The Business Sensei

Don’t Lose Your Marbles!

Not long ago, I had the opportunity to observe participants in an estimation contest. Participants were given a problem along the lines of figuring out how many marbles are in a jar or balls in a pit. Participants then had to come up with an approximate answer based on the information that they could glean from the scenario: for example, they might be able to at least approximately measure the size of the marbles.

I was particularly impressed by one of the groups: they were very analytical. They discussed the problem in very reasoned terms. They only included very few people in their discussion. They came up with a very well-written, very logically developed answer. They were very wrong. While all the other answers clustered around the correct response, this one group had an answer that was so far out in left field that it was in some other stadium.

This, of course, is the challenge in estimation games: it’s easy to make very simple mistakes early on and then run merrily off along a completely wrong, but apparently logical, trail. In estimation games this is pretty much harmless. However, in more general areas of problem solving the same errors that can derail an estimate can also lead to much more significant problems. This isn’t necessarily all that surprising in that real-world problems are much more similar to estimation games than we might like to acknowledge: they often require us to make assumptions, act with incomplete information, make deductions about facts we cannot easily observe, and come up with a best guess at the end. Fortunately, there are some lessons we can draw from estimation games that will improve real-world problem solving, particularly when people are involved. Consider, for instance, any scenario in which you need to work with other people or cooperate with another organization and where your goals are not necessarily in complete alignment.

It’s easy, as the left-field group did, to limit participation in the discussion. In fact, this is often necessary, as too big a group can easily become unmanageable and prevent any productive discussion from taking place. However, keeping the size of the group small does not mean keeping the knowledge base available to the group equally small. Group members need to track their assumptions and the conclusions based on those assumptions. They then need to go out and verify as many of their assumptions as they can: it’s easy to find evidence to support your conclusions; the hard part is looking for evidence that will contradict them. The second is what needs to happen. Identify what information would tell you if you’re making a mistake, and then figure out to identify that information. Speculate. Play “what if?” games.

Of course, it’s also important to remember that marbles in a jar have no motivation (outside of a bad joke about method acting). Situations dealing with people have considerably more moving parts.

An important part of “people estimation” is understanding motive. When dealing with human systems, being able to think about what other people are doing and why they might be doing it is critical. Peter Ossorio, of descriptive psychology fame, makes the argument that in any given situation people will try to make the most advantageous move they can. This doesn’t mean that they’ll always get it right or that they’ll always execute even a right action correctly or effectively. However, it does mean that it can be very productive to consider how other people might view a problem or situation and consider what their likely course of action might be. Consider as well why they might doing what they are doing.

Their reasons might not be obvious, they might not be comfortable for you to think about, and they may contradict some of your basic assumptions, but those reasons exist. Figuring out what they are goes a long way to enabling you to make a better “estimate” and take actions that are more likely to get you to a result that you like. To be fair, maybe the other people involved are stupid or evil; I’ve certainly heard this given as an excuse for not considering their perspective. Ultimately, what difference does it make? They will still take actions, and your success may well depend on your ability to anticipate and work with or around those actions. Approaches which shut down speculation and exploration are most likely going to do nothing more than decrease the accuracy of your estimate.

When dealing with marbles in a jar, being in left field just means that you’ve failed to win a prize. When dealing with people problems, being in left field might just mean that you’ve lost something considerably more valuable. In this case, maybe it’s not so bad if you’ve only lost your marbles.

Plan to fail

This is an excerpt from my new book, Organizational Psychology for Managers.

I have to confess to being very tired of the old aphorism, “If you fail to plan, you are planning to fail.” Planning to fail is actually a worthwhile exercise, while failing to plan is simply a good way to waste time and energy without any benefit at the end. Failure is a surprisingly useful tool, at least for those who are not afraid to use it.

Seeing how your plan is failing can give you vital information on how to shift focus, allocate resources, and generally adjust your strategy. On a more subtle level, we won’t fully trust a plan that fails to consider failure: we need to have confidence that our plans or our feedback systems will alert us to something going wrong in order for us to believe it when things are going right. I’ve frequently seen companies abandon working plans simply because they had never determined how they’d know if something was going wrong and therefore concluded that something must be going wrong no matter how much evidence they had that their plans were working!

More broadly, though, the difficulty is often a misunderstanding of what it means to plan. I’ve worked for companies that tried to plan projects out 2-3 or more years. While this is possible in a very broad sense, details matter, and you can’t plan details that far in advance. Instead, you have to plan the steps in front of you. Part of the plan is to pause periodically and review the plan. What worked? What didn’t work? What are the next steps? Developing an effective strategy is not something you do once and then execute blindly; you have to constantly adjust as circumstances change. The beginning chess player tries to play out a sequence of moves and is paralyzed when the opponent doesn’t respond as expected; the chess master has a plan and constantly adjusts his strategy in response to his opponent.  You need to plan far enough, but not too far: This may sound like it contradicts the concept of reverse goal chaining; not at all. It is simply the case that the more distal steps are going to be vague until you get close enough to see the details. Good strategy requires a certain comfort with ambiguity and the ability to periodically evaluate, adjust, and adapt any plan.

Interestingly enough, the beginning chess player usually can’t explain his plan, while the master can. The beginner’s plan sounds like, “I have a plan: I’ll do this, and this, and this, and that’s how I’ll win.” The chess master, on the other hand, is likely to treat you to a detailed discussion of his thinking processes and chess strategy. The first is easy to say and easy to listen to, but is fundamentally useless. The second is hard to articulate and takes a lot of effort to follow, but actually does have a chance of working. Part of the reason it works is that the chess master has contingencies built into his strategy: he’s already considering that his opponent might do something unexpected and is mentally prepared to handle that. The beginner, by assuming that each step simply needs to be executed in the proper sequence, is locking himself into a rigid mindset. Chess strategy or business strategy, the results are same.

Fundamentally, failure is a form of feedback. In fact, this is exactly what you want failure to be: a means of testing out different strategies and figuring out which ones work best. Used this way, failure can be very helpful. Indeed, without such productive failures learning and strategy development is impossible.

However, sometimes the cost of failure can be somewhat higher. If Billy’s goal is to cross the street safely 75% of the time, what about the other 25%? Even if we raise the expectation to 99%, that one failure can negate all the successes: getting hit by a car can ruin your whole day.

It’s all too easy to confuse the two types of failures and businesses do it all the time. They are afraid to fail when that failure would give them valuable information and they take risks that sound good but where one slip causes you to lose everything.

How do we tell the two types of failure apart?

“Author Stephen Balzac has written a terrific book that gets into the realpolitik of organizational psychology – the underlying patterns of behavior that create the all important company culture. He doesn’t stop at the surface level, explaining things we already know like ‘culture beats strategy’ – he gets into the deeper drivers and ties everything back to specific, actionable stories. I highly recommend this book for anyone who wants to participate in creating and steering company culture.”

 

Sid Probstein

Chief Technology Officer

Attivio – Active Intelligence

Goal decomposition

This is an excerpt from my new book, Organizational Psychology for Managers.

I’ve mentioned several times the concept of creating subgoals and how large goals generate a great many smaller goals. This process is known as goal decomposition. Goal decomposition is critical if we’re going to accomplish anything large or significant: a black belt in a martial art, a college degree, shipping a product, building an innovative organization, or implementing successful organizational change, are all large goals that must be broken down into pieces in order to have any reasonable chances of success.

When breaking goals down, it helps considerably to start at the end and work backward to the starting point, rather than work forward from the starting point to where you want to go. Working backward, a technique known as reverse goal chaining, does two things:

First, working backward creates implicit agreement for each step. As you define a step, it’s clear how that step moves you forward; after all, you just stepped backward to define the step! If you can’t see how to move forward from a given step, that alerts you that you’re taking too big a step. You can address that issue immediately, or at least put in a goal that when you get to point X you need to evaluate how to move to point Y. Because you are working backward, the logical progression is easier to see and there is less debate about whether that step will get you where you want to go. Instead, the implicit agreement that you’re building makes it easier to generate overall agreement to the entire goal chain; this is extremely valuable when you need to convince your team to buy in to the goals! People are more likely to listen with an open mind instead of arguing the validity of each step in the process.

Second, reverse goal chaining is a very elegant way to transform your goals into a well thought-out strategy for accomplishing those goals. Strategy is, in a very real sense, the art of looking to your end point and then reasoning backward. As you work your way backward, insetad of fighting over the validity of the step, you can instead consider how each step influences or changes the world around you and how those affected by your actions might respond. In what way might a competitor react to your actions? How can you anticipate and prevent that? A chess master builds his strategy often at an almost unconscious level, but they do work backward. They are then playing toward various board positions that they know will move them to victory. Intervening board positions are the subgoals along the way to the final board position. At the same time, the other player is seeing and responding to each move, potentially forcing the strategy to evolve and adjust. Fencers do the same thing, leading their opponents into patterns of moves so that the opponent becomes predictable. Smart businesses try to force their competitors into untenable positions as well.

As you work your goals backward, you also need to address the question of close and distant deadlines. Technically speaking, we are looking at Proximal Goals and Distal Goals.

Proximal goals are the goals that are right in front of us. Those are the goals we are doing today.

Distal goals are further off in time. Those are the goals we are working toward tomorrow.

Proximal goals build upon one another to bring us to our more distal goals. At any given moment, our proximal goals tend to be the most relevant since, after all, they have the most immediate deadlines. Sometimes, though, a proximal goal is just not that interesting or personally relevant by itself. In that case, our distal goals help remind us of the importance of those proximal goals: the proximal goal of practicing falling feeds the more distal goal of learning to throw, which feeds the goal of passing a belt test, which feeds the goal of learning the next set of techniques toward the ultimate goal of a black belt. Even a student who doesn’t much care to practice falls will still do so if they value that end point sufficiently. Because the path to the end point is broken down and visible, it’s easier to imagine achieving it.

When a business tells me that their employees have no sense of urgency, one of the first things I look at is how they’ve broken down their goals: are milestones all big and distant? Quite frequently, the problem is that the goals, and rewards, are all distal and there are no proximal goals to get people started.

Balzac combines stories of jujitsu, wheat, gorillas, and the Lord of the Rings with very practical advice and hands-on exercises aimed at anyone who cares about management, leadership, and culture.

Todd Raphael
Editor-in-Chief
ERE Media

What are process goals?

This is an excerpt from my new book, Organizational Psychology for Managers.

If outcome goals are what we want to accomplish, then process goals are how we are going to do it. Process goals reflect those elements of the goal equation that are under our control: for example, the judo player might rehearse different throwing combinations, the fencer different combinations of blade work. A business might explore different methods for improving the quality and speed of software development: for example, they might try Extreme Programming before discovering that it really doesn’t work all that well. A writer might arrange her day to have uninterrupted chunks of time in order to be able to concentrate most effectively.

Process goals are the beginnings of strategy: while outcome goals only give us feedback at the end of an activity, process goals give us feedback during the activity. Real time feedback is what permits real time course correction. Real time course correction is what enables us to discover that we should have made a left at Albuquerque before we end up in the middle of the Sahara desert.

The intent of process goals is to focus our behaviors into directions which will give us control over those aspects of our outcome goals that we can control and improve our odds in those areas that we can’t control. For example, Jesse Livermore, the legendary stock market wizard, recognized that he could not control the direction the market was going. However, he could control whether or not he was in the market, and developed rules, or process goals, which told him when to buy or sell. Executed properly, these process goals maximized his odds of turning a profit: indeed, Livermore’s profits when he covered his short positions into the Crash on Oct 29, 1929 were reputed to be on the order of $100,000,000.

In sports, when an athlete attempts a move and it doesn’t work, the athlete can switch to a different move. A business that conducts market research is doing the moral equivalent: they are testing different approaches or different product formulations and using that feedback to guide their goal-directed behavior.

Process goals are your battle plan. While it may be true that no battle plan survives contact with the enemy, having a battle plan lets you know when you’ve made contact.

Process goals can be decomposed into outcome, process, and learning goals.

Get your copy of Organizational Psychology for Managers before it sells out again.

Spotting the Gordian Knot

Fans of cycling’s Tour de France might recognize the name of Johann Bruyneel, the coach who helped Lance Armstrong  become the first man to win the Tour seven times in a row. Lance Armstrong is undoubtedly one of the best cyclists alive today. What can a coach offer him?

Simple. Lance can’t see the back of his own head. Johann can.

In other words, Johann provides external feedback. He is the person who can step back and see the big picture and provide Lance Armstrong with knowledgeable, expert feedback. That feedback, in turn, enables Lance to improve his cycling skills and consider strategies that he might never have imagined on his own. Johann’s not magic of course; as the 2010 Tour demonstrated, even Lance can be defeated by age and bad luck.

Nonetheless, the advantage of having that person showing you the back of your own head is invaluable. As part of a management training exercise, I provided participants with a variety of items and each person had to obtain various different items to accomplish their goals. As expected, the participants immediately started trading with one another.

Where events became interesting, though, was when they started to notice that no one had certain items, or at least would not admit to having them. The people who needed the “missing” items became convinced that other people were holding out on them. They then responded by actually holding out on other people, until eventually no one would trade with anyone else. Before long, the group became paralyzed; they were unable to accomplish the relatively simple task they had been given.

What made this scenario particularly intriguing, though, was that the group was so focused on its initial assumption about how to solve the problem that they were apparently incapable of considering alternatives. For example, the person who needed an apple could have obtained one from the cafeteria. The person who needed leaves from a tree could have walked outside and picked some off one of the many trees visible through the windows, and so on.

Stories of Alexander the Great tell of his being confronted with the Gordian knot, a knot so complex that it could not be untied. Alexander solved the problem by slicing it in two with his sword. When I pointed out to the participants in my exercise some of the alternative paths to solving their problems, their reaction was comparable to what I imagine was the reaction of those who saw Alexander slice the knot: stunned silence, followed by head slapping and cries of “Why didn’t I think of that?!”

To be fair, the inhabitants of ancient Telmissus probably didn’t do Homer Simpson dope slaps, but I suspect they had a very recognizable equivalent!

The key point, though, is that the people actually involved in the exercise were no more able to see the alternate solutions than Alexander’s contemporaries were capable of thinking of cutting through the knot. Confronted with a knotty problem, as it were, they locked into one approach to solving that problem. It took an outsider to consider something different.

In sports, locking into a strategy can be devastating. One top US saber fencer gained quite a reputation when he launched a series of attacks, and promptly got hit. So he did it again, and got hit. He lost the match because he couldn’t see the back of his own head: he couldn’t break out the mindset that the particular strategy he was using simply wasn’t working against that particular opponent. He was so sure that it would eventually start working that he refused to consider anything else.

In a business environment, this sort of blindness can be even more expensive. At one company, a belief about how client training should be conducted was costing the company business. They were losing engagements left and right. Their attempts to reverse the losses were focused on sales campaigns and aggressive marketing. Even though the company was filled with experts in the business, no one could see the real problem; instead, they were locked into an ineffective delivery strategy. It wasn’t until an outsider looked at what they were doing and informed them that the fundamental problem was that the training was ineffective that things changed. Quite simply, how they taught wasn’t working: clients felt that they were wasting their time and money and not learning anything. Once they understood what was actually going on, they were able to cut their particular Gordian knot and business picked up rapidly thereafter.

So how do you see the back of your own head? One way is to find someone who isn’t steeped in the assumptions of the organization, someone who will ask the “stupid” questions because they don’t know what to take for granted. Another method is to spend some time looking at what you are doing and brainstorm alternate methods of accomplishing each task. You do this whether or not the task is already completed or on going. The key is to view how you’re doing things as merely one suggested method instead of as holy writ. Best of all, of course, is to use both methods.

Once you have the perspective of the back of your own head, it’s amazing how easy it is to spot, and cut, that Gordian knot!