Management, Net-Net

I’ve written some number of posts already describing the incompatibilities between traditonal, hierarchical, command-and-control management (THCM)  and collaborative knowledge work (CKW). I’ve written that we can have one or the other, but not both.

I note the absence of any signs that THCM is being scrutinised anew – excepting from a few quarters such as Prof Gary Hamel with Humanocracy, and Frederic Laloux with Reinventing Organisations. Even though effective CKW becomes ever more widespread. Not to mention essential to businesses and society both.

Let’s assume for the sake of this partticular post that THCM afforts organisations and societies some real benefits. I personally have my doubts. but lets go with it. Similarly, let’s also assume that CKW also affors some real benefits. For what it’s worth you can probably guess my personal take on that assumption.

The Economic Question

So here’s the (economic*) question: Which affords the greater benefits to organisations: THCM or CKW, net-net?

If we geared how organisationa are run in line with optimising for effective CKW – which would mean downplaying, replacing or abandoning THCM – would these organisations be better off, produce better (finanical, social, etc.) results?

Conversely, does THCM – with the inevitable negative consequences for effective CKW, result in higher profits, margins, and other measures of success (financial and otherwise)?

I’d love to hear your take on this question.

– Bob

*This question kinda assumes organisations are primarily economic entities with success measured in financial and economic terms. I suggest this is actually just a big lie.

How Do You Set Up A Salary Model That Has Everyone’s Approval?

Remuneration policy reflects an organisation’s culture. It’s a calling card for your company and a key element of employer branding. Given current recruiting challenges, it also determines who wants to join or stay with your company.

What Is A Salary Model?

A salary model, or remuneration policy, is a system of guidance that an organisation uses to determine each employee’s remuneration (a.k.a. package). A typical salary model takes into account things like merit, length of employment, and pay compared to similar positions.

Everyone’s Approval?

You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time.

~ John Lydgate

Salary models are almost always contentious, and the source of frequent fractious arguments and ill-will. Few people favour being treated just like everybody else, seeing themselves as individuals. Yes, fairness has a role to play – humans and capuchins both being acutely attuned to the notion of fairness. But who adjudicates what is fair when it comes to salaries and other remunerations?

At Familiar, and now at TheQuintessentialGroup, we seek to treat people as adults, and encourage adult-to-adult interactions. Accordingly, we believe that only the individual in question is at all placed to decide what is fair, and thus to determine their personal individual salary or other remuneration. Our experiences at Familiar showed this idea as entirely workable, and helped us learn the amazing up-side to such a salary model.

This perspective also aligns with the Antimatter Principle: “Attend to folks’ needs”. Who else but the individual can truly decide what their needs are, salary-wise? Needless to say, the Antimatter Principle stands proud at the heart of TheQuintessentialGroup’s approach to community-building, and to business.

So, for clarity, this salary model states:

Each fellow decides his or her own salary (or other remuneration, depending on engagement model). Each fellow is free to change salary or other remuneration levels as and when – and as often as – they see fit.

Note: This particulalr salary model is the salary model of choice for TheQuintessentialGroup.


One wrinkle that did emerge at Familiar, given the totally alien nature of this salary model, was the difficulty some folks had in deciding on the specifics of their package. We discovered that support and dialogue amongst fellows (along with full transparency for all) helped greatly with resolving this difficulty.

Another, more general wrinkle is the collective assumptions and beliefs of the decision-makers and those that sign off – or don’t – on the salary model. The headline of this post is about winning everyone’s approval. Managers and executives that have a sublimated Theory-X view of the world probably won’t approve of this salary model. Which I find sad, for the people and for the performance of the workforce (and thus, of the organisation).

– Bob


“Has everyone’s approval” seems to me a pretty low bar. I’d prefer to see a salary model that “everyone loves and raves about”. How about you?

Quintessence Worth £Billions

Let’s do a little back-of-a-fag-packet math re: Quintessence.

There’s somewhere around 26 million software developers worldwide.

A typical software developer, including on-costs, runs out at about £30,000 per annum (UK more like £90K, BRIC countries maybe £10k).

So that’s a world-wide spend of some (26m * 30k) = £780 billion (thousand million), per annum.

Given an uplift in productivity of 5-8 times for Quintessential development approaches, that’s an annual, recurring cost reduction (saving) of £624 billion to £682.5 billion.

You may find claimed productivity increases of this magnitude (5-8 times) somewhat unbelievable (despite the evidence). So let’s be conservative and propose a modest doubling of productivity. That would mean an annual, recurring cost reduction (saving) of £390 billion. Still not to be sniffed at.

For The Individual Organisation

Let’s consider a single UK-based organisation with 100 developers. Present costs (for the developers alone) will be around £90k * 100 = £9 million annually (more or less, depending on a number of factors). Again, assuming a modest doubling of productivity*, a quintessential approach would garner an annual, recurring cost reduction (saving) of £4.5 million for this example organisation.

What do these figures tell us? That the world and individual organisations both are not at all interested in reducing software development costs (or increasing software development productivity). Or maybe they just don’t believe it’s possible to be any more productive than they are already (it is possible to be much more productive, see e.g. RIghtshifting).

*Or getting twice as much done in a given time, for the same spend. Or halving the time it takes to get something done, for the same spend.

– Bob

Further Reading

Marshall, R.W. (2021). Quintessence: An Acme for Software Development Organisations. Falling Blossoms (LeanPub).

Lost Business

At Familiar (1996-2000) we regularly “lost” work to other companies making lower bids than us. Like many suppliers we were initially both angry, frustrated and disappointed when this happened.

Over time, we studied the phenomenon, saw a pattern emerge, and came to understand these scenarios.

Years later, I wrote a blog post – The Inductive Deductive Schism – explaining the phenomenon of clients commissioning software development work with suppliers who were clearly going to screw up and cost the client much more over the full duration of the commission.

The Schism Summarised

In summary, non-technical, non-engineering clients approach decision-making – i.e. who to commission – in entirely the reverse order to how technical, engineering people might approach the same decision. The follow chart illustrates the order in which clients might approach the question:


Note how trust (actually credibility of the supplier) takes first place, followed by solution fit, and then details of the solution. “Will the proposed solution work?” comes a poor fourth.

Compare with the approach favoured by “technical” people:

Here, the viability of the proposed solution takes first place, and “trust” a.k.a. credibility of the supplier comes fourth.

Bottom Line

So we see that technical suppliers who fail to understand the decision order of their prospective (non-technical) clients will inevitable fail to understand why the commissions go to suppliers who appear inept and likely to produce inappropriate and/or non-viable solutions.

If you’re a “technical” supplier pitching for business with non-technical clients, you might like to focus on your credibility, followed by the “fit” of your proposed solution to the client’s needs – and downplay the details and viability of your proposed solution.

– Bob

Cost of Focus Revisited

[Recent conversations suggest that my post on Cost of Focus failed to explain the idea clearly enough for readers to grasp easily or quickly. As, for me at least, it’s a simple idea, I thought I’d summarise it in brief with a new post (this one).]

Cost of Focus

Let’s start with a definition in a nutshell:

Cost of Focus is the cost incurred when we fail to include all stakeholders* in our deliberations**.

* I generally refer to these folks, collectively, as The Folks That Matter™.
** By deliberations, I have in mind what old-school folks call “requirements capture” or “requirements analysis”, and what I, nowadays, refer to as “needs investigation”.

Put another way:

Cost of Focus is a way of communicating the impact – on the outcomes we hope to achieve – arising from excluding or including specific folks and their needs.

Note: I could have chosen the name “Cost of Flawed Focus” (the cost of focussing on less relevant stakeholders and less relevant requirements), but this seemed a little less snappy than “Cost of Focus”.

Typically, the costs in question accrue from rejection of part or all of the delivered project / system / product / software application by one or more key parties (such as users) whose needs have not been adequately addressed  – and these costs can be massive. In any number of cases, whole systems have had to be abandoned because one or more key stakeholder groups have refused to use the new system. And even when not totally abandoned, oftentimes major costs have accrued from the delays and extra work required to remediate the original errors of focus. (See also Cost of Focus’ kissing cousin – Cost of Delay).

The Folks That Matter™

[The following excerpt first appeared in my blog post The Folks That Matter™. I repeat it here for the convenience of the reader:]

Cost of Focus

Don Reinertsen states that the Cost of Delay – the financial or economic cost of delaying a given feature by prioritising another – is rarely considered in most organisations. Put another way, the way in which delivery priorities are selected and adjusted, the frequency and means of such adjustments, etc., are rarely discussed, and rarely even discussable.

I propose that Cost of Delay is a subset of the wider question stated above, i.e. the question of Cost of Focus.

By definition, we are failing to meet some folks’ needs when we choose to or otherwise exclude certain folks with their particular needs from the set of The Folks That Matter™.

Maybe those excluded folks and their needs are indeed irrelevant, or their exclusion has little impact – financial or otherwise – on the success of our endeavour. But maybe, contrariwise, some of those excluded needs are in fact critical to our “success”. How would we know? The arguments for Cost of Focus are much the same as for its golden child, Cost of Delay.

FWIW, I’ve seen countless projects stumble and “fail” because they inadvertently omitted, or chose to omit, some crucial folks and their needs from the their list of The Folks That Matter™. Get Cost of Delay wrong (prioritise less valuable features), and we lose some money. Sometime a little, sometime a lot. Get Cost of Focus wrong, and we more often lose big time. Cost of Focus often has a much more binary, black-and-white impact.

What is Cost of Focus?

Cost of Focus is a way of communicating the impact – on the outcomes we hope to achieve – arising from excluding or including specific folks and their needs. More formally, it is the partial derivative of the total expected value with respect to whose needs we focus on.

“Cost of Delay is the golden key that unlocks many doors. It has an astonishing power to totally transform the mind-set of a development organisation.”

– Donald G. Reinertsen

Similarly, I’d say that unless and until we have a handle on Cost of Focus, the golden key of Cost Of Delay remains firmly beyond our grasp.

Put another way, until we have a means for deciding to whose needs to attend, the particular order in which we attend to those needs (cf. priority, Cost of Delay) is moot.

– Bob

Further Reading

Cost of Focus ~ Think Different blog post
The Folks That Matter™ ~ Think Different blog post
Cost of Delay ~ Wikipedia entry

Cost of Focus

Or, more specifically, the cost of suboptimal focus – the cost of focusing on some (less relevant) needs of some Folks That Matter to the detriment or neglect of other (more relevant, valuable) needs of other Folks That Matter.

If we commit our (always limited) resources ineffectively, our returns (we might call this ROI) will likewise fall short of what would be possible if we committed our resources more effectively, or optimally.

How Do We Decide?

How we as a individual, team, group or organisation decide who we’re trying to please, delight, satisfy, or otherwise engage with and deliver to?  How do we get to know what folks need, and who to ask about the details of those needs? How do we choose whose needs we can successfully discount or defer when the inevitable resource (time, money, effort) crunches come? Who matters and who does not? Which needs are more relevant, valuable (with respect our chosen Goal) and which, less?

Might it be useful to have some heuristics, or policy, or other forms of guidance, to guide us in decisions on including, excluding and prioritising folks and their needs? Personally, if it were entirely up to me, I’d go with the general principle describe by Goldratt and summarised in my post “What is Value?“.

By way of a quick summary of that post:

Focus on those things that relax the customers’ constraint, so as to increase the overall throughput of their business (a.k.a. “Mafia Offers”). And focus on the customers, or market segments, that you understand best – or at least can work with to find such understanding.

Our aim: to optimise the Needsscape a.k.a. the needs we meet (for example, need for revenue, profit, cost reduction, etc. often sits at top of mind).

Relevance For Workers

This post is not just about decisions made by executives and managers. Everybody has the same dilemma: how do I/we decide where to focus? Which code module would it be better to deliver first? Which tests are more valuable that others? Who would it be better to work with first, to understand their needs (a.k.a. constraints, requirements, or whatever)? Where we choose to focus absolutely determines how others see us and our efforts.

Bottom Line

The bottom line is: the more effective we are at focussing on things that contribute to our personal or business goal (Cf. Goldratt), the more of our goal we’re likely to get. (Is that self-serving? Only if our goal is self-serving. Choose wisely).

– Bob

Further Reading

The Goal ~ Eliyahu M. Goldratt
It’s Not Luck ~ Eliyahu M. Goldratt
Focus ~ Think Different blog post
What is Value? ~ Think Different blog post

Pay Me To Play

The default basis of the usual contract of employment – paying people to work – has gone unexamined for far too long.

What is it organisations want from their waged employees?

In knowledge work at least, the enlightened organisation wants directed learning, collaborative learning, and learning focussed on getting better at understanding and meeting the needs of customers.

“The purpose of business is to create and keep a customer.”

~ Peter F. Drucker

And to make that happen, it’s helpful to attend to the needs of everyone involved in the enterprise.

So why do we expect “a fair day’s pay for a fair day’s work”? (I find it ironic that this comes from the labour side of the contract.)

More explicitly, why the near-universal assumption that the equation should be about paying people to work?

Richard Branson has recently adopted an “as much holiday as you like” non-policy for Virgin HQ staff. Netflix also does not track holidays taken by its staff – and has found that “staff morale, creativity and productivity have all risen” as a result.

Here we begin to see an ever-so-tiny crack in the pay-for-work hegemony.

Extrapolating, why maintain the fiction that so many workers have been seeing through for years? Salaried people don’t get paid for work – they get paid to turn up. Put another way, they’re a fixed cost. And with the continuing changes in the nature of work, where merely turning up has less and less relation to the adding of value, let alone the meeting of needs, why maintain this fiction any longer?

At Familiar, we encouraged people to set their own terms and conditions, including pay rates, hours, etc.. If I was doing the same kind of thing today, I’d go one step further and break the ties between work and pay entirely.

A New Take on Remuneration

How then might we remunerate people? Absent some universal payment from e.g the state to all its citizens, allowing them to pursue their own ends, their own dreams, free from the fetters of having to earn a living, how might a business “employ” people in the pursuit of its purpose?

If it were me, I’d invite each person to set a “retainer” – a level of remuneration sufficient to meet their needs and allow them freedom from the worries of keeping a roof over their heads. Plus a fair share in the rewards of the collective endeavour. Perhaps via a blockchain crypto-equity arrangement.

What about the loafers?

I was in Switzerland recently, and touched in discussion upon the topical idea of a basic “stipend” for all Swiss citizens. It seems this is not popular amongst those already in work. I suspect this is down a fear that (other) people will take advantage and loaf. Another case of the Fundamental Attribution Error? Or maybe people are just a bit more Theory-X than they’d like to admit to themselves.

“Accept the fact that we have to treat almost anybody as a volunteer.”

~ Peter F. Drucker

As far as any one organisation goes, does it really make sense to hire people that are only there for the money? That don’t find some intrinsic motivation – joy, even – in the actual work? I don’t think so. Of course, there will always be the occasional pathological exception. The occasional person that “takes advantage”. But let’s not make the Analytic-minded mistake of defining policy to cater to the worst possible scenario. What would happen is we just treated everyone like they were a volunteer?

Yes. And pay them, as well?

Pay to Play

If we’re no longer hung up on paying people to work, then how else might we choose to characterise the relationship?

Coming back to the purpose of business, if it’s fundamentally about learning, and the best way to learn is to play, then we’re on the threshold of pay-for-play.

That would suit me. I know I’m most useful, most valuable, when I’m happily playing with things. Like ideas. And playing together, with others, like the social animals we are.

After all, we’re not shifting pig-iron here, right?

– Bob

Further Reading

A CEO letter to the Board…long overdue ~ Henry Mintzberg

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

Per Diem

time is money

[Tl:Dr: On what I charge, and why I charge it.]

Towards the end of his life, Picasso was charging around $2500 per minute for his work. And folks paid it. They knew that his work was worth it. Not (just) aesthetically. But commercially, too. A piece by Picasso would obviously fetch enormous sums at auction.

Now, I’m no Picasso, not even in my own field (organisational psychotherapy). And I don’t charge $2500 per minute for my work. Actually, I’m pretty sure Picasso didn’t have a per diem or per minutem rate in his head when he set his price for a piece.

But sometimes folks ask me for a per diem rate for my work. I guess it’s what they’re used to from “consultants”.

Aside: I run pell-mell away from that kind of label, and its implicit associations.

I guess my reluctance to talk per diem numbers also loses me work from time to time. I’d rather that than play the per diem game.

But recently, in line with making no more stupid punts, I’m resigned to being more open about what I charge. Of course I’d like to charge by outcomes. Or “value add”. I have offered a guarantee of value for some twenty years now. And I do a lot of work for free, too. It’s not like I want to be rich, or even that I see my income as some gauge of my personal worth as an individual. The work is by far the biggest reward, in itself. By which I mean the opportunity to work with others – yes, people – on things having meaningful purpose.

Yes, money affords us options. I’m acutely aware of how my stance limits my options. Never more so than now, in fact.

So for the record, my considered response to the question “what is your day rate” is now, for simplicity: “My daily rate is variable – generally from £400 to £1500 per diem (plus expenses) – mainly depending on how much I want to do a thing”.

At least this can serve to get the ball rolling.

Ultimately, the client is the judge of the worth of whatever I do. And, in psychotherapy in particular, the client is the deciding factor in the value of the outcome itself. Even more so than in, say, software development.

I remain, however, aware of the value of a healthy organisation over a sick one. And few organisations seem capable of healing themselves. Many folks baulk at the pay rates of CEOs for example, yet those closer to the reality of typical organisations understand just how much the CEO affects the health of his or her organisation, for good or ill.

Aside: Would I like to be a CEO again? Sometimes I think yes, and sometime no. I guess, like so many other opportunities that come along, it depends.


In case you’re wondering here’s a list of the factors involved in me setting my per diem rate:

  • How busy I want to be: I assume higher rates will limit the number of days I work.
  • Job satisfaction: I assume lower rates will increase the opportunities to work with engaged, curious clients, and enthusiastic people.
  • A clear brief: Clarity makes for a happier me, so “compensation” is less necessary
  • Suitable information, tools and equipment to do a good job: Nickel-and-diming on facilities means a higher rate to compensate for the unpleasantness.
  • Opportunities to be busy: I love what I do, at least, when I’m doing what I love, and am happy to take home less for that opportunity.
  • Feedback: Feedback helps me to improve. The more feedback I get (in a form that I can use) the happier I am and thus the lower the rate.
  • Humane relationships: When folks see me as a person, I’m happier, and so a lower rate is no biggie.
  • Growth: The chance to learn, grow and share (publicly) makes me happy, so again a lower rate works for me.
  • Appreciating my contribution.
  • Seeing others benefit.
  • A likeminded community – executives and workers both.
  • Making friends, and meaningful connections thereby.
  • Frank discussions about progress
  • Length of assignment: Longer assignments mean I spend less (unpaid) time looking for new work, and so lower my rates.
  • Travel. I dislike travelling, so raise my rate where much travel (either frequency or distance) is involved. Also, who gets to carry the cost of the time spent in travelling?

– Bob

Forecasts, Estimates and Cost Accounting


I’ve tried to avoid getting involved in the ongoing #NoEstimates debate. It seems more like a religious war than a discussion with much prospect of a useful outcome. And a classic case of the Analytic-minded folks butting heads with the Synergistic-minded (and a few Ad-hoc perspectives thrown in for extra confusion).

For me, it also seems like a non-argument. By which I mean that all the knowledge is out there, should folks only but seek to look. For myself, I have several perspectives, drawn from these bodies of knowledge, that I shall continue to apply in the context of estimating and #NoEstimates.

The Theory Of Constraints Perspective

I don’t recall much in Goldratt’s teachings about estimates, per se. But he has written much about the futility of forecasting, e.g. customer demand for products. I suggest his arguments also hold true for forecasting costs (estimating). For more info you might like to take a look at his books, and in particular “It’s Not Luck”.

The Systems Thinking Perspective

Systems Thinking has a relevance to cost estimation, in that systems thinking (c.f. Goldratt, Ackoff) observes that a system is a collection of parts, such that improving the performance of the parts of a system taken separately will negatively impact the performance of the whole. In fact, such “local” improvements can entirely destroy an organization.

Cost Accounting assumes that the cost of each part, each operation, can be known separately (“local costs”). This is a false assumption. I suggest that this means the estimation of costs can, in reality, only produce useful numbers when considered in the context of the system (organisation) as a whole.

See also: “Throughput Accounting” ~ Corbett

The Nonviolent Communications Perspective

From this perspective, we can choose to see folks’ requests for estimates as a means for meeting some of their needs. I’d suggest that some other folks see this means as sub-optimal, in that these other folks believe that there are better means for those folks to get their needs met than through estimates and estimating. And I’d also suggest that for those other folks, having to provide estimates is not meeting their needs. Which is triggering in them various negative feelings, possibly including anger, frustration, hostility and anxiety.

Feelings Inventory

So, applying this knowledge, we might choose to discuss what needs all these folks have, which ones are being met and which not, and some options for effective means for getting everyone’s needs met. Hopefully this might lead to an outcome where folks can agree on a mutually joyful way forward.

The Covalent Perspective

In any non-trivial endeavour, there may be some number of different stakeholders and stakeholding communities, each with their own set of needs. These different needs can and will, at least from time to time, conflict in possibly mutually-exclusive ways. The Covalent approach recognises this and focuses on making folks’ needs explicit and visible, such that these conflict can be resolved, to the extent that is ever possible.

See also: “Competitive Engineering” ~ Tom Gilb

– Bob


For all the angst and discussion around how to make organisations, teams and people more productive, we might be forgiven for thinking that the idea of “productivity” was commonly understood and agreed.

However, this is not so.

For example, classical economics has a markedly different definition than does Theory of Constraints (TOC). And if you ask someone – in particular managers demanding “higher productivity” – for an operational definition, you may get a blank look, or other definitions again.

“An operational definition is a procedure agreed upon for translation of a concept into measurement of some kind.”

~ W. Edwards Deming

I’m not arguing for one, common, consistent, clear definition. Rather, I’m drawing attention to the confusion over the term – confusion compounded by many folks taking it for granted that they’re all talking about the same things, that they’re all using the same definitions.

“There is no true value of any characteristic, state, or condition that is defined in terms of measurement or observation. Change of procedure for measurement (change of operational definition) or observation produces a new number.”

~ W. Edwards Deming

Here are just some (differing) definitions I found on the Web:

So, what is productivity? I’m confused now. Are you?

My Own Definition

When I’m talking about productivity, for example in my presentations and workshops on organisational effectiveness and Rightshifting, I have a particular definition clearly in mind:

“Productivity is the act of bringing a company closer to its goal”

~ Jonah, in The Goal by Eliyahu M Goldratt

Personally, although fully agreeing with Goldratt on this definition, I find it’s hard to use in an explanation or discussion, especially with folks unfamiliar with Goldratt’s work. As the Jonah character goes on to say:

“Productivity is a meaningless concept unless the folks in an organisation understand what their goal is.”

And the book (The Goal) takes a whole book to explain how to discover the Goal in any given organisation.

Aside: This definition of productivity makes it closely congruent with “organisational effectiveness”. See this chart:

So for the purposes of discussion, I sometimes use another definition, derived from the TOC formula:

Productivity = Throughput / Operating Expenses


Throughput = Sales – Totally Variable Costs

(a.k.a. the rate at which the system generates money through sales).


Operating Expenses = all the money the [organisation] spends in order to turn inventory into throughput.

So, my simpler definition is:

Productivity is how much it costs an organisation to move one unit (measurable step) closer to its goal (whatever its goal may be – for example, getting a particular product to market).

Note: “Cost” here, and below, is in the most general of terms, maybe a composite function of the Five Capitals, and not necessarily just in financial terms e.g. money or cash.

Or, as an (almost) operational definition, where the goal is (improving) organisational effectiveness:

Cost to move the organisation one unit (say, 0.1 of a rightshifting index point) to the right on the effectiveness axis of the Rightshifting chart.

Note: This is much the same as the Rightshifting measure named “Drag”.

Productivity is a Property of the System

By which I mean, that productivity is never a property of an individual or team, but of the whole system of work within which individuals and teams do their work. This is often referred-to as Deming’s 95% rule.

Productivity in Knowledge Work

Taiichi Ohno said “People don’t go to Toyota to ‘work’ they go there to ‘think’”.

If we take this at face value, then The Goal of Toyota, at least from Ohno’s point of view, was to get its people to ‘think’ (which I take to mean, study the system – the way the work works – and improve it).

Make it Clear

So next time, and every time, the topic – or issue – of productivity comes up, think “Are we all on the same page about what this word actually means?”

Some discussion, to ensure everyone is talking about the same thing, pays major dividends. And, yes, increases productivity.

– Bob


Since I first wrote this post, it occurs to me that some readers may infer that I believe productivity is an “unalloyed good thing”. Inasmuch as productivity meets the needs of some folks in an organisation, we might choose to accept this at face value. Personally, I reject worshiping at the altar of productivity, and chooser rather to appreciate that a blind pursuit of productivity at the expense of folks’ wider needs can do much more harm than good.


In December 2019 I wrote a post titled “Your Real Job” to highlight just how irrelevant productivity is in most organisations. You might like to take a look.

Further Reading

Cost Accounting is Productivity’s Public Enemy Number One – Abonar’s Blog
Theory of Constraints: Bottom Line Measurements – TOC Guide

The Shrink is IN

I have struggled for many years to find a model for positive and effective engagement with organisations looking to improve their effectiveness. Agile coaching has not worked for me – or for clients, much – because of its generally limited (i.e. individual, team or departmental) scope. Ditto Scrum Mastering (and this compounded by a widespread misconception about what Scrum Mastering even means, and just why it might offer any value).

Consulting likewise misses the mark, not least because clients rarely understand how to get anything like the best out of consultants and consulting advice. It’s often like the organisation needs consulting on how to use consultants. Of course great consultants should and can do this – clients permitting – but Sturgeon’s Law tells us these folks are rare.

So I’ve been on the lookout for a model of engagement that affords the following opportunities:

  • Models positive behaviours, such as fellowship, mutual respect and collaboration.
  • Promotes introspection and self-renewal, allowing folks to find their own way.
  • Respects the individual.
  • Avoids compounding common dysfunctions, such as parent-child dynamics (c.f. Transactional Analysis) and alienation.
  • Replaces dependency and learned helplessness with self-reliance and self-confidence.
  • Congruent with positive psychology (i.e. PERMA): Positive emotions, Engagement, Relationships (social connections), Meaning (and purpose) and Accomplishment.
  • Offers incremental and tangible progress at a pace set by the folks involved.
  • Therapeutic (i.e. healing, curative, but also sometimes preventive or supportive).
  • Social and humane.

Accordingly, I have come to regard “therapy” as a model closely matching these attributes, and specifically, “psychotherapy“. But, from a systems thinking perspective, the clients or “patients” are not the individuals in an organisation, but the organisations themselves.

So these days I choose to call myself an “Organisational Psychotherapist”. What does that mean, exactly? What does Organisation Psychotherapy look like in practise? And how can an approach founded on the principles of therapy help  organisations improve their effectiveness?

Aside: We have to assume that an organisation wants help, wants to improve its effectiveness (or maybe some other aspect of its “personality”, functioning, or well-being). If thirty years of coaching has taught me one thing, it’s that there’s no helping folks (or organisations) that don’t want to be helped.

Why Therapy?

Maybe the first question folks have is “why therapy?”. Why take a therapy stance when most other folks choose to act as consultants, or coaches? Fundamentally, it’s because I believe an organisation, as a whole, has to work its issues through, and take responsibility itself for doing that. Too often, consultants get hired to shoulder responsibility on behalf of the organisation. And when these consultants leave, clients all too often find themselves back at square one – or worse. Like a game of Snakes and Ladders.

snakes and ladders

So, to organisational psychotherapy. As an analogy, we might consider the work of Virginia Satir, widely regarded as the “Mother of Family Therapy”.

“Families and societies are small and large versions of one another. Both are made up of people who have to work together, whose destinies are tied up with one another. Each features the components of a relationship: leaders perform roles relative to the led, the young to the old, and male to female; and each is involved with the process of decision-making, use of authority, and the seeking of common goals.”

~ Virginia Satir, Peoplemaking, ch. 24 (1988).

“It is now clear to me that the [organisation] is a microcosm of the world. To understand the world, we can study the [organisation]. Issues such as power, intimacy, autonomy, trust, and communication skills are vital parts underlying how we live in the world. To change the world is to change the [organisation].

~ Virginia Satir (paraphrased)
The New Peoplemaking, ch. 1 (1988)

Organisational Psyche

In The Nine Principles of Organisational Psychotherapy, I stated as principle 3:

3. Organisations Have a Collective Psyche that Responds to Therapies

Organisational therapy procedes on the basis that the collective psyche of an organisation is similar in nature to the psyche of the individual, and is similarly amenable to therapeutic interventions (although the actual techniques and underlying concepts may differ).

That’s to say, the collective consciousness of an organisation is a thing in its own right, and we can examine it, interact with it and (help) alter it, for better – or worse.

“…the qualities that all human beings need and yearn for in other humans, a sense of being cared for, valued, wanted, even loved…what for a lifetime, human beings strive to find. Some of the most important :  empathic concern, respectfulness, realistic hopefulness, self-awareness, reliability and strength –  the strength to say ‘yes’ and the strength to say ‘no’.

~ Stanley S. Greben

I believe organisations, too, need these qualities. All too often organisations – in part or as a whole – come to regard themselves with some degree of self-loathing.

Where’s the Value?

Paul DiModica, in his excellent book “Value Forward Selling” suggests that people appreciate a clear communication of the value of an idea or proposition. To that end, here’s what I believe is the (unique) value in taking a therapy stance with respect to e.g. improving organisational effectiveness (a.k.a. Rightshifting):

The organisations with which I work consider therapy because some aspect or aspects of their “cognitive (brain) functioning” is not working as well as they would like. Despite these organisations’ basic competence, they have not been able to resolve these issues to their own satisfaction, from their own resources.

With improved functioning comes an improved ability to cope, to grow, to mature, and to build necessary capabilities. And with these comes increasing effectiveness, revenue growth, margins, and customer, employer, employee and shareholder satisfaction. Not to mention organisations which are able to play a more positive role in wider society.

How Does It Feel?

So, what does it look like and feel like to be an employee of an organisation that has chosen to work with an organisational therapist?

Firstly, it’s probably useful to understand that therapy does not try to “fix” anyone or anything. Personally, I most often choose  to approach a new engagement from a perspective akin to Solution Focused Brief Therapy:

“SFBT focuses on what [the client organisation] wants to achieve through therapy, rather than on the problem(s) that made it seek help. The approach does not focus on the past, but instead, focuses on the present and future. The therapist/counselor uses respectful curiosity to invite the client to envision their preferred future and then therapist and client start attending to any moves towards it – whether these are small increments or large changes.”

Given that we’re talking about organisational therapy, there’s the added dimension of working with many different folks within the client organisation – as opposed to working with just one person in individual therapy, or maybe half-a-dozen or so people, in family therapy situations.

This typically involves helping these folks improve their ability to think collectively and purposefully. I believe the key to this is the – often missing – ability to have effective, purposeful dialogue. For those (very few) organisations already skilled in this, little need to be done, but for the majority, basic work on dialogue, and thence to focus, shared visions, etc. will be required.  

What to Expect From Organisational Therapy

Some folks might have some experience of one-to-one, or group, therapy. But few indeed will have had any experience of organisational therapy. Here’s a brief run-down of what folks might reasonably expect from organisational therapy.

Who Receives Psychotherapy

Most organisations, at one time or another need some help. For some organisations, talking together, and assisted by a therapist, helps them understand ways they can improve things. Sometimes organisations seek therapy at the advice of a consultant, coach, executive or investor. Sometimes it is overwhelming stress or a crisis that causes an organisation to decide to choose therapy. In addition, many times organisations might choose therapy to gain insight and acceptance about themselves and to achieve growth and improved well-being. Therapy offers these benefits to any organisation that is unhappy with the way it acts, performs or feels, and wants to change.

What Is Organisational Psychotherapy?

Organisational Psychotherapy is a relationship in which an organisation, as a whole, works with a professional in order to bring about changes in its feelings, thoughts, attitudes, and/or behaviour. The task of the therapist, therefore, is to help the organisation as a whole make the changes it wishes to make. Oftentimes the organisation entering therapy knows changes are needed but does not know what changes to make or how to go about making them. Often, too, the organisation is fragmented not used to holding an organisation-wide “internal dialogue”. The organisational psychotherapist helps the organisation figure these things out. Therapists help clients in many ways. Exactly how depends on the orientation (approach to therapy). Here the therapist’s training and beliefs on how therapy should work can have some influence. The most common therapy approaches I use are Positive Psychology, Solutions Focus, Dialogue, Scenario Modelling and Clean Language, with influences from Eastern wisdom including Buddhism, the Tao, and Zen.

Positive Psychology

“We believe that a psychology of positive human functioning will arise, which achieves a scientific understanding and effective interventions to build thriving individuals, families, and communities.”

~ Professor Martin Seligman and Mihaly Csikszentmihalyi

Positive Psychology involves the use of findings from positive psychology research. It helps organisations to change – in the ways they would like to change. Positive Positive psychologists seek “to find and nurture genius and talent”, and “to make normal life more fulfilling”. There is an emphasis in positive psychology on promoting well-being, as opposed to treating illness.

Solutions Focus

While the method and scope of the Solutions Focus approach to organisational therapy are wide-ranging and comprehensive, the basic principles are simple:

  • identify what works and do more of it
  • stop doing what doesn’t work and do something different.

The Solution Focused approach was developed in America in the 1980s. Two simple ideas underpin Solutions Focus organisational therapy:

  • Even organisations with major dysfunctions will occasionally do good things, and achieve positive results. Solutions Focused practitioners will help uncover these exceptions –  whatever the organisation is already doing, which might contribute to progress on, or resolution of the issue(s) at hand.
  • Knowing where you want to get to, makes the getting there much more likely. Solutions Focused practitioners ask lots of questions about what life might be like if the problem was solved. As the answers to these questions gradually unfold the client begins to get a picture of where the organisation should be focusing.

Choosing a Therapist

“A psychoanalyst’s personality is his [or her] major therapeutic tool.”

Henri F. Ellenberger

You will probably want to ask potential therapists about their orientation. Ask them what this will mean for your therapy experience. Most therapists are not rigid in their orientations. You should also ask a potential therapist about use of evidence based practice. Ask them if they use methods that have been found to have evidence that they work for organisations like yours. Organisational therapy is provided in many ways, with a prevailing focus on the  organisational psyche, not individuals per se.

“…it is becoming increasingly obvious that the (psycho)therapist’s personality is a more decisive factor than the school to which he belongs.”

~ Arthur Koestler 

“Psychotherapy…is a craft, the aptitude for which derives more from a general experience of living than is generally supposed.”

~ Peter Lomas

What Happens in Psychotherapy?

The therapy process varies depending on the approach of the therapist. It also differs for each individual organisation, and its situation. However, there are some common aspects of therapy that organisations are likely to experience when they enter a therapy relationship.

The first session with a therapist is often a consultation session. This session does not commit the organisation to working with the therapist. This session helps you to find out whether psychotherapy might be useful to you. In addition, you decide whether this particular therapist is likely to be helpful. During this session, you may want to discuss any values that are particularly important to you and your organisation. This first session is a time for you to decide if you and your organisation will feel comfortable, confident, and motivated in working with this particular therapist.

You should also feel that you can trust and respect your therapist. You should feel that your therapist understands your organisation’s situation. This is also the time for the therapist to decide whether he or she is a good match for your organisation. At times, a therapist may refer you to another therapist who may be able to work better with your organisation.

After an initial assessment stage, the rest of therapy is to help your organisation gain insight and address current problems. It can also help your organisation alter the emotions, thoughts, and/or behaviours it wants to change. The therapy process focuses on the goals which the organisation surfaces during therapy. How these goals are met depends on the orientation of the therapist and the methods the therapist may use.

Organisational therapy typically requires more activity than just talking about particular issues. These activities may include such things as role-playing or homework assignments. This is where parts of your organisation can adopt and develop the new skills it decides are valuable for the future.

The amount of therapy an organisation receives will vary depending on the orientation of the therapist and the specific treatment plan used. Some interventions are relatively short. Others require a longer time commitment.

Each session of therapy usually lasts about an hour, with members of some part of the organisation. Longer sessions, with wider participation, are also sometime advised. The therapist will generally visit with your organisation once or twice a month. However, therapy timelines are rarely rigid (or predictable). Your organisation may change the schedule to fit the needs of various groups and/or the therapist.

It is a good idea to ask your therapist about the general methods he or she may use with you in therapy. Also, ask about the length and frequency of therapy you might expect.

Some therapists suggest other treatments in addition to talking therapy. These may include workshops, off-sites, conferences, reading or other things. They may also use support groups, with members drawn from different organisations.

After a period of time, you and your therapist may agree that therapy has been successful in helping your organisation achieve its immediate goals. Even after therapy has ended, some therapists may suggest a follow-up e.g. several months later to check on how you are doing. If your organisation has new problems or feel that past problems still are not better, it may choose to return to therapy.

One important thing to remember is that all types of therapy do not automatically work for every organisation. You should always consider other options when a particular therapy is not working.

What Makes For Good Therapy?

Even as far back as the 5th Century BC, Hippocrates had apparently expressed the greater importance of studying the patient than of studying the patient’s disease.

Rather than assert my own opinion directly, allow me to share the selected views of some noted folks:

“Experience has taught me to keep away from therapeutic ‘methods’ as much as from diagnoses … everything depends on the man and little or nothing on the method.”

~ Carl Gustav Jung

“Some years ago I formulated the view that it was not the special or professional knowledge of the therapist, nor his intellectual conception of therapy (his ‘school of thought’), nor his techniques which determine his effectiveness. I hypothesised that what was important was the extent to which he possessed certain personal attitudes in the relationship.”

~ Carl R. Rogers

“…the crucial factor in psychotherapy is not so much the method, but rather the relationship between the patient and his doctor or … between the therapist and his patient. This relationship between two persons seems to be the most significant aspect of the therapeutic process, a more important factor than any method or technique.”

~ Victor E. Frankl

“…however much therapists may focus on the technical aspects of their procedures, an increasing body of evidence suggests that it is the personal relationship between themselves and their patients which is experienced by the latter as the most potent therapeutic force.”

~ David Smail

“There are many schools of psychotherapy but results appear to depend on the personal qualities, experience and worldly wisdom of the therapist rather than on the theoretical basis of the method. … There is growing evidence that effectiveness in (psycho)therapy is primarily dependent on the quality of the relationship between the quality of the relationship between therapist and patient and that, in turn, depends on the quality of the therapist.”

~ Robert M. Youngson

“If any single fact has been established by psychotherapy research, it is that a positive relation ship between patient and therapist is positively related to therapy outcome.”

~ Irvin D. Yalom

Organisational therapy works as it does because it is not a pseudo-science, magic or a kind of medical treatment, but simply because it is a highly refined method of therapeutic co-operation, both between the therapist and the organisation’s psyche, and between the folks in the organisation itself.

– Bob

Further Reading

How Psychotherapy Works ~ Online article


Most developers are, how shall we say – somewhat detached – from the sharp end of the businesses in which or for whom they write software. I have also noticed than many other folks in organisations also have some trouble getting their heads around the practical implications of a period or programme of successful improvement. Of course things will be “better” – but just what kind of better?

In this post I provide an illustrative example of the benefits of a simple doubling of organisational effectiveness, i.e. a move from say “1” to “2” on the rightshifting scale – primarily from a financial perspective – acknowledging that many other, non-financial, benefits can, and do, also accrue.

For the sake of keeping things simple, we’ll assume an organisation – say, a software house writing custom software solutions for a range of clients – of one hundred people in total, with a break-even (i.e. zero profits) revenue in year one of ten million rubber dolphins (a notional currency) i.e. RD10M . We will also assume (somewhat unrealistically) both that the organisation has no trouble selling all it can produce, and that its effectiveness doubles overnight, on the stroke of midnight at the end of year one.

Option 1 – Trousering the Benefits

This option supposes a doubling of effectiveness across the whole business, that is to say the organisation produces, in year two, double the amount of work, with the same number of staff – and thus revenues double to RD20M. Costs remain more or less the same (no growth in headcount, although maybe some nominal additional variable costs). So profits rise from zero (year one) to (revenue RD20M less costs RD10M = profits RD10M) in year two. As far as the developers, etc. in the business are concerned, they are working no harder than in year one. Product (or service) quality will also remain much the same (or continue to improve at the same rate).

Option 2 – Investing in the Future

This option also supposes a doubling of effectiveness across the whole business, but the business chooses to produce (and bill) the same as it did in year one, with the same number of staff, and thus revenues remain at RD10M. Costs will remain much the same (i.e. no growth in headcount). So profits will remain at break-even (RD0) in year two. However, in this case the workforce will only be half as busy on billable work as in year one, allowing for innovation time, holidays, social time and “doing things properly”. There will also be much time for improving the way the work works, automating suitable areas of the workflow, learning, personal and professional development, etc..

Option 3 – Move Upmarket and Segment

This option again supposes a doubling of effectiveness across the whole business, but this time the business chooses to increase the value-add, producing the same volume of work as in year one, but at a higher quality, spending more time working with clients on their issues, taking extra care to deliver the right things, producing more prototypes and experiments, and generally using the extra time to add extra (billable) client value and win business with higher-end clients. Extra value (should) mean higher prices, and thus revenues rise – let’s assume to something like RD20M. Costs remain more or less the same (again, no growth in headcount). So profits rise from zero (year one) to (revenue RD20M less costs RD10M = profits RD10M) in year two. I would expect some amount of this profit to get re-invested back in the business, not least in more salubrious offices, cars, travel, facilities, etc. to go with the organisation’s repositioning and rebranding of itself as a “premium supplier”.

And Combinations

Of course, in any real scenario, the organisation will likely choose to combine aspects from all three of the above options.

Has this helped make the benefits of Rightshifting more tangible, more apparent? BTW If you can think of any other likely scenario options, please let me know.

– Bob

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