear if you look at organizational culture data long enough is that People are People and given the same choices, the same opportunities, will have the same desires and behave in a similar fashion (I am excluding people with various forms of pathology). They will vote with their feet if they find themselves in a situation they do not like and they have other opportunities available to them. People want to have a clear understanding of what is expected of them, what the organization stands for, they want to be enabled to perform their jobs, given the resources they need in the broadest sense, and they want to feel like there is a future for them on  a personal level if they stick around with the organization.

The notion that People are People is the light at the end of the tunnel. As economic conditions around the world equalize, as people in developing countries have more choices and more opportunities open to them, they will make the same choices based on the same thought patterns that someone in New York, Frankfurt, London or Los Angeles would make.  What we want to accomplish, in a post-flattened world is to bring the level of  opportunities available to people up to those that currently exists in places like America, rather then a lowering of the standard within America in order to be able to compete. This equalization, the eventual end-state of globalization, is how America and other western nations will be competitive. This equalization of standards is very likely a long way off, but on the other hand the world is changing very rapidly.

Longing to put the genie back in the bottle, to make things go back to the way they were before the world became flat is not the answer, both from a practical standpoint and a moral standpoint. From a practical standpoint the genie never gets back in to the bottle once it is out and there is no moral high ground is holding back people in the developing world from achieving their potential and to have a life equal to one that you or I enjoy.  As humans we need to be challenged to live up to our potential. Organizations as well can be challenged to live up to their potential – total potential, not just financial potential, as I firmly believe that organizations have a social responsibility as well as a responsibility to shareholders. (Those that execute on that social responsibility have a track record of also achieving financial results.)

One of my favorite quotes is by Stephen Jay Gould, the noted anthropologist. He said, “I am somehow less interested in the weight and convolutions of Einstein’s brain than in the near certainty that people of equal talent have lived and died in cotton fields and sweatshops”. Helping organizations tap into that potential, where ever it may exist in the world is a noble endeavor, fulfilling that social responsibility role, furthering the effort to make the world round again, not just for one group but for everyone. 

In the December 14, 2006 edition of The Wall Street Journal there is a cover story about Dr. Rashmi Barbhaiya who “lived a comfortable life in New Jersey as a researcher for drug maker Bristol-Myers Squibb Co., commuting from his five-acre suburban estate in a blue Mercedes”. Dr. Barbhaiya has moved back home to Pune, India and will continue to work on drug development with an Indian research team at a company he is founding. Why did he move back to India, back home? Because he could.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

The Mysterious Organization

[tweetmeme source=”jeffreysaltzman”]

“Men are not prisoners of fate, but only prisoners of their own minds.”  – Franklin Delano Roosevelt

Those of us conducting organizational development or improvement efforts are making the assumption that organizations can change. Otherwise why would we bother and why would organizations bother to try and improve their performance? If the behavior of organizations was foreordained, collecting organizational, behavioral, or cultural information and rolling it out to the management team and workforce with our elaborate planning and improvement mechanisms would be a complete waste of time. It is implicit in the assumptions we make about our work that organizations should be able to improve, to change for the better if given the right tools to help them along. Makes a lot of sense, doesn’t it?

An organization is nothing more than a unifying concept that allows for common purpose and shared activity among its members. In order for the organization to be successful, membership in the organization has to be perceived as having benefits or no one would bother to join. Some business oriented organizations are so successful at creating common purpose and coordinating member activity that they go “public” which allows non-members to participate in the organization by the proxy of their investment. Yet organizations are essentially non-existent. Have you ever talked to an organization? No, you have not. You talk to the people who are part of the organization, who reside within the organization. Has your car ever been repaired by a car dealer organization, or an appliance in your house repaired by a home repair service organization? No they have not. They are repaired by the service technicians, the people who are part of, or representatives of those organizations. When sick and in the hospital, is your care, and your ability to get well dependent on the medical organization in which you are placing your trust or the people who work there? In addition to the successful selection and development of the best medical staff possible, you are hoping that organizational polices, practices and procedure have been put into place that will lead to a uniformly high standard of care, regardless of the staff person who is giving it, but those policies, practices and procedures were not derived by the organization itself, they were derived by the people who make up the organization.

The people that make up the organization, when it comes right down to it, are the only real asset that the organization has. Yes organizations can have buildings and equipment, patents and processes, but how was all that created in the first place? It was created by the efforts of the people of the organization. Let’s call people the “primary asset”, the asset by which all other assets are created.

So when we make the assumption that organizations can change, what we are really saying is that people can change. People can increase their knowledge, they can change the way they get work done, they can change the way they interact with others along with a host of other attributes. Our goal when we are attempting organizational change is to change the actions, the thoughts or beliefs of the people who reside within those organizations.  People can change the way an organization functions by changing the policies, practices and procedures that other members of the organizations follow, and it is people, organizational members who must take the initiative to create the change, for the organization itself is incapable of doing that. I am not splitting hairs here, for there is a critical distinction between those who are waiting for an organization to “act” vs. those who realize that it is the people within the organization that must “act”. Getting the people within the organization to realize that they must act is half the battle of organizational change.

There is a subtle difference though that must be drawn between what people in an organization can do to help institute change and what others within the organization must do to allow that or facilitate the change. While everyone in an organization can act like a leader and can take the initiative to improve aspects of organizational functioning, for instance challenging dysfunctional dogma, not everyone in the organization has equal ability to access the necessary resources (funds, people, space etc.) needed to make meaningful large scale changes. As you interact with organizations, you interact not with the organization itself, the organization as abstraction; you interact with the people who make up the organization. Yet if the people within the organization are not given the proper tools, equipment, messages, etc, if they are not enabled to perform their respective jobs, your interaction with the organization will likely be less than satisfactory regardless of the quality of the people you are interacting with.

Selection of the best and the brightest people is critical to the overall health of an organization as is the appropriate goal setting for those who are organizational members. Irrespective of whether that organization is a manufacturing organization, a services organization, a research organization or one of the branches of the US government where we elect organization members into their positions, we need to select the best and brightest, those capable of learning and adapting to changing circumstance, those not tied to failing dogma and those who believe in openness and transparency, a lack of mystery. We then need to make use of their ability to adapt to changing conditions by setting appropriate organizational goals and each member needs to be aware of how they can contribute to those goals. Each member as well needs to know if their actions are in fact viewed as appropriate by the organizational leadership in helping the organization to achieve its goals.

An organization, including a governmental organization, is nothing more than an amalgamation of people, bringing to bear their respective talents and skills for common and shared purpose. Organizations do not make decisions. Organizations do not provide recognition or feedback. Organizations do not hire or fire. Organizations do not provide equipment and resources. People do, people who happen to reside within the organizational structure. I think we all intuitively know this however that concept can make some people uncomfortable, people who prefer the anonymity or mystery that the word and concept “organization” can confer.

Some people draw their influence, their power not from their personal knowledge or ability but from the “mysterious” organization. Organizations can seem all powerful, omnipotent, the creator of the rules by which others must live, yet organizations are nothing more than people. Often times knowing little about an organization can create an aura of mysteriousness or an illusion of power or invulnerability surrounding the organization. Think of the CIA, the National Security Administration, or the FBI. Creating mystery around the organization’s structure, about just who is making what decisions evokes a sense of “decisions being made from up on high” from omnipotent knowledgeable beings, beings that are in reality only as capable as many others.

What are some of the consequences of allowing the “mysteriousness” of the organization to continue, to have a lack of transparency in the day-to-day functioning of the organization? When an organization is sheathed in a veil of mystery, created by a lack of transparency, upon the slightest tremor in performance, the slightest crack in the shield of mystery protecting the organization (which is only a matter of time) the illusion of invulnerability will vanish and the consequential reactions of customers, of shareholders, of employees, will be severe. The mysteries of our financial institutions come to mind with most of us not even coming close to understanding what they did, how they earned money. Those organizations and their actions were veiled not so much in secrecy but in mystery generated by complication. Think of Lehman, Bear Sterns, AIG, etc.

Warren Buffet, the head of Berkshire Hathaway and a fairly successful investor (that is a purposeful understatement) in a recent PBS interview described how if he can’t get his head around what a company actually does, how they earn their money, he walks away from that opportunity or divests from it. He is looking for a lack of mystery, an easily understood simplicity in the business model and complete transparency. There are lessons to be learned there, lessons that apply not only to which organizations to invest in, but lessons on how people within organizations should be managed.

Moving from the organizational level down to the individual level, the behavior of people who hide behind the mysterious organization can exhibit some very troubling patterns. If we start at an extreme there has been found to be correlations between tribal groups that disguise themselves with masks, mud, war paint etc. and the consequent amount of cruelty and torture that they apply to their war victims. They are hiding behind the anonymity of their warring organization and the consequent is a higher degree of cruelty than those who go to war with less anonymity. You may be familiar with the caricature of the sheriff, after catching you for speeding, approaches your car with impenetrable sunglasses that hide their eyes. This creates a sense of mysteriousness about them and makes them less of an individual and more of a uniform that is part of the “organization”. This sense of detachment on their part creates circumstances allowing for behavior that is less personal and more anonymous and detached, and perhaps less friendly.

Hiding behind organizational anonymity is utilized by various levels and positions within the organization by members who are looking for the organization to provide them position power, a higher level of authority than what they would get on their own, or to obfuscate the responsibility and accountability for various decisions and/or behaviors. But the mysterious organization is taking a tremendous risk that eventually the majority of its customers, its employees and shareholders will become alienated with its way of conducting itself and they will abandon it when given an opportunity.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

Transparency and Organizational Success

The key to long-term organizational and managerial success is transparency. It will sound somewhat contradictory to some, but transparency around processes, products, and procedures can take the organization to higher levels of performance than those organizations and managers that shroud their activities in mystery.

One challenge I often discuss with senior management groups is the necessity to pick and choose which aspects of performance they will excel upon. As a planning activity when responding to survey results, the organization should not simply have a knee-jerk reaction to the lower or more average rated items, and likewise they should not have a knee-jerk reaction to those items that are simply highly correlated to some outcome. Survey results are a snapshot of what is, at this moment in time, and senior management’s role is not only to manage for what is, but to put into place what can be, what needs to be, to achieve long-term organizational success. Surveys are really good at predicting the future only if the future is a static state – not a likely situation. However, surveys can give you a very good grounding as to where you are now and that forms a stepping off point into the future.   

No organization has infinite resources, so no organization can simply say that “we will be the best in the world at everything we do”. Organizations need to choose, for their market niche, for their industry, for their state of organizational evolution, what aspects of performance will give them a competitive advantage and enable them to succeed. Will we become the most customer focused, the most innovative, the highest quality, the best value, the most trusted, the most transparent? If you take a look at the top performers across a standard set of employee survey items, you will find a somewhat different list of top performers across the items, an indication that there is variance in the list of top performers by area, and one key to success is to pick the area(s), the thread that you will pull that will lead to across-the-board organizational success.    

I would argue that for many if not all organizations transparency is one of those keys. Transparency not only conveys confidence, fairness and quality, organizational transparency forces quality and fairness to occur and hence creates confidence in the organization and its management; transparency is a linchpin. When the organization operates in a fashion that clearly demonstrates that they have nothing to hide, the only path to long-term success is in fact to have nothing to hide. When your customers and your employees have the ability to look within your organization and to see how the work is getting done, how day-to-day processes are being handled, how decisions get made, in an open and clear fashion the organization is forced to do many good things regarding how it runs the various components and processes that make up its business.

Humans though have a tendency to have secrets, to keep some information close to the vest, as it is often viewed as giving a competitive advantage, even if it is only for the short-term. For instance, we build many of our games around just such thought processes. Having a “poker face” means that you don’t telegraph the cards you are holding in your hand to your opponents. Football teams don’t shout out what they are going to do on the next play, they huddle to share that information in secret. The pitcher on the mound during a baseball game will give the barest of nods to the catcher, as signals between the two get secretly shared regarding what the next pitch to be thrown will be, or if the pitcher should throw over to first base instead of home plate. How good does a pitcher have to be though to be able to say, “here comes my fastball or slider, just try to hit it”. If you are a really good pitcher you might get away with that, the more average ones can not. Will your organization step up to the plate and be really good, saying to the competition “here is what we are doing, just try to do it as good as us”, or will it settle for average? The natural tendency of course is to be secretive.

Going beyond our games, other examples abound. Lawyers and prosecutors will stake out positions prior to a trial regarding what sort of plea deal would be acceptable to a defendant or to the state, treating the court room as a version of a high-stakes poker game, trying to get the best “deal” for their client or for the state. They stake out almost absurd positions at times in an attempt to get the most advantageous result. (A comedic interpretation of this can be found in “Liar, Liar” a film in which Jim Carrey plays a lawyer who can not function when he is forced to tell the truth, to be transparent, for 24 hours). Businesspeople behave in a similar fashion when negotiating with suppliers or customers, during an acquisition or when two organizations decide to merge together, behavior that does not lead to long-term trust and relationship building.  Purchasing agents from the company side and sales people from the supplier side have made lack-of-transparency into an art form. There is a tension that arises from keeping secrets, from hiding things a bit. From the world of fashion it is well known that a woman who desires to dress somewhat provocatively, realizes that is often more effective and provocative to cover some things up, to keep some things hidden.

It may be viewed, regardless of whether you are an organization, manager, lawyer, prosecutor, pitcher, quarterback, sales person, or purchasing agent, that you need to keep secrets, because the other side is keeping secrets and you will be at a disadvantage unless you compete in the same fashion. So now we regress to the lowest common denominator. Is that what being human is all about? Is that the noble end state to which we should strive? 

Magic black boxes that have secret processes and information contained within abound all around us, but I am not a black box kind of guy. For instance, when I present survey results back into an organization, I want to point out in the data what is intuitively obvious to any thinking person, what they themselves could easily see if they knew to look at the data in a certain fashion, in other words to be transparent. When I buy a product at a store, I want to know where it was made, what it is made of and what it will do, not simply relying on the marketing information splashed across the label in advertising-like fashion.

I find that a lack of transparency in organizations is often a cover up for lack of robust, high quality processes. The logic is something like “I can’t show you how something is actually done because then I might have to justify why it is done that way, that it is not arbitrary, and that is something I can not do”. I find I have to bite my tongue in meetings when someone says “we have a terrific way of doing this, or figuring out that, better than anyone else has”, but they are often very short on details – details that would point out that in reality they are simply flying by the seat of their pants.

Scam artists play on the natural human tendency of some to trust the word of others. Trust me, take it on faith, believe me, or believe in me…this week in the Wall Street Journal there was an article that described how some organizations are getting around the national “Do not call” list by sending out flyers to the elderly that have a scary warning about how they could lose their house and that they should send away for more information on how to avoid this potential tragedy, a card that is designed to look like it is coming from a federal agency is included. By sending in the card the elderly are opening themselves up to all sorts of sales gimmicks by those they should trust the least – something that is conveniently not mentioned in the flyers sent out. This lack of transparency will last only for a short while, as these organizations operating in this fashion will be ferreted out and stopped. They have nothing real, nothing of value, and nothing substantial to offer people and hence need to rely on a lack of transparency for their short-term survival. Others however will soon rise to repalce them for there is no shortage of dishonest or scheming people out there.   

Imagine a fawn bending its head downward at the edge of a pond in order to sip a cool drink of water. Suddenly the leaves on the edge of the pond, a short distance away from the fawn, rustle. The fawn bolts and runs away from what it perceives as a potential threat. The fawn did not know if that rustling was simply the wind or a coyote looking for its next meal. But by making the assumption that it was a coyote or similar threat, the fawn, while missing out on its drink, helps to assure that it lives to see another day. This assumption by the fawn of intelligent intent by something that may simply be the wind has evolved as a survival mechanism and exists in humans as well. I have a picture that shows a gorilla holding a book in its hands in a position that any human would use if we were reading that book. When I show that picture to an audience, they are drawn immediately to the conclusion, at least momentarily, of intelligent intent or purpose behind the gorilla holding that book in such a fashion. It is only upon further reflection (maybe only a second or two later) that one realizes that gorillas can’t read. By the way the title of the book that the gorilla seems to be reading is “The Origins of Man”. The point here is that when humans find themselves in situations where there is a black box, a lack of transparency regarding how things work or what is going on, there are plenty of mechanisms available to help us fill in the blanks and many times what we come up with on our own will not necessarily reflect reality.    

In The New York Times (October 28^th), there is a story about how everyday Russians are taking on the local traffic police because of seemingly arbitrary stops as they drive around. These stops are characterized as done by police who are actually looking for bribes rather than for any real infraction of the traffic laws. One citizen who has repeatedly pointed out the law to the police and refused to pay the bribe was hauled away and beaten to the point where for the next several months he will be in the hospital. While there are a multitude of causative problems, such as the low pay for the police force, the fundamental lack of transparency as to how they enforce the law and why they are enforcing the law in the fashion they are, is indicative of severe systemic underlying issues that will eventually come to a head. Meanwhile confidence and trust in the system is eroded, the sense that the system protects the average citizen, and citizens should work through the system is nonexistent. The lack of transparency of the system is creating conditions whereby unless rectified, the system itself can collapse.  

Sarbanes-Oxley was initiated in direct response to a lack of transparency on the part of organizational processes and procedures, a lack of transparency that was felt to be so severe as to require a legislative remedy. However, Sarbanes-Oxley is just scratching the surface of what an organization can be transparent about. Sarbanes-Oxley is viewed as very onerous and costly by many organizations, so what is the benefit of this increased transparency to the organization?  How about long-term success. The real benefit to the organization will occur when they can be transparent in such a way that it is not burdensome to the organization, but rather enhances organizational functioning. Image for instance, if a client for a professional services firm could see their work progress through its various stages, in real time, throughout the organization. How much more attractive would that be to other potential customers? Imagine if you could track the history of the items you buy from source to store, so that you knew exactly what it contained, how it was handled and whether it had any defects. The list could go on and on. 

In addition to the above there is another force that is making transparency so key to future organizational success. And in one word that is information; the amount of information that is available to us is growing at a phenomenal rate. In one study it is estimated that the amount of information we humans produce is growing at 50% per year! (I am making no judgments on the quality of that information). With the amount of information available and with people more and more used to using tools that allow them to access that information in a comprehensible fashion, it will become much more common for people to expect more information about the organizations they interact with, and about the products and services that they purchase.  Those products and services couched in mystery, those organizations with obtuse practices and procedures will become less and less attractive entities with which to interact either as an employee or as a customer. Those organizations that continue to operate in mysterious fashion will be less likely to survive and hence organizational evolution as to the normal standards for transparency will occur.

The question is do you want your organization to be ahead of the curve? So throw me your best pitch.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Evil

“In Germany, they came first for the Communists, And I didn’t speak up because I wasn’t a Communist;
And then they came for the trade unionists, And I didn’t speak up because I wasn’t a trade unionist;
And then they came for the Jews, And I didn’t speak up because I wasn’t a Jew;
And then . . . they came for me . . . And by that time there was no one left to speak up.”

Pastor Martin Niemöller (1892–1984)

Evil, for a short word it carries a lot of weight doesn’t it? Evil, it origins, effects, how to avoid etc. has been debated for about as long as humans have existed. One school of thought holds that evil is an absolute, with acts such as murder and rape falling within the definition of things evil. Another school of thought holds that evil has a relativistic definition, meaning what is considered evil changes over time depending on circumstances in the environment. For instance, historically, slavery in the USA was not considered evil by a large group of people who were dependent on its existence for their own well-being (a perfect case of cognitive dissonance if there ever was one).  Slavery today would be considered evil by most, though it is still practiced with an estimated 27 million slaves currently in the world. It is not limited to distant parts of the world but also exists in the USA, with the occasional court case providing a peak into a distasteful underbelly of American life that most of us would like to believe is not there, except that it is. Think about it, as you awoke this morning, had a cup of coffee or tea, your breakfast cereal, 27 million other people woke up as slaves, a number roughly equivalent to the entire population of several countries like Peru, Venezuela, Malaysia, Uzbekistan, Afghanistan or Saudi Arabia. What logic could possibly allow one human to think they have a right to enslave another?

Stanley Milgram conducted what was probably the most famous experiment on evil. He designed a study that showed how easy it was to create conditions that made “ordinary” people, people like you and me, people who in their wildest imagination could not conceive themselves as doing evil, do evil. In his experiment people were urged by an authority figure to keep sending an electrical impulse into a victim in the next room as punishment for failing to learn a task. The “victim”, a confederate of the experimenter, could be heard screaming and as the dial was turned up higher and higher, a consequent of the victim continuing to fail at the task, the screams grew louder, finally falling silent as the dial past a mark labeled “lethal”. Many of the people sending shocks into the victim continued to do so, with little to no protests, past the point of lethality. (No one was actually physically hurt in the experiment). Dr. Milgram’s work was done just after the conclusion of WWII as people were trying to figure out how ordinary Germans could behave as the Nazis did. It was a very disturbing study pointing out that many “ordinary” people when placed in a certain environment were capable of doing extreme evil. (I personally did not need an experiment to know that based on some experiences I have had.) But the question was asked, that was then, this is now, certainly people today would not behave the same way. This new younger generation is different and would not blindly follow orders, or so went the thinking. (Who are you trying to kid?) And in a nutshell, a replication of the Milgram study by Jerry Burger published in American Psychologist (January 2009), showed that people have not changed and the pressures that caused them to obey an authority figure in the post WWII environment still work today. No one should have been surprised by that finding.

C.S. Lewis in the “Inner Ring” (1944), writes, “in all men’s lives…one of the most dominant elements is the desire to be inside the local Ring and the terror of being left outside….Of all the passions, the passions for the Inner Ring is most skilful in making a man who is not yet a very bad man do very bad things.” What he was describing are the pressures that the social animal called Homo Sapiens feel to belong, not to feel excluded. For social animals feeling excluded is one of the more powerful punishments that can be given, driving people to behave in a manner that when later objectively examined looks evil. Being evil of course is not a binary condition, with your behavior being either saintly or evil, rather evil exists like many other things along a continuum.  So while there may be certain behaviors that are “inherently” evil, there are many others that are subject to interpretation and viewpoint, a view that may change the definition of evil over time and is dependent upon the society in which you reside.

Phillip Zimbardo in the “Lucifer Effect” describes in extreme detail the findings from his famous Sanford Prison Experiment. In that experiment he randomly assigned people into one of two categories, prisoners and guards. In short order during the course of the experiment the “prisoners” began to act like prisoners and the “guards” developed all of the worst behaviors you would expect from prison guards, including those that an objective observer would likely describe as evil. The experiment had to be cut off ahead of schedule as the “simulated” environment was proving to be detrimental to the mental health of the subjects. These behaviors were being generated from people who had no criminal record and had been tested to insure that were psychologically sound, or at least as sound as you or I.

On January 22, 2009 a Chinese court handed down death sentences for two businessmen who were convicted of intentionally selling dairy products laced with melamine that resulted in the deaths of at least 6 children. Others were given lengthy prison sentences. Clearly this was evil behavior, right? What if the businessmen did not know that the melamine was harmful and all they were doing is selling adulterated products, simply thinking that none of their customers would ever know. Would that be just as evil? In other words does doing evil necessitate the realization that you are doing evil or is doing unintentional evil just as bad as doing intentional evil? The Chinese government itself is accused of covering up the incident until after the completion of the Olympic Games, an interval that could have potentially led to the deaths of more children. Evil? Or did it serve the greater good to have a “harmonious” Olympic experience, showcasing the goodness that is in China? Is a lack of transparency evil? Lack of transparency has been cited as lack of trustworthiness by 24/7 Wall St. in this article on the least trustworthy companies in America.

John Thain, the former head of Merrill Lynch, who sold his company to Bank of America at the urging of and with financial assistance from the federal government, was forced out of his job when it became clear that the losses of Merrill Lynch were going to keep growing and now threaten Bank of America’s very existence. With the assistance of the USA taxpayers, Mr. Thain redecorated his NYC office to the tune of 1.2 million dollars. He delivered, ahead of schedule, bonuses to the employees of Merrill Lynch before Bank of American could do anything about it thereby increasing the risk to Bank of America and putting more of the USA taxpayer’s money at risk. There are rumors that he asked for a sizable bonus for himself. For an incredibly smart guy, is this simply incredibly poor judgment or could it be characterized as evil? In his head could he not make the connection between his actions and the future success or failure of Bank of America, the risk in which he was placing hundreds of thousands of jobs or did he simply think he would not get caught?

Bernie Madoff, the “supposed” investor who was actually running a ponzi scheme was clearly evil, as his action have destroyed the financial well being of thousands of individuals and charitable organizations forcing some to close and a number of individuals to commit suicide from despondency. My guess is that he will be found to be manifesting psychopathic symptoms as I don’t know how else someone would be able to maintain that fraud for such a long period of time. Is your behavior evil if you are mentally ill? Or by definition are all evil behaviors carried out by mentally ill people? Other executives who were likely sure that they were doing the “right” thing or would not get caught would include those from Tyco, Enron, WorldCom, etc. Were their actions evil, extremely poor judgments, and manifestations of mental illness, extreme arrogance, or simply conforming to peer pressure, going along with the group in order to feel part of the Inner Ring?

Future generations might look back at us and ask how we as a society could have been so evil as to allow the earth to degrade as we did, causing an uncertain future to unfold for them. Didn’t we care about our children, our descendents? How could we allow segments of our society today to go through life as second class citizens, denying them the rights that others are allowed to enjoy? Isn’t that evil? Will we look back at some of our actions after 9/11 and question whether or not we as a society allowed evil to occur? Torture? The degradation of our civil liberties? Isn’t that what the founding fathers fought for in the first place?  I could list out atrocities that are happening in various corners of the world and many people would agree that the actions that are occurring in those varying places are evil. But it rapidly becomes an overwhelming list.

The sad part is that most, if not all of us have within us the capacity for evil, causing harm to another individual, if placed in an environment that brings it forth. But most of us if not all of us also have the capacity to do good if placed in an environment that brings that forth. (We will exclude those with psychopathology). Paying attention, being consciously aware of the consequences of your actions and constantly questioning the rationale for why certain things are done or why certain rules exist is one way to help prevent evil. If we start small, one step at a time, perhaps we can begin to move the dial on how we treat each other and the degree of harm we intentionally or unintentionally cause each other. But that will happen only if we want it to.

© 2010 by OrgVitality, Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

The One Thing

[tweetmeme source=”jeffreysaltzman”]

For many years, in manager training sessions which covered how to utilize your employee survey results, I always suggested to managers that they decide on which two or three issues were the most important and take action on that limited number. No more than two or three, not a long list of tasks, a long list that would almost certainly ensure that nothing would actually get done. Keep the list small, keep the list manageable. Everyone’s plate is already full and piling on to-do’s would simply become overwhelming. I am re-evaluating that advice, but my evaluation is not about whether managers should have a longer list of action items, but rather should the short list be even shorter.

While it may sound odd after spending so much time and energy on planning for an employee survey, collecting the data, analyzing it every which way and reporting it back, but I am beginning to feel that the best advice on what to do with it, in today’s environment is to pick “The One Thing” that rises to the top, that the management team feels will make a substantial difference and to go out and make a difference on it.

When you examine norm data and look at who are the top performers on a particular issue, which companies score most strongly for instance on customer focus, innovation, timeliness, cooperation, etc. or more broadly on Message, Performance enablement (against message) and Future related issues you find a somewhat different list of top performing organizations. Meaning that the list of top performers is a changing list, depending on which item you are looking at. It appears that a widely admired company for instance will not be the top performer across the board necessarily, but rather will excel in some areas, and be more average in others.

I would argue that no company has the time, energy or resources to simply come out and say that “we will be the best in the world on everything”, I would further argue that the logic doesn’t make sense. By definition resources are a limited commodity. No one has infinite money, people or time. Further there are relatively few cases where two companies exist in exactly the same market niche. In fact much time, money and people’s effort are spent in figuring out how to differentiate one’s products from the competition (both the products sold to your customers and the employee value proposition sold to your employees). Organizations need to choose which areas will be most critical to success in their niche. Will it be to become the most innovative, having the leading edge product to market before the competition, or to be the most responsive or to be the most value for the money spent etc? Sometimes these choices are somewhat contradictory. For instance if you are going to be the organization that provides the most value, stretching the consumer’s dollar, it can be difficult to be the most innovative, as innovation often carries a price tag as would concepts like being the highest quality or most responsive.

Companies that try to be all things end up having a confused Message that will hurt their performance, with changing directions and priorities the norm internally and customers seeing and experiencing inconsistencies. No one knows what the organization really stands for, including the organization.

Managers who are examining their employee survey results and require themselves to pick “The One Thing” are in essence defining what is important for their organization to stand for. What is the one thing that if done better than anyone else will enable the organization to succeed?

There is another aspect to “The One Thing” that is important and that is you can’t hide from it. When managers have picked 2-3 issues to tackle from their employee survey results they invariably go after “the low hanging fruit”, the easy fixes. While that is all well and good, sometimes after going after the fruit, they never quite get around to tacking the tough issues, the thorns higher up on the branch. Later on they can point to progress made in some areas, after all we got the low hangers, but the real challenges are still the real challenges, those thorns are still as sharp as ever. If managers pick “The One Thing”, when evaluating their progress they either did it or they did not, period.

The challenge is to pick “The One Thing” that has the potential for the greatest across the board impact, and that is where initial effort needs to focus. Which thing is the thread that if pulled will impact all the other threads that make up the organizational tapestry? Where do you concentrate? As you begin to think this through you rapidly come to the realization that picking “The One Thing” does not necessarily lead to any less work or effort to be expended in responding to survey results, it leads to a more focused, a more concentrated effort. In order to successfully accomplish “The One Thing” it is very likely that multiple other things need to be addressed as subtasks as well.  

Should an organization pick one standard thing, driven from the top so that everyone is working the same issue or should local managers pick the one that is critical to them at their level? I believe that Sr. Managers should pick “The One Thing” that is critical at their level and they should champion it. They should be held responsible for getting it done and for driving it through the organization. Other managers within the organization should be picking their one thing, which is in support of the top level one thing, within their control, if the organization is to have a concentrated effort in responding to the survey results and actually make a difference on an identified critical dimension. I believe that there are some nuances that will come into play here depending on where an organization resides across the board on some issues, but in general that is the concept.

“The One Thing” can be scary. It is much easier to pick a whole host of issues, knowing that if you do a bit of everything you will likely touch on the ones that are really important to your organization, but you will touch on them in a lukewarm, less focused way. If you are looking for maximal organizational improvement impact “The One Thing”, while likely the most challenging, has the most potential to deliver.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com