Archive

Rightshifting

Compensation

notes

Becoming a more effective organisation (company, business) necessitates a whole passle of far-reaching changes. It starts – more or less – with mindset, of individuals, and of the collective. But the ripples spread out across the face of the organisation into all its corners.

Just one of these many corners is the compensation scheme.

The Americans call it compensation, in the UK we call it salary, wages, pay or rate. I like the word compensation. It reminds me that paying people is more about compensating them for all the crap they have to put up with in their eternal struggle to do even a half-decent job, than it is about paying them for the job itself. I’ve long held the opinion that for people who’re doing a job they love, getting paid for it is an irrelevance. Although we all have to keep a roof over our heads, of course.

In the typical Analytic organisation, the basis and rationale for compensation is rarely if ever discussed. It’s one of the many “givens” that brook no discussion. Some widely considered bases for compensation include:

  • Piecework – pay by the unit of output.
  • Time – pay by the hour or day.
  • Fixed rate – pay by the month or year-divided-by-12.
  • Bonus – Additional pay for qualifying Individuals or groups, often contingent.
  • Equity – a share in the success of a product or company.

And most Analytic organisations have a byzantine structure of pay-grades, bands, etc. where folks have to “slot in” dependent on various factors such as age, seniority, time with the company, etc..

The Agile Way

In adopting, say, Agile software development (a toe-in-the-water approach to shifting towards a Synergistic mindset), compensation rarely changes its status to “discussable”. There arises a troubling dissonance around:

a) The long-standing assumption that pay is a motivator.
b) A dawning realisation that pay is not a motivator.

And the basis for compensating e.g. developers is rarely included in the Agile adoption agenda.

If we took it seriously, of course (the Agile adoption, that is), then compensation would perhaps get considered along with the technical practices, self-organisaing teams, changes in job title and roles, etc.. Not as a direct motivational factor, but as something that impacts on folks’ sense of fairness, and thus their attitude, morale, and, ultimately, productivity (via discretionary effort).

Follow the Dominoes

If we follow of the whole line of dominoes to the end, then we might realise that:

  • Most folks are far more sensitive to what’s fair, than to other aspects of compensation policy.
  • As the system (the way the work works) accounts for 95% of an individual’s productivity, then maybe making 95% of an individual’s compensation contingent on the way the work works might make sense. At least, consider making a connection between an individual’s compensation and their contribution to the way the work works (although that contribution is governed by the system, too).
  • Self-organisation, turned up to 11, means teams organising their own compensation, too.

At Familiar, we took a simple Occam’s Razor approach to cut through all this. We chose to believe that only the person in question had an unequivocal understanding of their own needs, vis-a-vis compensation, and of their own work/contribution/value-add. So, in line with the Antimatter Principle, each person got to set their own compensation level/rate/terms. That seemed to work pretty well.

Would you be willing to begin making this topic discussable within your organisation?

- Bob

Why Corporates Can’t Change

Why do Analytic-minded organisations (e.g. the typical Corporate) keep trying to change yet repeatedly fail?

∵ belief in the utility of violence
∴ belief in the utility of command (and control)
∴ belief that change can be commanded (1)

∵ belief in the utility of extrinsic motivators
∴ belief that change can be effected through extrinsic motivation (2)

∵ extrinsic motivators reduce performance – longer term, and in knowledge work
∴ use of extrinsic motivation to effect change longer term, and in knowledge work, fails (3)

∵ people’s behaviours are a product of their beliefs about how to get their needs met
∴ people’s behaviours change when their beliefs about how to get their needs met, change

∵ people will not change their beliefs just because they are commanded to do so
∴ people cannot change their behaviours just because they are commanded to do so
∴ commanding people to change fails (4)

∵ belief in change through command (1) and/or extrinsic motivation (2)
∵ change through extrinsic motivation fails (3), commanding people to change fails (4)
∵ no knowledge of other means to effect change
∴ corporates can’t change

Simply put, collective belief in ineffective strategies stymies corporate change initiatives, every time.

- Bob

Further Reading

What’s A Manager to Do? ~ Think Different blog post

Shifting Mindset – The ROI Is There

What’s the return on investment (ROI) in shifting an organisational mindset?

Let’s be more specific about what we’re talking about here.

What’s the Investment?

Normally in ROI calculations we’re talking about investment in terms of money – or proxies for money, such as effort, resources, capital or operational expenditure, and so on.

For effecting a shift in mindset, money-related investment will include:

  • Staff time
  • Opportunity costs
  • Specialists (coaches, therapists, facilitators, etc.)
  • Increased waste as folks work through the change.
  • Training
  • Incidentals (revisions to policies and policy documents, changes to internal processes, etc.)

And in shifting an organisational mindset, we’re also faced with the personal – that is to say, emotional – investment from everyone, across the organisation, in self-examination, unlearning (of old assumptions) and new learning (of a new frame, perspective or viewpoint). Ultimately, even a new way of being in the world of work.

What’s the Shift?

Depending on the current organisational mindset, the shift – I’ll call it a Rightshift, to indicate the desired direction of the shift, to the right, towards a more effective organisation – can in fact be one of several major shifts.

  • For organisations with a currently Adhoc mindset, the desirable shift will be to an Analytic Mindset.
  • For organisations with a currently Analytic mindset, the desirable shift will be to a Synergistic Mindset.
  • For organisations with a currently Synergistic mindset, the desirable shift will be to an Chaordic Mindset.

And this is not something that can be delegated or bought-in. Leaders must model the shift themselves, yet bring the rest of the organisation along with them, lest they become seen as alien and bizarre.

What’s the Return?

For each shift in mindset, the approximate return is a 200% increase in organisational effectiveness. That’s to say, the whole organisation can reduce its operating costs by a factor of three, or increase its throughput by a factor of three with no increases in operating expenses or inventory (including CapEx).

Aside: Reducing operating costs is a bit of a fool’s errand, though, as, especially in knowledge-work businesses, this may mean reducing headcount, and as the organisation wins new business with its improved competitiveness, quality, service, etc., those apparently surplus yet skilled and experienced people will soon be needed again, to deliver against the uplift in demand. See also: the Porsche manufacturing turnaround story.

How do these amazing, incredible, unbelievable levels of return come about? Where do they come from?

  • Increased morale and employee engagement leading to higher levels of discretionary effort, lower social loafing, etc.
  • Reduced cycle times leading to reductions in e.g. costs of delay and improved flow of value.
  • Reductions in WIP leading to reductions in inventory / carrying costs.
  • Improved relationships skills leading to more effective working relationships, reduced coordination costs, etc..
  • Improved product and service quality leading to improved customer focus, better customer experiences and gain in market share.
  • More organisation-time spent on things that matter.
  • More focussed CapEx investment leading to higher CapEx ROI overall.
  • Reduced debt levels leading to reductions in debt-servicing costs.

You may wish to take a look as some earlier posts on this blog, and in particular the Marshall Model, to understand the challenges involved in realising this kind of fundamental shift in organisational mindset, and thereby achieving the stated ROI.

- Bob

Organisational Transitions

A ship all at sea on a stormy ocean

Some time ago I wrote three posts describing each of the three transitions in the Marshall Model. Just today, I was thinking that maybe it might meet some folks’ needs to describe “organisational transitions” in slightly more general terms.

Walk and Sail, Walk and Sail

The journey from ineffectiveness to effectiveness is often a long and winding one. With many a mis-step and wrong turn along the way. Notable during this journey are its several discontinuities. By which I mean, there come times when simple, incremental changes cease to make any significant difference. At times like this, organisations on the journey find themselves on the shores of a wide ocean. Here, they may camp for a while, considering whether to build ships and set sail, or settle on the shore, never quite finding the courage to search for the new world.

“Focus on the journey, not the destination. Joy is found not in finishing an activity but in doing it.”

~ Greg Anderson

These are the times when the question of transition comes up. For the new world about which we’re talking is the new world of a different perspective. A quantum shift in mindset. A wholesale replacement of the organisation’s current memeplex with a new one. One that is wildly at variance with what has gone before.

Lewin’s Change Model

Kurt Lewin was a German-American psychologist, and one of the modern pioneers of social, organisational, and applied psychology. His work includes Lewin’s equation: B = ƒ(P, E), which states that human behaviour is a function of a person in their environment. He also developed a model of organisational and personal change, the Lewin Change Model, which describes change as a three stage process:

  1. Unfreezing
  2. Transition
  3. Freezing

“A change towards a higher level of group performance is frequently short-lived. After a ‘shot in the arm’, group life soon returns to the previous level. This indicates that it does not suffice to define the objective of planned change in group performance as the reaching of a different level. Permanency of the new level, or permanency for a desired period, should be included in the objective.”

~ Kurt Lewin, “Frontiers of Group Dynamics”, Human Relations, Volume 1, pp. 5-41

Bridges’ Transition Model

William Bridges created his Transition Model to describe what happens to a person internally, inside a person’s mind, as they go through change. This Model posits three stages:

  1. Ending, Losing, and Letting Go.
  2. The Neutral Zone.
  3. The New Beginning.

Organisations too (more specifically, the organisation’s collective mind, a.k.a. the organisational psyche) go through a similar three stages of transition – at each discontinuity. Somewhat like settlers setting sail in search of a new land:

  1. Casting off; setting sail; leaving one’s homeland
  2. All at sea
  3. Finding safe harbour in a new land

Stage 1: Casting Off; Setting Sail; Leaving One’s Homeland

Organisations enter this initial stage of transition when they first realise they are standing of the edge of a chasm (discontinuity). This stage is often marked with e.g. denial, anger, bargaining, depression and, maybe, ultimately acceptance that something must be done.

At this stage, people up and down the organisation may experience a range of emotions as they wonder if their needs will be met in the “new world”.

Until people realise that something is ending, they may struggle with these emotions. Acknowledging these emotions and atttending to folks’ needs can help people cope with their uncertainties.

Stage 2: All At Sea

In this stage, the organisation finds old certainties dissolving, business as usual is more or less broken, and different groups begin to pursue different agenda, often conflicting. Waste and rework will likely rise, and consequently so will workloads.

Think of this phase as the ocean between the old and the new worlds; in some ways, people will look back, fondly, towards their old homeland, while they are also trying – with excitement and trepidation, both – to find the new. And like the ocean, events can be unpredictable – by turn stormy and calm, with both fair following winds, headwinds, and doldrums.

Crossing The Open Seas

On the open seas, support is vital. Particularly mutual support. It’s likely few if any know where the new land lies, and the immensity of the sea, and being out of sight of land, can daunt even the bravest of hearts.

Stage 3: Landfall – Finding Safe Harbour In A New Land

The last transition stage is a time of homecoming, thanksgiving – and renewal. The organisation has landed in the new world. Everyone knows what to do – and there’s lots to be done!

At this stage, like Cortez, you may choose to burn your boats. The faint-hearted may wish to re-cross the ocean and return to their old world and old ways of thinking and being. And that would be a long and perilous journey indeed.

“Success is a journey, not a destination. The doing is often more important than the outcome.”

~ Arthur Ashe

Summary

Any transition is a major undertaking, Yet most organisations have no idea there is an ocean, let alone a new land. And when their steps bring them to the shore, many blithely carry on walking and get soaked – or even drown – before they even notice the ocean is there.

Is your organisation plodding along, step by painful step, through the hinterlands, or is it camped on the shore?

“If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.”

~ Antoine de Saint-Exupery

- Bob

The Business Case For Organisational Psychotherapy

I’m 99% certain that 99% of the people I meet have 99% of no idea what an organisational psychotherapist does, and moreover, the value that such a skill-set can bring to knowledge-work organisations.

In an attempt to clarify my value proposition in my own head, so as I might just be able to explain it a little better to those few folks who are kind enough – or interested enough – to ask, I’m writing this post.

The Ten Second Version

Organisational Psychotherapy:

“Helping folks find and adopt more effective strategies for getting their needs met (in group settings).”

Three Focii

Organisational Psychotherapy focuses on:

  1. Shifting the collective mindset of the organisation
  2. Improving the organisation’s health
  3. Improving the collective cognitive function of the organisation

Shifting Collective Mindset

The collective, organisational mindset is absolutely key to the effectiveness of knowledge-work organisations of every kind, everywhere. Who better, then, to work on shifting an organisation’s collective mindset than folks who understand organisational psychotherapy?

Note: In my work with Rightshifting and the Marshall Model I explain why mindset is the key to effectiveness – and the challenges involved in making the necessary shifts.

It follows, then that to shift an organisation to the right, to make a business significantly more effective, involves effecting major change in the collective mindset of that organisation/business. Who has the skills, experience and training to do this? Organisational psychotherapists.

Organisational Health

In addition to shifting collective mindset, and in some ways related, organisational psychotherapy delivers improved organisational health.

Patrick Lencioni writes in his book “The Advantage”:

“The single greatest advantage any company can achieve is organizational health. Yet it is ignored by most leaders even though it is simple, free, and available to anyone who wants it.”

What is a healthy organisation?

From an organisational psychotherapy point of view, it’s one where:

  • people find deep joy and fulfilment in working together
  • everyone actively and enthusiastically cooperates with one other
  • people are well-aligned to the shared purpose of the organisation
  • we see high levels of trust, self-organisation and mindfulness
  • thinking and feeling are natural behaviours
  • most folks strive to be the best they can be
  • everyone’s needs are being attended to

And why is it “the single greatest [competitive] advantage…”?

Because even the smartest organisation in the world, the one that has mastered strategy and finance and marketing and technology, will eventually fail if it is unhealthy. Because without the diseases of politics and confusion and piecemeal-ism, an organisation will inevitably become smarter and tap into every bit of intelligence and talent that it has. And because of the direct correlation between organisational health and cognitive function - and thus the performance of everyone engaged in knowledge-work.

And, why then is it not on most organisations’ radars?

Because it’s hard work. It’s neither a quick fix nor a silver bullet. It’s not sophisticated nor shiny-shiny nor sexy. It doesn’t excite those executives who like to find their next great idea in the Wall Street Journal or the Financial Times. And it doesn’t play well with the mechanistic, Theory-X oriented mindsets so prevalent in businesses today. Nor with their Balance Scorecards and RACI matrices and coercive process-orientations.

Above all,

“…the biggest reason that organizational health remains untapped is that it requires courage. Leaders must be willing to confront themselves, their peers, and the dysfunctions within their organization with an uncommon level of honesty and persistence. They must be prepared to walk straight into uncomfortable situations and address issues that prevent them from realizing their potential.”

A Story About the Benefits of a Healthy Organisation

If you’re interested in a story about the tangible – and bottom-line – benefits of organisational health, you might like to read Lencioni’s “Four Obsessions of an Extraordinary Executive“.

Improved Collective Cognitive Function

Knowledge work such as software development involve people working – thinking, feeling and learning – together. Most people are relatively unskilled and thus relatively ineffective at this. Organisational psychotherapy enhances collective mindfulness – from which emerges both improved awareness and improved group-oriented skills, and thus improved collective cognitive function. And people who are more skilled at working together do better work.

 

I’d love to hear why organisational psychotherapy and its benefits re: rightshifting mindset, organisational health and improved collective cognitive function isn’t on your organisation’s radar.

- Bob

Further Reading

Seven Reasons Why Every Business Needs A Therapist ~ FlowchainSensei
The Power of Meeting Your Employees’ Needs ~ Tony Schwartz and Christine Porath (HBR article)
Collective Cognition in Humans ~ Clément, Krause, et al.
5 Reasons Why Business Can’t Afford to Ignore Psychology For Another 100 Years ~ Louise Altman

Local Optima

Comparison of approaches

I’ve heard that a picture is worth a thousand words. And more recently, some research has shown that information presented visually has more likelihood of convincing.

So, here’s a chart. It illustrates relative effectiveness of the different approaches to e.g. developing software products and systems. The X-axis is the relative effectiveness, increasing towards the right. This same axis also maps from a narrow, local focus on parts of a system (left-hand side) to a broad, global focus on the interactions between the parts of a system (right-hand side).

Note: This chart represents aggregates – any given development effort may show some deviation from this aggregate. And also note, we’re talking about effectiveness from the broader perspective: meeting customer needs, whilst also satisfying the developers and other technical staff, managers, executives, sales folks, suppliers, etc. – i.e. all stakeholders. I also assume the aggregates exclude LAME, Wagile and other such faux approaches where folks claim to be working in certain ways, but fail to live up to those claims.

What Is a Local Optimum?

This post is primarily about the pernicious and dysfunctional effects of using approaches predicated on local optima. By which I mean, taking a narrow view of (part of) a “system of problems” aka mess.

Many folks seem to believe that improving one part of the whole organisation – e.g. the software development function, or an individual team – will improve the effectiveness of the whole organisation. As Ackoff shows us, this is a fallacy of the first order: it’s the interactions between the parts of the organisation-as-a-whole that dictate the  whole-system performance. In fact, improving any one part in isolation will necessarily detract from the performance of the whole.

This performance-of-the-whole is most often the kind of performance that senior executives and customers (those who who express a preference) seem to care about – very much in contrast to the cares of those tasked with, and rewarded for, improving the performance of a given part.

“When a mess, which is a system of problems, is taken apart, it loses its essential properties and so does each of its parts. The behavior of a mess depends more on how the treatment of its parts interact than how they act independently of each other. A partial solution to a whole system of problems is better than whole solutions of each of its parts taken separately.”

~ Russell. L. Ackoff

Ad-hoc

Also known as code-and-fix, hacking, messing about, and so on. Coders just take a run at a problem, and see what happens. Other skills and activities, such as understanding requirements, architecture, design, UX, testing, transfer into production, etc., if they do happen, happen very informally.

Batch & Queue

Perhaps more widely known as “Waterfall”. In this approach a big batch of work – often a complete set of requirements – passes through various queues, eventually ending up as working software (hopefully), or as software integral to a broader product or service.

Scrum

One of the various flavours of agile development. Other dev-team centric approaches (xp, kanban, scrumban, FDD, etc.) have similar relative effectiveness, whether combined or “pure”.

DevOps

DevOps here refers to the integration of dev teams with ops (operations/production) teams. This joining-up of two traditionally distinct and separate mini-siloes within the larger IT silo gives us a glimpse of the (slight) advantages to effectiveness resulting from taking a slightly bigger-picture view. Bigger that just the dev team, at least.

Lean

Lean Software Development aka Lean Product Development. The (right)shift in effectiveness comes from again taking an even broader view of the work. Broader not only in terms of those involved (from the folks having the original ideas through to the folks using the resulting software /product) but also broader over time. Approaches like TPDS – including SBCE – improve flow and significantly reduce waste by accepting that work happens more or less continuously, over a long period of time, not just in short, isolated things called “projects” nor for one-off things called “products”.

FlowChain

(Including e.g. Prod•gnosis.) My own thought-experiment at what a truly broad, system-wide perspective on software and product development could make possible in terms of improved effectiveness.

Acme

The best possible approach in an ideal world. I’ve included this, somewhat speculatively, as a milestone for just how far we as an industry have yet to go in embracing the advantages of a broad, interaction-of-the-parts perspective, as opposed to our current, widespread obsession with narrow improvements of individual parts of our organisations.

Please do let me know if you’d like me to elaborate any further on any of the above descriptions.

- Bob

Postscript

For some reason which made sense inside my head at the time, I omitted Theory of Constraints from the above chart. For the curious, I’d place it somewhere between Lean and FlowChain.

 

Connections

Michelangelo-Sistine-Chapel

My friend @RicZWest responded to my previous blog post by asking for some “integration” of the Antimatter Principle with some of my more established work, specifically the Marshall Model. I’m happy to be writing this post in response.

Context – The Principle

The roots of the Antimatter Principle go way back. Mutuality as a fundamental characteristic of the human condition is hundreds of thousands of years old. It’s literally in our genes.

Personally, I’ve seen the practical benefits of “attending to folks’ needs” in the context of software projects and businesses for the best part of twenty years. Yet it was only few years ago that Nonviolent Communication gave me a vocabulary to think and talk about this kind of thing. And it’s been less than a year since I chose – with some trepidation –  to put a name to the principle.

“I’m convinced that there’s nothing that human beings like more than to contribute to one another’s well-being.“

~ Marshall Rosenberg

I completely share this conviction. And have used it as the foundation of my work, my life, and FWIW the Antimatter Principle.

Context – The Model

The Marshall Model proposes that organisations exist in one of four states. Progression (and regression) between these states is rare, but possible. And progression – e.g. from left to right – is essential if a knowledge-work organisation is to become significantly more effective. Note: I choose to limit any claims as to the relevance of the model, to knowledge-work organisations.

The ‘trick’, of course, is in effecting the step-change from one stage to the next. Many have written about the challenges involved. I find much to like in William Bridges take on the issue (cf “Managing Transitions“).

My intent with the Marshall Model is to help folks remember that organisations at different stages might benefit from different styles of intervention. Different kinds of change initiatives. Initiatives tailored to where they’re at, so to speak. And to realise also that choosing ill-matched kinds of intervention can be dysfunctional and counter-productive. Hence its subtitle – “Dreyfus for the Organisation.”

Connecting the Dots

So, just how are these two things – the Antimatter Principle and the Marshall Model – connected?

Firstly, I believe the Antimatter Principle can help organisations progress – no matter which stage they’re at. The key challenge with making progress, particularly the quantum leaps from one stage of the Model to the next, is winning the engagement of the folks involved. Not just the workers, but the middle-managers, the executives, the customers – everyone.

The Antimatter Principle, as such, was born out of a recent experience working with a large multi-national. Senior management had all kinds of plans for a bright future – and all kinds of issues with a gloomy present. The core of the issue – at least for Product Engineering – was the logjam in making things better. In bringing about positive change. And in engaging everyone in that. Nothing was going to happen until that issue was addressed. Management fiats were not the answer. That would have only served to make things even worse. Creating an environment where folks could choose to make a difference and be effectively engaged in that – that was the future we saw as essential.

Secondly, the Antimatter Principle suggests a way of life in organisation founded on a shared purpose – the purpose of making folks’ lives more wonderful. Having one or two key individuals championing folks’ needs is all very well, but having a whole community with a common, shared purpose for that, with support for mastering the necessary skills – that’s infinitely more powerful.

Thirdly, and most pragmatically, organisations that begin to attend to folks’ needs are organisations that have taken the first step on a virtuous spiral of ever-improving alignment of their business with its people, its customers, its markets and the society in which it operates. And that has to be wonderful for everyone.

“Everything we do is to make life as wonderful as we can for our self. What makes life more wonderful than anything else is contributing to the well-being of other people.”

~ Marshall Rosenberg

- Bob

 

Follow

Get every new post delivered to your Inbox.

Join 10,912 other followers

%d bloggers like this: