The Productivity Paradox

The media is alive this morning regarding the long standing issues we have on productivity. Emphasis is on how lack of productivity is restricting income growth which is restricting the economy. First port of call is whose fault it is, and the default route that it’s all about low cost labour.

Probably, all of these things have a degree of truth to them, but in the scheme of things are secondary.

Productivity is low because we are still trying to improve the things we have been doing or making, rather than doing or creating new things.

at GrowHouse, we understand the power- and the limitations – of improvement better than most. We keep our process excellence ninjas keen and hungry, but in the end, improvement is an exercise in diminishing marginal returns. Get even close to six sigma measures, and getting incremental improvement on 97%+ levels of efficiency is an exercise in rock breaking.

Innovation on the other hand creates a class of activity that resets the game. Not only do we start with new services and products, but we have a whole new field on which to let loose the ninjas.

But innovation – and it’s big ugly sibling invention – require different skills, mindsets, and leadership. they have higher levels of risk, and require purpose and passion.

We have a paradox – most of the measures we take to motivate improvement kill the creativity on which innovation thrives:

  • Have people work for an expected reward.
  • Focus people on the expectation of being evaluated.
  • Deploy lots of checking and surveillance.
  • Make them follow a limited range of processes
  • And make it a competitive exercise.

(a major nod to Margaret Heffernan – “A bigger prize”)

If we really want to improve productivity, we need to innovate at every level. To explore possibility, and let people’s imagination loose.

Most of our structures, management processes and leadership practice pay lip service to this, and fall back on an evaluation mindset. It is the same principle that applies to the way we are educating tomorrows staff – and it’s substantially flawed and counterproductive.

The fast growing economies have cottoned on to this – China, Korea, and the like. they are changing the way they collaborate, create and lead. We need to do the same. Doing more of what we’re doing won’t solve it.

We’re running a series of exploratory conversations with people to explore possibility. The first is in Derby on 28th May, and we’ll be running the next in London. If you want to explore that space where knowledge ends, and possibility begins, we’d love you to join us.

Gene Therapy for Business?

I wrote recently about business life cycles and our unwillingness to accept them – in particular the death end of them. We get really attached to current success, or even just acceptability, and look to defend it. We resist ideas that might upset the balance, or indicate radical change as anomalies, when in reality they offer huge opportunity.

There is a great article just published by BCG. It argues, cogently, that there is no such thing as “Corporate DNA”. Businesses don’t just evolve naturally, they need confident action. They cite businesses like GE, Siemens and Apple who have forced change in their business, abandoning obsolescing business models before they became a liability. They anticipated (but had probably not identified) the likes of Lenovo, which in 30 years has gone from a $25,000 start up in a Guard House, to a $39 billion business operating in 60 countries in 30 years.The article emphasises the inevitability of increased volatility as technology continues to have it’s way, and the corresponding need for business (R)evolution if companies are to survive.

What it does not say, but I think is implicit, is what this does to the business / employee relationship. I suggest it makes it far more honest, even if far more challenging.

We have been used to employers as “guardians”, where we develop a tacit relationship where we bring our skills and perform, and they look after us. This has not been the case for many years (although the memory lingers, fostered by Job Ads and HR speak)

Today, it is simple, and honest. Employment is a relationship of convenience, forged by matching needs of skill and requirement, for as long as it lasts – which is getting ever shorter.

For those of us who sit in the wake of corporates, it is a real wake up call. As businesses, or individuals, we are as healthy as our ability to match emerging requirements makes us.

Success yesterday, and today, is comforting, but seducing. As the rate of change accelerates, we become obsolescent quickly unless we learn and develop on our own terms – not other people’s.

As individuals, we need to adopt different mindsets. Of curiosity, “constructive paranoia” and adaptability. We need to manage a paradox – to be great at what we do today, secure in the knowledge it will soon be redundant.

Our futures are a function of mindset, a business or career model that knows what to do next, without necessarily knowing where it will lead, and the motivation and purpose that will drive us through the challenges these changing conditions will give us.

The time for being a business or career tourist – going where others have already been, is past. It’s time to be an explorer.

We need to find out how to modify our business and career DNA.

http://www.growhouseinitiative.co.uk

Potbound.

It’s Spring. On the one hand I love it – the end of winter, renewal, growth everywhere. On the other hand, it can overwhelm me. Everything grows at once, and there is that sudden rush as we seek to bring our gardens under control. Despite the regularity of Spring, it still takes me by surprise. I had become used to Winter.

It strikes me that in reality, businesses are much the same – and that we can learn a lot from Gardeners.

Businesses have seasons. They sprout from an idea, grow, thrive and then wither.

Gardeners in tune with nature benefit. They do not try to ignore the seasons, they work with them. They variously take cuttings, grow seedlings, graft plants onto new rootstock. Create hybrids.

They fell, prune, and transplant.

They know how to look after the soil.

They know when to harvest, and when to plant.

So why is it in business, we don’t do the same? We often expect our idea to thrive as though it’s always Spring. We let the business grow, but in effect keep it in the same pot – a mixture of products, markets and locations, amplified by processes, protocols and the fertiliser of efficiency. – and the danger is, it becomes potbound.

As the business grows, so do the people in it – ideas, ambitions, confidence, networks. This growth needs room.

But far too many of us have let  let our businesses become potbound. People and ideas find nowhere to grow, so they wither whilst the main plant absorbs all the nourishment, until, inevitably, Autumn arrives.

I’ve often wondered why we are so resistant to letting businesses die back.

I guess there are lots of structural reasons – prime amongst which are that investors and bankers don’t like the idea of a pause in growth, even though that is necessary to gather the resources for the next stage of growth. As owners and employees we become dependent on the produce. We got used to perpetual credit and have become very poor at harvesting and storing so we can overwinter. We fell out of the idea of rhythms and cycles. Which is a mistake.

Generally speaking, we’re nowhere near as good at managing business cycles as gardeners are at managing the seasons.

In the industrial era, the main nutrients for our business was capital and fixed assets – machines and offices.They were easy to measure, difficult to move and could be kept in the asset register.They could be hothoused. They were difficult to transplant successfully – it was an expensive and risky process.

In the connection economy, the main nutrients for our businesses is talent – and that’s as mobile as dandelion seeds. It will take root anywhere conditions permit. It’s difficult to measure, and cannot be owned.

Traditional businesses are struggling in the connection economy. Everything they do is replicable. They are unwieldy, and have to resort to forcing growth through extracting every ounce of cash, even though the peak of their cycle has passed. They become hostages to the expectation of continual Spring.

Connection economy businesses on the other hand are flexible, and can find the space to grow because they are mobile. They experiment, hybridise and adapt. They can follow the seasons. There are lots of places in them for talent to grow, and talent has a choice.

After seven years of economic winter, Spring has arrived.

Time to cultivate your business.

If you want to know more about helping businesses thrive throughout the seasons, talk to us at the GrowHouse.

Signal to Noise

In physics, the SNR – signal to noise ratio is the basically the power of signal (the information we want) divided by the power of noise (the information we don’t want).

In our business and personal lives, maybe the same principle applies. And therein lies a challenge.

The signal we look for – things that are meaningful to us – the art, relationships, meaning and the contribution we can make, amongst many others, is pretty much a constant. when we have clarity of purpose, when we are loved, we don’t go round saying I need more of it. These things are not consumables.

On the other hand, the noise in amongst which we look for signal has increased exponentially. The ability to communicate , social media, advertising, a drive to consume, and spam in all it’s forms has changed our signal to noise rations out of all proportion in the last twenty years. When we don’t understand that, we can lose signal altogether in trying to deal with the noise.

But there’s an upside. Without noise, we wouldn’t be able to identify signal. It provides the contrast, the background that allows us to separate one from the other.

But we have to give signal a chance. Processes to get rid of noise are all very well, but they may just take signal with them. Penzias and Wilson in 1964 tried for three years to get rid of background noise in their experiments, only to find that it contained the information that would win them a Nobel Prize.

To separate signal from noise we need to give it space. Time out. An opportunity to reflect. The time to discuss with others without an agenda – time to let our brilliant brains do what they do best – make connections that computers can’t. As yet, digital devices process brilliantly, but don’t wonder about things.

It’s Sunday. Use it to advantage.

Have a great week ahead.

The quiet revolution you’re in. Like it or not.

The interesting thing about revolutions is that nobody knows they’re happening until they’re over. Up to that point, we get worried about anomalies, and try to get things back to normal.

So it is with centralisation. We have seen it (or often chosen not to see it) in the rise of everything from Napster to the organisation of Al Qaeda. It has been written about by leading thinkers like Ori Brafman and Seth Godin.

Established organisations have chosen to ignore it, to treat it like an anomaly that will disappear as we get back to normal. It won’t, of course.

The major impact will not be on these organisations, with their bloated overheads and addiction to the industrial economy  models. Their shareholders will gradually desert them, and they will sink silently from view, the services and products they provided delivered by smaller, faster, more passionate advocates of the connection economy.

The real impact will be on those who choose to remain inhabiting them in the belief that they will be looked after, and that their position gained by being really good at what is increasingly obsolescent will secure their future. It won’t.

In his brilliant book “Orbiting the Giant Hairball“, Gordon MacKenzie tells the story of hypnotising chickens; how if you draw a chalkline on the floor, and point the chickens head at it, it will stay there transfixed. He makes the point that much of corporate behaviour is similar. Policies, rules, protocols, structures. Lines on the floor. He wrote the book in 1996. It’s one of the most insightful, funny, important books relating to business I have ever read.

The point is this. The organisation , even the best meaning one, cannot protect you in today’s (and tomorrows) uncertainty. In a connection economy, its about you and your connections. It’s about understanding, developing and loving your own unique talents. Those that cannot be replicated, or reduced to a job description, or a qualification.

 

It’s about your insight, creativity and genius. Your willingness to do work that matters, and take risks for. Then it’s about having a purpose, and connection to people who share it. Its about a sense of impact every day, on your own terms, not an annual appraisal on someone else’s. Giving yourself permission, not seeking it from someone else.

If you can do that within an organisation, that is a seriously good result. In any event, and wherever you work, treat it like self employment, because, in effect that is exactly what it is becoming. Huge opportunities, quite scary, joyous and more than a little chaotic. A chance to be you.

The near future belongs to networks of purpose. Decentralised, flexible, low overhead teams of people who share the characteristics of craft – “a marriage of head , heart and hand” in pursuit of  shared aims on things that matter to them. The days of “solutions” are behind us, and the requirement for originality with us.

The end of centralisation.

Enjoy the revolution.

 

The Limits of Specialists

We ended 2014 on something of a perceived high. Specialists were reveling in a recovering economy, jobs growth, and bright prospects for 2015.

As we enter 2015, it feels different. Oil Prices, Greece, Syriza, Elections.

In reality of course, nothing has changed except the people we pay attention to; and we tend to pay attention to specialists. This is not to decry specialists – anything but, they are vital. But there are two sorts.

Firstly, the “professional specialists” – managers, pundits, politicians – those whose living depends on them being seen as the “go to” to help us manage our relationship with uncertainty. The problem tends to be that these specialists see the world through the lens of their specialism, and their status within it. One of their biggest fears is to be seen to be deficient in their knowledge, and are very unlikely to get promoted, or voted for, by saying “I don’t know”.

The second group; I’ll call them “vocational specialists” are different. Their focus is the body of knowledge of their profession, and their purpose is its ability to support and help others – Teachers, Doctors, Social workers. These are people whose ethic is based as much on what they don’t know – being able to spot gaps and anomalies – and use their expertise as a platform for finding out. They have no problem in saying “I don’t know”.

The challenge for us cones when we try to treat them in the same way. The ay we measure teacher’s performance using just hard metrics and financial incentives is not only limiting, it’s hugely demotivating to people whose intrinsic motivation lies elsewhere. Similarly, asking professional specialists to use anything other than hard data to measure their performance is equally limiting.

What we have lost along the way is the role of the generalist – those who look at the bigger picture without the blinkers of a specialist, have an understanding of both sides, who are able to allocate specialists appropriately, and maintain a constructive balance so that all are giving their best, learning, and enjoying what they do.

At a time of increasing uncertainty, we need generalists. The best are likely to act as “Consigliere” – advisers and influencers (though the image of “The Godfather” might cloud perception!). Another model might be a Concierge. These types of individual make things happen, make sure context is maintained, and keep things together – enabling the specialists to do their best work. It is a very real, and very challenging, position.

As we get into our stride in 2015, the one thing we can be certain of is that events will occur which will confound specialist predictions. Those who rely on specialists alone will carry the burden – as happened in 2008.

Maybe one of the challenges for us is to create a better balance, and recognize generalists for the perspective and balance they bring, so that we end up less surprised than we might otherwise be.

Being less surprised is more prepared, and more prepared is more successful.

Dependence, Independence, Interdependence and Permission

Most of us are brought up to be dependent – on other’s approval, on “experts”, and to needing permission.

In the industrial era, it made sense, hierarchies were effective means of command and control, and compliance meant the difference between earning a living, or not.

As technology and social structures changed, we moved towards greater independence, often with money at the heart of it. Lifelong employment disappeared, and with it notions of loyalty and duty towards an employer, to be replaced by independence  for those who had marketable skills, or independent means. It gave us a sort of lonely freedom – not being governed, but without the work community that often provides support and meaning.

The most successful are now moving beyond this to interdependence – retaining all the options of independence, but choosing communities and “tribes” of those they choose to share their work and lives with. I work with a lot of fast growing businesses, and this feature – an interdependence with colleagues and clients – is a very visible feature. It gives them purpose, adaptability, flexibility and huge capability and attractiveness.

Many established organisations, and most of government, has not yet understood this. They pay lip service to it without understanding its implications. A dangerous place to be complacent. Those centralised institutions, from Head Office to Westminster, are becoming less and less important to those with the talent to create the future.

Adam Lent has written an excellent blog on the RSA site, which examines what 21st Century organisations might look like. In my view, worth the five minutes it will take to read.

The future is arriving faster than you think, whether you’re ready or not.

It offers immense opportunity, but won’t ask permission.

Permission to Speak Sir?

There are interesting fault lines beginning to appear as we move from an industrialised economy to one founded on connections.

Businesses used to be able. to a very large degree to control the nature and flow of information, through marketing and PR, and because most people were connected only locally,

That no longer holds true. Everybody is connected. The business or organisation can longer mediate those connections – whatever frantic efforts lawyers make,

Listening to the slightly comical conversation on Radio 4 this morning regarding footballers having to clear their tweets through PR, it struck me just how much in denial many organisations are.

Our organisations are the people in them. As individuals, we are responsible for what we say and do,and the quality of organisations is a function of who they choose, and who chooses them.

Culture is different to marketing. It cannot be shaped, or controlled by budget. Jim Rohn said that we become the average of those we associate with.

That is now true of organisations. It makes a huge difference.

Where are you working this morning?

If your’e in an open plan office, then this video may well resonate.

There is a huge shift underway not only in how we work, but how we learn, how we relate and how we collaborate.

Although it may not feel like it sometimes, there is a huge power shift underway. We all have unique abilities, worldviews and talents; and an ability to use them to live that matters – to us, and others. Resumes are history. Attitudes, dispositions and networks of purpose are the new currency of careers.

Who you are matters. For most of us, to borrow from Schumpeter, the organisation we work for is crumbling beneath the assumptions it’s built on.

 

Accountability vs Responsibility

There’s a difference.

I’m in London attending a conference in Greenwich, and the hotel I was booked into (a very pleasant one in the centre)had a flood, and moved me to the only feasible alternative, a budget chain hotel a few minutes away. A nuisance, but no problem; stuff happens.

The interesting lesson was the “agency problem”. having dealt with the mechanics, the problem was delegated to me – organising taxis, sorting bills, all the minutiae. The opportunity to turn a challenge into a positive experience went missing, as job descriptions, and the boundaries of accountability to line managers, kicked in.

At the conference (In the University of Greenwich – great location) the person looking after the conference could not have been more different. constantly there, not obtrusive, sensing what was going on, and providing things as the need appeared, but before requests were made. My guess is he’s on the same sort of contract as those in the hotel, but he took responsibility.

Accountability is to others. Responsibility is to ourselves.

It’s a big difference.