The Business Sensei

Mousetrap Company

As published in Corp! Magazine

Remember the classic kid’s game, Mousetrap? In this historic tribute to the legendary Rube Goldberg, players have to assemble an exceedingly convoluted and baroque mechanism that will supposedly catch a mouse. As I have young kids, I recently had a refresher course in the game. What was interesting was the debate about which part of the trap is the most important: the crank turn at the beginning? The shoe that kicks the bucket, the ball bouncing down the stairs, the diver that flies into the washtub or the trap itself falling down the pole? In the end, most of the kids decided that it must be the trap, since without that you can’t actually catch the mouse.

Listening to the debate, I had the rather disturbing experience of being reminded of a certain software company. A similar debate occurred there as well: the engineers who were supposedly designing and implementing the software were being raked over the coals because they hadn’t successfully produced a workable product by the deadline. At first glance, it was clearly their responsibility to build the product, and their failure was costly indeed to the company.

The first glance is not, however, always the most accurate one.

In the game of Mousetrap, a number of things have to happen correctly in order for that all important trap to fall. If the shoe doesn’t kick the bucket, the ball won’t go bouncing down the stairs. If the crank doesn’t turn, the gears won’t rotate and the shoe won’t move. Indeed, while a failure at any point in this wonderfully elegant mechanism will derail the whole thing, failure at the start means that it won’t even get going.

At this software company, the process for getting a release out the door was, unfortunately, even more elaborate than the mousetrap. The biggest problem, though, was the crank at the top. The company had several products, and competition for resources was fierce. What the CEO seemed to be paying attention to was what received the time and energy of the engineers. Although the CEO kept saying that this particular release was critical to the future of the company, he made no effort to organize the company around that release, nor did he delegate that task to anyone else. Thus, the assumption from the top down was that this release couldn’t really be as important as all that.

By the time engineering got involved, the engineers were focused on multiple tasks. Without any direction from above, they took their best guess on which direction to go. Being engineers, that meant that they pursued the interesting technical problems, not the serious business priorities: when not given direction, most people will do the thing they are best at doing, whether or not that is the thing that really needs to be done at that moment.

When it came time to ship the product, the best that could be said about it was that it didn’t crash too often. The customer was not pleased.

What happened here was that there was no logical flow of control or means of prioritizing tasks. Superficially, an unhappy customer was the fault of the engineers; certainly, they took the blame. However, was that really accurate? The engineering team did their job as best they could with the information they had available. The real failure was in the leadership: when no one is leading, people follow the path of least resistance. That may not get you where you want to go. Although the failure did not manifest until the very end, the seeds of that failure were sown long before the engineers ever started working on that particular product.

Fundamentally, it is the job of the leader to set the direction for the company and keep people moving in the right direction.

It is the job of the leader to build the team so that the employees will follow him in that direction. It is the job of the leader to build up his management team so that he does not become the bottleneck.  It is the job of the leader to make sure that the technical problems and the business problems are in alignment and that the biggest contracts are the ones that get priority. This seems obvious, but for something obvious, it certainly fails to happen in far too many situations.

In this particular situation, the company’s mousetrap didn’t work very well. The trap didn’t fall. The rod didn’t move. The diver didn’t dive. The crank might have turned, but it didn’t turn particularly well. Indeed, the company really only got one part of the mousetrap process to work well.

They did manage to kick the bucket.

Stephen Balzac is a consultant and professional speaker. He is president of 7 Steps Ahead (www.7stepsahead.com), an organizational development firm focused on helping businesses to increase revenue and build their client base. Steve is a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play,” and the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill. Contact him at steve@7stepsahead.com.

When the CEO Meets Frankenstein

As published in Corp! Magazine

Horror movies follow some fairly predictable tropes: the monster slowly awakens; someone sees it happening, but no one really believes him. As the story unfolds, people go to investigate and are captured, killed, driven mad and so forth. There’s always something terrible going on, and there’s always some helpless innocent caught up in it, acting the way helpless innocents generally act.

Of course, when the helpless innocent doesn’t act as expected, well, that can cause the whole story to change. The classic comedy, “Abbott and Costello Meet Frankenstein,” is a traditional period horror film, complete with the legendary Bela Lugosi, in which the helpless innocents are Bud Abbott and Lou Costello, acting like, well, Bud Abbott and Lou Costello. This, of course, causes the plot to go flying off the rails, at least as far as Count Dracula’s dastardly plot to reawaken Frankenstein’s monster is concerned.

The key element of a horror film is that our helpless innocents are put into a situation in which they have no idea what to do. As in most situations, when we don’t know what to do, we do what we know how to do. Indeed, successful horror relies on that phenomenon: the terror comes from seeing how our ordinary actions lead deeper and deeper into trouble. Alternately, if those ordinary actions are slightly askew, the horror becomes comedy. In that case, the humor comes from seeing Abbott and Costello responding to a deepening horror by doing what they normally do.

The movie works because the tendency to do what we know how to do is both powerful and universal. Most people, confronted by novel situations, react that way. When there is truly nothing they can do, they attempt to exert control anyway by doing something that they can do. The results are often comedy or horror, depending on perspective and circumstance.

At one nonprofit, the founder of the organization was a man who had started out working in a stockroom. When the organization hit a financial crisis, he fixated on doing inventory. There was simply nothing useful he could do. Rather than feel helpless, he did the thing he could do. This made his board very happy as it kept him busy while they raised money for the organization.

At a high-tech company, a product deadline was threatened by a vendor not delivering a critical software component on schedule. There was nothing that could be done: the entire product was designed around that deliverable. The department head responded to the situation by demanding his employees work long hours, before the vendor delivered. After it was delivered might have made some sense, as the company would need to make up the lost time, but before? The department head had no control over the vendor, so he dealt with the situation by controlling the people around him.

Comedy and horror might be quite enjoyable when viewed from a safe distance, like a movie screen, but are much less fun to be in the middle of. How, though, does a leader avoid having her actions turn the situation into a comedy of errors or frustrating, painful experience for her employees?

The key is to practice dealing with chaos. Consider successful athletes: they learn all the moves and drills of their particular sport. Then they practice by competing against other athletes in order to become comfortable with the unexpected actions of their opponents. Indeed, Judo competition is referred to as “randori,” or “seizing chaos.” Because it’s not possible to predict what strategies people will employ or control what an opponent does, the successful athlete learns to adapt to the situation. Rather than becoming stuck on one response, they become adept at switching strategies to counter their opponents.

Successful leaders need to develop the same skill. It’s not enough to just know the theory of leadership; you also must practice in a chaotic or ambiguous scenario. Sadly, for many leaders, that means practicing on the job. As most athletes learn the hard way if they move straight from drilling to competition, getting used to chaos takes its own practice.

Fortunately, just as athletes have multiple training tools at their disposal to learn to deal with chaos before they enter competition; tools are available for business leaders as well. Predictive scenarios, a type of live action serious game, provide the sort of detailed, ambiguous situations that enable a leader to become comfortable with chaos. Unlike traditional leadership training exercises, there is no one, right answer. Participants need to motivate others, win deals, provide feedback, and execute strategies in a constantly shifting environment. Rather than just talking about leadership, participants need to display leadership and do it well enough to convince others to follow them.

Like the athlete, the leader becomes adept at switching strategies and at managing unpredictable situations. Rather than being trapped by doing what they can, they become able to apply what they know. Instead of comedy or horror, they achieve success. Now, that is something you do want to be in the middle of!

Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead (www.7stepsahead.com), an organizational development firm focused on helping businesses to increase revenue and build their client base. Steve is the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill and a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play.” Contact him at steve@7stepsahead.com.

Blood in the Streets

Baron Rothchild, the famous investor, is credited with the saying, “Buy when there’s blood in the streets, even if the blood is your own.”

The good Baron had a point. The stock market often starts to rally exactly when the economy appears to auditioning for a part in “A Series of Unfortunate Events.”

I’ve heard several CEOs say that they can’t possibly be expected to grow their businesses in today’s economic climate: they don’t know what their health care costs will be, they don’t know how the economy is doing, they don’t know what the labor market will be like in a year, and so forth.

In other words, there’s blood in the streets and some of it is their own.

While I appreciate their concerns, let’s get real: retail stocks are up, tech stocks are up, restaurant stocks are up, and so on. More companies are trouncing earnings estimates than are missing them. In other words, those CEOs who are ignoring the blood in the streets and aggressively running their companies are seeing results.

Part of the problem today is that the 1990s were relatively easy. You didn’t have to be a very good leader to do well. Indeed, you had to be a pretty poor leader to not do well. Today, though, is very different. This is simply not as fertile an economic environment. If you want to lead effectively, you have to know what you’re doing.You also need to have confidence in yourself and in your team: if you don’t, you won’t be able to move forward. Trust comes from confidence, and without trust it’s impossible to depend on others. One might also argue that confidence comes from trust, which is somewhat true: they build upon one another.

If you don’t have confidence and trust, what’s left? The same thing that keeps many would-be investors (including some so-called professionals) from buying when there’s blood in the streets: fear.

The problem with fear is that it makes sitting and doing nothing seem so rational. It’s always easier to not buy stocks when the market looks bad. Perhaps if you wait, it’ll be more clear. Of course, you might also miss some major opportunities. There’s a reason Baron Rothchild was so successful when so many of those around him were not… By the same token, it’s always easier to blame someone else for your decision to not take action.

If you are unwilling to move, whether it’s because you blame the government or Zeus or little pink bunny rabbits hiding inside your computer, recognize that the solution is to take action. Make your company stronger. Build your team. If you don’t have all the skills you need, find someone who does and get them on board.

Because when the blood’s all been cleaned up and the streets are pristine, the party is over.

I Don’t Believe It!

Recently, I was running a leadership and negotiation exercise, which involved participants attempting to determine who they could and could not trust. The exercise required that participants work with one another and included various techniques for verifying the truth or falsehood of someone’s claims.

The dynamic between two of the participants, we’ll call them Fred and Barney, became extremely interesting: Fred needed Barney’s help, but Fred was convinced that Barney was lying to him and looking for a way to double-cross him on a business deal. Barney, meanwhile, was going to great lengths to prove that he was telling the truth and dealing in good faith. The more evidence Fred found that demonstrated Barney was telling the truth, the more Fred was sure he was lying. Not only was Fred not convinced, he even came up to me and complained that he thought that Barney was violating the rules of the exercise because he was clearly lying. When the exercise was over and I debriefed the participants, Fred was stunned when he found out that Barney was telling the truth all along.

Part of the value of this particular exercise is that behavior in the exercise tends to correlate well with behavior in the office. Unlike the exercise, however, in real life we don’t have any magical means of verifying the truth. Of course, as we can see, even that doesn’t necessarily matter. Once an opinion is formed, sometimes nothing will change it. That may be fine in some obscure situations, but in business it can get you in trouble.

Read the rest at Corp! Magazine

Hire Slow And Fire… Slower?

How often have you heard someone from a company say, “We hire slow and fire fast?”

I’ve heard this line so often that it sounds sort of a like a mantra or one of those wise sayings that are taken for granted but are generally wrong: “I invest for the long term,” or “There is no room for emotions in the work place,” or “The Red Sox will never win.”

This is not to say that it’s always wrong to “hire slow.” However, it’s important to understand the different ways that a company can hire slow. Some of them make more sense than others. What, fundamentally, does it mean to hire slow? For that matter, what does it mean to “fire fast?”

Read the rest at the Journal of Corporate Recruiting Leadership

Read the first chapter of my book (via Amazon Kindle for the Web)

The Peter Principle of the thing

Okay, the Peter Principle, that each person in an organization is promoted to their level of incompetence, is legendary. Since it was first advanced by Lawrence J. Peter in the 1960s, it’s been one of those things that is spoken about amusingly but with a certain element of “yeah, right.” (which is, I believe, the only example of a double-positive making a negative, but I digress.)

Well, if you’ve ever wondered if the Peter Principle works, it turns out that it does. This year’s management Ignoble Prize went to The Peter Principle: A Computational Study. The researchers found that not only does it work, it’s potentially unavoidable if ones duties following a promotion are essentially unrelated to ones duties before the promotion. In other words, the skills of an engineering manager are not identical to those of an engineer. Being a good salesmanager is not the same as being a good salesman, and so on. The study went on to state that organizations could improve their efficiency by promoting randomly the most and least competent performers!

Looking at this study, I’m struck by the basic assumption underlying it: the principle works if the duties as you move up are substantially different from what they were at the “lower” level. Unfortunately, this is a pretty valid assumption. There is a cultural belief in most businesses that management is “higher” on the corporate ladder than being an individual contributor. As a result, if you really want to increase your salary and status in the company, you need to keep climbing. Unfortunately, this means that there’s a very good chance that eventually you’ll reach the point that you can’t do the job well anymore, and hence you’ll be stuck in a job that doesn’t fit your skills and talents.

It’s a very perverse incentive!

It occurs to me that instead of insisting on the ladder or believing that doing well at job X means that you’ll do well at job(not x), perhaps a better approach might be to give people the opportunity to try out a new job. Providing some sort of training for the new job is also a good idea. It’s rather disturbing how often people are “promoted” into management and then given no training on what to do. In a perfect example of the Peter Principle, they are taken out of the job that they excel in and for which they probably trained for many years, and put into a job for which they have no training and possibly no talent. The former, at least, can be fixed.

Of course, even when there is management training, it has to be done right. The occasional one-off, soon forgotten until the next year, is hardly sufficient. Consider how much training it probably took for the person to be successful in their previous job! Management training needs to be focused, given the reality of time constraints that exist in most businesses, and it also needs followup. Waiting a year until the next training won’t do it!

It takes a lot of effort to avoid the Peter Principle. I suspect that many businesses are figuring they can’t afford to do anything about it. My question is, can they afford not to?

Between Two Points

My first jujitsu sensei liked to frequently remind us that if you wanted to go from San Francisco to LA, you didn’t go by way of Portland, Oregon. Naturally, the wise-guys in the class, which included me, would make cracks about the airline schedules. I don’t know if there actually were flights that went from San Francisco to LA via Portland, but it wouldn’t surprise me in the slightest!

Of course, the point my sensei was trying to make was that a straight line is the shortest distance between two points. While this is certainly true in normal mathematics, fans of “A Wrinkle in Time,” might recall that a tesseract is the shortest distance between two points. While traveling via tesseract is purely science fiction, the fact remains that sometimes the direct route, that is, the straight line, is not the most rapid means of getting to your destination. Sometimes, you’re better off with a metaphorical tesseract. This is true in business and, as it happens, also in jujitsu (although that’s a separate topic). As a case in point, let’s look at the increasingly popular Results Oriented Work Environments (ROWE).

Read the rest at Corp! Magazine

Being Fred Flintstone

Remember the classic kid’s TV show, the Flintstones? Fred and Wilma Flintstone are a stone age couple who live in something that looks oddly like the 1950s with rocks. Lots and lots of rocks. Despite this, the show had nothing to do with either rock music or getting stoned. It did, however, have an episode which predicted that the Beatles were a passing fad. So much for prognostication! Fortunately, that episode is not the point of this article.

In one episode, Fred complains to Wilma that he can’t understand what she does all day. How hard can it be to take care of a house? Of course, as Fred swiftly learns, after he and Wilma make a bet, the answer is very hard. Fred, of course, makes a total mess of the whole thing. Now, obviously, the cartoon was playing off of social issues of the time and was intended to make people laugh. The obvious lesson, that a “non-working mother” is a contradiction in terms, is hopefully one that most people have figured out by now. The less obvious lesson is the much more interesting one: it is often impossible to gauge from the results, or from watching someone work, just how difficult a job actually is or even how hard they are working! Conversely, how people feel about the results has little bearing on how hard you worked to get them.

Read the rest at the CEO Refresher

Business Lessons From the Avengers (pt 1)

I have a fondness for old time radio podcasts. Indeed, one of the big advantages of the iPod is that it created a whole slew of opportunities for those of us who want to listen to such things. One of my discoveries was a podcast of the Avengers radio show. Yes, there was one, although it didn’t really come from the Golden Age of radio, rather being adapted from the TV show. Nonetheless, listening to episodes of the Avengers pointed up four very important points:

1. Russian accents are only the second most villainous sounding accents. British accents are the most villainous, probably because they always sound like they have anti-social personality disorder.

2. British accents also sound heroic, at least when they aren’t the villains.

3. Old time commercials in a British accent sound like something out of Monty Python.

4. When word “helpless” is said immediately before “Emma Peel” you know someone is in for a very nasty surprise.

I’m not entirely sure what this means, although the first might reflect my image of Boris Badenov as the quintessential Russian villain. Since this year is the 50^th anniversary of Rocky and Bullwinkle, perhaps Russian accented villains will make a comeback. I’ll leave that to James Bond (or Moose and Squirrel). What is more interesting is how well a 1960s cold-war espionage show holds up half a century later. Despite all our changes in technology and politics, and the much touted generational shift in the workplace, it should come as no big surprise that human nature hasn’t changed at all: people are still, basically, people, and John Steed and Emma Peel are just as suave and sophisticated today as they were fifty years ago. Despite all the noise about Boomers, Gen X, and Gen Y, there are also some things about the workplace that simply haven’t changed, although our perception and understanding of them might have.

In my book, “The 36-Hour Course in Organizational Development,” I discuss the twelve key elements of building a successful business. These elements are, in many ways, as timeless as John Steed and Mrs. Peel, if not always quite so sexy. They are, however, the key points that any entrepreneur needs to work with if you want to maximize your chances of creating a successful business.

Read the rest at Under30CEO