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Risk is an unnecessary (p)art of the deal

Mon, 08 Mar 2010 18:35:00 +0100

To identify where risk is a real part of the investment deal you will commonly hear an equity firm or VC partner claim, we invest in the people. When it comes to costs, human capital usually represents nearly 70% of all operating costs, but most investment firms focus investment decisions and deal valuation no on quantifying the people or human risk, but on quantifying:

market growth,
market size,
the expected rate of return, and,
the expected risk

The decision to invest becomes a decision to assume the correct amount of risk for the projected payoff. However, the overwhelming valuations of risk remain deeply flawed.

Investment deals that fail or under-perform are often attributed to 1) misjudging the marketplace risk for the products or 2) problems with the management of the investee business. If management proved they were unable to cope with market place change, the 2 issues directly relate.

Venture capitalists fail to achieve an accurate human capital valuation in 57% of the deals.*

There is no accurate risk assessment without an accurate assessment of human capital. Critically flawed ventures have at least 1 criterion concerning the personality or experience of the leader and the team.

Some firms do, ultimately, rely on the quality of entrepreneur to determine their funding decision, but rarely in a measurable, comparable assessment. Human capital is the only asset that is not tangibly owned, but the risk is tangible:

Compliance – Financial or reputational damage to the organization due to failures to meet legal or regulatory requirements;
Productivity – Loss of productivity or output due to under-skilled or under-motivated employees; or an organizational culture that does not encourage discretionary effort (the extra contribution over and above what is required to keep the boss off your back) from employees; and
Growth – Failing to maximize organizational capability or to identify and achieve internal or external opportunities for innovation or major growth or development of the business**

In many evaluations there is a disproportionately low human capital risk assessment compared to financial, market, and legal due diligence. Too often the human capital due diligence focuses on industry experience, work history, and academic education, which has little positive correlation to successful ventures.

Relying on observation or documents, reports, stories, and conversations are not quantifiable, non-relatable, and subjective as a true human capital assessment. Technical skill does not mitigate risk.

Only quantitative approaches provide comparative analysis. Human capital quantitative results are not an IQ measure. Various studies estimate IQ accounts as little as 4% to 10% to someone's professional success. An IQ score does not infer job success or mitigate risk.

Research in over 200 organizations worldwide revealed the difference between top performers to average performers finds only 33% of the performance is attributable to cognitive (IQ) and technical ability and 66% to human capital competency.

How can you have an accurate measure of risk without an accurate measure of behavioral competency. Why would or should someone trust their money is wisely invested when so much of the risk comes down to a bet on a leader and a team to deliver?

*Source: "Management Assessment Methods in Venture Capital: Towards a Theory of Human Capital Valuation" Geoffrey H. Smart, Claremont Graduate University
**Source: Managing Risk: The Human Resources Contribution

www.amajorc.com blog.amajorc.com

Googled again: cost of culture is innovation

Fri, 05 Mar 2010 13:29:26 +0100

What, really, is the cost of culture? Is culture tangible to business bottom line or is culture an intangible behavioral science term only useful for dissertations?

Culture, innovation, values, diversity, opinion. Related? Perhaps to each other, but related to the bottom line?

I read a recent blog on Fistful of Talent had me revisit diversity's important to innovation. Here's an excerpt from that blog "Looking for Diversity? Look for a Difference of Opinion Not Value":

Today's market place moves quickly. Almost too quickly. Making a living, making a profit requires individuals and companies to think fast and adjust course with cheetah-like speed. Innovation is the "new normal." (I just needed to throw in the newest overused phrase to feel like a business hipster.)
Innovation is a function of diversity. Innovation almost always comes from an amalgam of ideas that create something new and different. In other words, you need people in your company that think differently than you.
But you don't want people who ARE different from you.
Opinion VS Values
Opinions are beliefs and judgments not based on certainty; held with confidence but without proof. Opinions are the raw materials of innovation. Opinions are what lead us down the path to proofs which lead to facts. Different opinions are required for innovation. Values are beliefs in which we have an emotional investment. Values are consistent. Values are the foundational blocks on which we act. Values define us. Opinions can change. Values usually don't. Something huge has to happen to realign values, but the introduction of a new fact can change an opinion.
Why spend so much time on definitions of the terms opinion and values? Simple. Hire for differences of opinion not differences in value.
Too often we seek to introduce "new blood" into an organization to help us up the innovation quotient. Good plan. We want and need people with different points of view. Different opinions. That's good. But don't confuse a difference in value for a difference in opinion.
Similar values are required for a strong, ongoing organization.
Different opinions are required for innovation
Very different.
Why Do You Have That Opinion?
Often in our hurry to inject diversity, we listen for people who have different ideas than ours - different opinions. But we gloss over the foundation for those opinions. Are their beliefs based on available information and some mental extrapolation leading to that opinion? Or are they driven from a different set of values? Are they "emotionally invested" in that point of view? Could you sway their opinion in the interview? If not - it's probably a values issue and you want to be sure their values and the company's line up.
Ask the questions that dig deep into the reason people hold their opinion. Find out if they have different values - or if they just have a different opinion.
Similarity in values - differences in opinion. That's what you really want
But this is just my opinion.

Source: Fistful of Talent

I like the Paul Herbert, the author, making the clear distinction of opinion vs. values.

I had a two posts called that strike a similar chord diversity = innovation.

From Diversity facade, part 1:

While qualitative diversity or quota-driven diversity goals too often compel organization's diversity missions, I wonder the benefit gained when there is no environment to contribute divergent thoughts? Diversity training should focus less on acculturating people to accept the qualitative diversity aspects of others, but instead encourage the acceptance to cognitively, diverse contributions. An environment that encourages and supports a variety of perspectives, that truly celebrates uniqueness of thought, will assure robust thinking. It is this thinking, this cognitive diversity, that teams and organizations can maximize to increase profits.

In the absence of cognitive diversity an environment of groupthink and consensus forces conformity and manufactured consent. Not only is groupthink uncreative, groupthink in a knowledge economy is dangerous to your organization's health. If your organization is to survive and prosper your continuing challenge is to overcome groupthink.

Only in an environment where unique thought is valued and protected does diversity exist. Therefore an organization’s greatest challenge is to create an environment where thought is appreciated, not where push back is judged negatively, but where push back builds a better dialogue to contribute to a better conversation.

From Diversity facade, part 2: diversity hijacked

When all can contribute thoughts, skills, and abilities, the entire social network benefits. Diversity is the opportunity to contribute a view and share your perspective. When an employee expects a fair opportunity to stand on their own merit, the only barrier to their advancement is their motivation. When all have comfort to contribute then motivation becomes the core work culture and inertia of sustained excellence.

Diversity does not keep an organization out of public relations or legal trouble. Diversity provides opportunity. Diversity impacts an organization through opportunity, not fear. Political correctness is the enemy of diversity.

Does your organization enforce diversity or celebrate diversity?

Is your diversity initiative a political correctness campaign in disguise?

Let's revisit the candidate interview that seeks to match culture, are we really trying to identify values? If so, let's use the proper term and make sure we update our HR strategy accordingly.

My prior post looked at the return on human capital innovation and I recommended the book "Googled: The End of the World As We Know It" for perspective on the power of culture.

For a polar opposite view on diversity, innovation, and culture [as well as a doozy-of-follow-up-book to "Googled"] I recommend "Crash Course: The American Automobile Industry's Road from Glory to Disaster" as a cautionary tale of an entire U.S. industry that sprang up around innovation, but within decades became crippled by success.

Innovation is an intangible asset. Though it can not be itemized or added to a balance sheet, innovation can be tangibly destroyed by group-think and by shunning diversity. "Crash Course" is brilliant book, and a sobering case, on how a lack of diversity and opinion in an entire industry culture can negatively affects on innovation, relevance, and survival.

In a future post I will draw a parallel between the automobile industry to the record industry.

2 more diversity-related articles of that merit that you consider a diversity strategy to drive innovation:

www.amajorc.com blog.amajorc.com

Googled: the cost of culture

Tue, 16 Feb 2010 12:20:47 +0100

What does culture really costs a company? Is it worth investing in culture or passively letting culture form, also known as luck-based leadership? What is the cost of culture, in profit or loss?

I found this one company a great example.

Maternity leave: 5 months full salary
Paternity leave: 7 weeks full salary
     Plus new moms and dads are able to expense up to $500 for take-out meals during the first four weeks that they are home with their new baby.

Free meals, free snacks, free physicians (on site), free medical care (on site), massage (on site), gyms (on site), trainers (on site).

On-site hair cutting, car wash, oil change, day care, dog care, and dental care.

And what does this cost? Well, the percentage of revenue these perks cost the company each year starting in 2005 are as follows:

2005 1.15%
2006    0.66%
2007    0.42%
2008    0.32%
2009    0.30%

Adding more benefits, assuming more costs, not cutting costs? Well, what did this do to their revenue growth? From 2001 the company I'm talking about grew revenues 28,517.27% by 2009 and from 2001 grew net profits 94,302.90% by 2009.

Further, the company gives people the freedom to take 1 day a week, 20% of their time, to dedicate themselves to projects they feel passionate about.

Though cutting many fringe office expense and cutting staff might halt short-term costs, what does it cost the culture and the motivation of those lucky enough to remain. Clearly, from this one example adding and expanding costs. If you rely on people, and that should not be open for debate, then the culture you build becomes the culture that motivates.

Showing up to work and getting paid does not infer innovation, collaboration, communication, and output.

Hearkening back to Herzberg's motivation theories of:

achievement,
recognition,
the work itself,
responsibility,
advancement, and growth fuel motivation.

What has this company done to enable these?

Now layer Maslow's hierarchy of needs on top of Herzberg and looking above basic physiological needs and safety and security needs let's look at how the company enables the following:

love and belonging -- friendship, family, intimacy, sense of connection;
self-esteem -- confidence, achievement, respect of others, the need to be a unique individual;
self-actualization -- morality, creativity, spontaneity, acceptance, experience purpose, meaning and inner potential

Investing in not just cutting human capital can be highly profitable and that's the real cost of investing in culture.

To find out more about this company, just Google...Google

www.amajorc.com blog.amajorc.com

The cost of culture, a 50% turnover of the Fortune 500

Fri, 05 Feb 2010 14:27:21 +0100

What is the cost of culture? Why is it even worth identifying corporate culture? Let's start with what is culture. Culture is the values, norms, assumptions, expectations, and definitions that characterize organizations or affectionately known as: how things are done around here

Culture is often a holdover from the founder(s) actions; sometimes developed consciously by management teams who decide to improve their company’s performance in systemic ways; and sometimes, in the absence of direction, a culture is adopted as a way to manage the mismanagement.

Organizations have cultures and can be defined as 1) sociological: where culture emerges from collective behavior, and organizations are cultures or 2) anthropological: culture resides in individual interpretation.

Sustained success has less to do with market forces than company values; less to do with competitive position than personal beliefs; less to do with resource advantages than vision. Sustained success has to do with managing culture. Organization change without an awareness of what drives the organization's culture may be the reason close to 90% of all projects fail.

CSC, a consulting firm that invented the term reengineering, probably the most common approach to enhance organization performance, surveyed more than 1,700 companies from both the United States and Europe and found:

69% of the U.S. firms and 75% of the European firms had tried at least one reengineering project;
85% of those firms reported little to no gain from their effort; and
less than 50% achieved their primary goal: to increase market share

The effort to improve organization performance usually fails because an organization's culture remains the same because too often the change is at odds with the culture. When change is at odds with culture, culture will always win. If you can't change the hearts and minds--the values, ways of thinking approaches to problems, management styles, motivations--the culture then soon adopts resistance to change as a coping mechanism and default way forward.

If change was as easy as a directive, then the companies that made 1999's Fortune 500 list would not need to say goodbye to 238 of their peers a mere 10 years later, a change of almost 50% from the 1999 Fortune 500 to the 2009 Fortune 500.

Change never succeeds on prescription, but will succeed with diagnostic inquiry. Just as the best doctors ask about the entire well-being of the patient, lasting change has to begin with well-crafted inquiry.

Let's look at how important culture is, not just for change, but for how you currently operate, try this perspective in a different light:

Ethics: the dominant characteristics of the organization
Risk: the explicit values foundational for decisions and actions
Trust: the dominant work environment
Accountability: the unwritten performance expectations
Integrity: specific behaviors that are valued
Alignment: leaders who walk the walk and who talk the talk
Rewards: criteria of success people are evaluated by

For more on my preferred approach to change and organization culture I invite you to look at through some other:

I welcome your communication on how to inquire, diagnose, design, and manage change for the impact you intend, not the outcome that is, unfortunately, most likely.

www.amajorc.com blog.amajorc.com

The cost of human capital is emotional intelligence

Mon, 01 Feb 2010 20:41:53 +0100

Emotional Intelligence is a capacity to recognize how our own emotions motivate ourselves and the awareness of our emotions on others. Still a little to warm and fuzzy? What about a 30% increase in bottom line performance?

Emotional Intelligence is vital to maximize any return on human capital. Why does this matter? The happier your people are, and you can't claim happiness without clarity and consistency from your leaders, teams, and organization culture, research shows an increase bottom line performance measures by 30%. 30%!

Think about the worst boss you've had. What did this person do that ranks them the worst? How motivated were you to give your best and strive to meet their goals?

Bad boss in your career? If you haven't had one you are in a happy minority because, a Gallup poll of more 1 million employed U.S. workers concluded that a bad boss or supervisor is the Number 1 reason people quit their jobs [when career advancement, work environment, pay, and lack of fit are viewed individually, or collectively, the direct influence of their boss or manager].

You might say, who cares if a boss works his people hard or you don't have to like me, I pay you to produce.

Paid to produce? Well if your are bottom-line inclined, then how do these numbers sit with you?

Poorly managed work groups are on average 44% less profitable than well-managed groups*
Poorly managed work groups are on average 50% less productive*
70 to 80% of people say they quit their jobs because of a bad boss**

Imagine, further, the real cost of replacing employees as a breakdown of:

lost team productivity missing a full time equivalent;
lost productivity interviewing;
cost of on-boarding;

Then speculate the break even return of the time and the salary for that person to contribute to the organization and a team.

EI framework reveals how we draw on different competencies, depending on strengths, preferences, and the needs of people and situations we work with.

One EI assessment*** I highly value collects behavioral traits around 4 clusters through a 360 degree survey that, in turn, are made up of competencies:

Self-Awareness: recognizing and understanding our own emotions
- Emotional Self-Awareness
Self-Management: recognizing and understanding the emotions of others
- Achievement Orientation
- Adaptability
- Emotional Self-Control
- Positive Outlook
Social Awareness: effectively managing our own emotions
- Empathy
- Organizational Awareness
Relationship Management: applying emotional understanding in our dealings with others
- Conflict Management
- Coach and Mentor
- Influence
- Inspirational Leadership
- Teamwork

Relationship management is where emotional and social intelligence manifests most visibly. For obvious reasons your ability to identify and understand relationships is vital for motivation and teams. However the lever of someone's emotional intelligence is directly dependent on self-awareness.

EI reveals how intentions are perceived by others and impacts others. It is a behavior-based assessment. It provides a reality check on how intentions really come across no matter someone's IQ or technical brilliance, if they don't get along and don't motivate others, what is the cost of their emotional intelligence?

It's a great coaching tool and a great framework for changing intentions and realizing aspirations - individually and at the organization level.

I'd love to talk about how emotional intelligence, and this tool, could build great capability for the people you manage, the people you motivate, and the organizations that rely on managing how our emotions, our relations, our social acuity, and ourselves provide the real organizational competitive advantage.

There is no shortcut, but the return on investment is a real opportunity cost for your project, for your department, for your company, for your portfolio of companies, and for your assets under management. There, does that make it real enough?

Contact me to find out how to implement an Emotional and Social Competency Inventory to help your organization and leaders cultivate excellence and steps to build manager, teams, and organization strength. Perhaps 30% quicker product release, 30% top line growth, 30% less turnover costs, 30% less project delays...

*Gallup "Turning Around Employee Turnover"
**Terry Bacon, president of Lore International Institute
***Hay Acquisition Company 1, Inc.

www.amajorc.com blog.amajorc.com

4 tips to use Twitter for project management

Thu, 04 Feb 2010 19:56:48 +0100

In my last post I presented a case to manage your projects as a business portfolio. The ability to deliver projects on time, on budget, and within scope directly impacts your organization's ability to compete and stay alive and project failure is an organization-wide risk.

In this post I want to introduce Twitter to manage projects. Why Twitter? Twitter is a great communication and community collaboration tool and once a project starts, 90% of a project manager's job is communication. Project communication and coordination is vital to project success and important:

keeping the stakeholders informed;
managing project scope;
identifying risk;
coordinating teams;
ensuring milestone schedules;
managing work stream progress; and
coordinating resource needs

Imagine 90% of your role communicating? How's your day look now? Any room in your calendar to increase your communicating even more? I can't imagine the amount of email that hits your inbox that requires you to read, decide "what's this got to do with me", create acceptable options, and then fire off your email. Think your project sponsors and stakeholders are looking for even more communication in their lives? I'm sure your sponsor or boss does not appreciate an email you forward without an explanation or concrete options you suggest to try. Lack of value added communication creates little confidence in your boss that you have things under control and, that you respect their time or that you are even worth the gobs of money you are paid to make decisions.

Think you'll get a lot enthusiasm calling more meetings? Having more conference calls? more emails? or setting your project and users up with shared sites like Basecamp? Well, good luck to you.

We need to communicate to manage expectation and results. There is nothing more damaging to your reputation then a project delivered to a sponsor who says, "You should have added this" or "this is really not what I expect" [look for my upcoming eBook on scope management].

What's a project manager to do? As a project manager your job is on the line, your organization's resources are on the line, and your competition is only too happy when you can't deliver on time, on budget, or with the features promised.

Here's your answer, use Twitter and micro blogging to manage project communication and collaboration. What I love about Twitter and, microblogging is easily summed up: you have 140 characters to get your point across. With Twitter being succinct is a requirement and it is sure easier to read through a Tweet timeline than deciphering emails.

You have an obligation to communicate, but with Twitter you now have an opportunity to communicate more efficiently, more effectively. 4 reasons to use Twitter for project management:

Concise messages
Topics filtered by keyword (more on this below)
Link to documents or websites
Track communications by user and using a time stamp

There are a couple of services to set up a private group for sensitive information and to provide Twitter access that you, as the project manager, can administrate. Here are 3 steps to start managing projects with Twitter (hyperlinks provide more information on each):

Create a Twitter account for your private group and have your team create Twitter accounts or assign Twitter accounts with privacy features for your project team;
To add private message and group management functionality choose either of these current Twitter add ons:
- Tweetworks,
- GroupTweet,
- TweetKnot, or
- Twitter4Groups
You can also get Twitter-like microblogging services if you, your sponsor, or your team insist on even more privacy with one of these services:
- Yammer,
- Twhirl,
- indenti.ca
- s tatus.net, or
- Twingr
Create a bit.ly account to shorten file names and hyperlinks as well as track when your files are clicked on and how many people clicked on your file (ever wonder if your customer really said he did not get your attachment? If you use bit.ly you'll at least see if he opened it).

Here's a quick tip list on how your can use Twitter to manage project communication (hyperlinks provide more information on each):

Use hashtags on your Tweets to code the Tweets within any number of areas for sorting and redirecting, try these hashtags examples: #risk, #change, #schedule, #scope. #resource. #budget
For example: See if your team has any new risk items by doing a #risk search
Send a direct, and private, message to people using the "d username". As an added bonus a direct message will also send an email to that person.
For example: to send a direct message to my Twitter account type "d telwin" then your message and I will get a private message that will not appear in the Twitter timeline.
Use your bit.ly account to shorten hyperlink addresses to files that use Google Docs, Windows Office Live, or Zoho or hyperlinks that are located on your company portal
Use the Twitter RSS feed to stream your group Twitter feed into your RSS feed into a project collaboration portal like 37signals' Basecamp

I also wanted to recommend a couple of sources on the archive and search capability you can use with Twitter for your Tweets, project-related or otherwise:

3 ways to Archive Your Tweets offers a way to backup your Tweets and 2 other tips;
Collecting, Sorting, and Archiving Your Tweets includes a great tip to download and archive to an Excel Spreadsheet; and
10 Ways to Archive Your Tweets includes a tip to integrate your Tweet history with your Google calendar in their list of alternatives

How are you managing project communication?

Do you have any tips or other social media tools you use to manage project communication in the age of saturation? I welcome your thoughts.

Contact me if you would like to discover how to turn project management into your organization's competitive advantage.

Other sources:

Twitter, public vs protected (private) accounts
Get even more Twitter savvy with the excellent resources over at Social Media marketing mavens HubSpot; and their Twitter recommendations for marketing and sales; and
download their eBook "How to Use Twitter for Business, A Beginner's Guide"

www.amajorc.com blog.amajorc.com

Why your business strategy is a project portfolio

Wed, 13 Jan 2010 20:00:19 +0100

It starts with an executive need: a new market evaluation; improve operating margins; a game-changing technology; your competition is eating your lunch. Whatever the reason, a project is how an organization translates an executive strategy.

The ability to scope and deliver a project is a competitive advantage. The best organizations realize project management capability as a strategic differentiator, the lagging organizations only staff project management skills within Information Technology departments.

What is a project:

a project has a definitive beginning and end;
a project is a temporary effort, specifically to create a unique product, service, or result;
a project is not part of business operations, but can develop capability and become part of operations

Note:
Do not confuse temporary with short duration and do not confuse temporary as something that does not, ultimately, becoming operational once the project is stabilized or delivered i.e. a new facility or new production technique or Google Wave

I have come to rely on using the term portfolio planning to describe the translation of strategy to a group of project options an organization can undertake. By using a portfolio view, projects are prioritized using the same risk and return criteria capital expenditures and other financial or strategic commitments are evaluated.

C-level business executives fully understand financial risk and when I link a portfolio of projects as organization risk then projects take their place as business drivers and begin to reveal that the capability to deliver projects is an organization risk.

Organizational planning impacts the projects by means of project prioritization based on risk, funding, and the organization's strategic plan. Organizational planning can direct funding and support...on the basis of risk categories, specific lines of business, or general types of project *

The ability to scope, plan, and deliver a project on time, on budget, and up to expectation is the business differentiator today. Yet, project management as a profession and as a business enabler has little traction outside IT and within IT has little success -- the 2 mutually reinforce misunderstanding and misguided notions of the competitive advantage project management is.

While I worked at Deloitte Consulting and Booz Allen Hamilton they both had a competitive objective to get as many consultants project management certified. This was their strategic go-to-market differentiator. Deloitte and Booz Allen did not want every consultant to act as a project manager, but for every consultant to understand that when the client asks for project changes, while underway, a project management-savvy consultant can model the impact of change to budget, scope, resource, or quality against the project baseline. Every change has effect.

By using a project management portfolio view I can further quantify the impact of change to executive strategic goals. My role then shifts to business partner, not for me to say, no, but for me o provide business case detail that my client can use to meet their sponsor's expectation; every client has a sponsor, everyone has a sponsor.

Although I, as a consultant, have to deliver to the client, I also know the trying to please the client with every change they request will impact expected results. The more detail I gave about that to the client, the more information they have to deliver projects on time, on budget, and within scope. Those new changes can become a second-phase option, abandoned, a new project, or added with a full understanding of impact. The more the client delivers results, the more I become a trusted advisor and a business partner and, in turn, separate my value proposition from the self-interested contractor or staff augmentation house.

The end is reached when the project's objectives have been achieved or when the project is terminated because its objectives will not or cannot be met, or when the need for the project no longer exits. *

The majority of projects end when objectives will not or cannot be met or the project saps the life and resources out of the organization and the need for the project no longer exits; also known as bankruptcy.

Contact me if you are interested in a portfolio assessment of your projects, planned or underway, or if you would like me to present portfolio project delivery methods to your organization or team.

*Source: A Guide to the Project Management Book of Knoweledge, Fourth Edition

www.amajorc.com blog.amajorc.com

8 steps to better decision making in 2010

Tue, 05 Jan 2010 17:29:13 +0100

RSS streams, Tweets, eBooks, email, meetings, phone calls, magazines, social media, and books, to name a few, I propose 2010 the year of less noise and more decisions.

We are swimming, some might say drowning, in communication saturation*. Nearing the end of the year I thought to post this blog to share with others my goal to manage noise and get an idea from many of you how you approach information and communication saturation to break ourselves from being slaves of the feed**.

Knowledge is power, but decision making needs to make a comeback if for us to realize our potential. With all this noise, this information, this data, is your decision-making process improved? We now have access to more information than we can possibly process, the constant challenge: you can never have all the information and time is your biggest enemy against knowing everything.

So what do you do to filter down to decisions? When's the last time you made a decision instead of a deadline making a decision for you?

Here is how I see the funnel towards decisions (if I had time I would have made a mad 3D hierarchy pyramid, but alas...I ask you to envision one from mere words. If anyone wants to send me a graphic, I'll add it) with noise as the pyramid base:

Noise - all the 0s and 1s being throughout the web, over the airwaves, across the spectrum
Research - the initial question, I wonder if... that sends you seeking answers
Information - the all-source return dump from your question or a 1-way flare (information is different from communication: see below)
Data - the filter to makes sense of what is valuable and what is garbage
Communication - the 2-way relay of what you find and what needs further refinement
Interpretation - the unaccountable and unseen layers of values, wants, needs, bias, emotions, and agendas (to name a few) that your communication target has filtered your communicate through to draw their own interpretation of the information or data. Note: you have no control that how or what you communicate is interpreted as you intended; caution when proceeding
Conversation - the deeper dialogue to clarify responsibility
Decision - the shared commitment

Let's flip the pyramid with the top now on the bottom, kind of like hanging the world map upside down, an alternative perspective:

Decision
Conversation
Interpretation
Communication
Data
Information
Research
Noise

Professionals are valued and paid to make decisions and to make tough decisions. The gray-haired sage is expected to draw upon experience to help interpret and filter to make quicker decisions.

Here are 2 ways to start with decisions in mind:

Begin with a hypothesis - if the hypothesis is proven wrong, all the better, add the new elements and revisit the hypothesis.
Identify the constraints to better hone the target - What limits your journey from noise to decision: time? money? competition? Perfection is the enemy of good, go with what you have of course showing up to meetings prepared also helps...

Good luck to everyone in 2010. I value all the great dialogue, writing, Tweeting, and networking you have shared, because this is the power of social media, the wisdom of crowds and, unfortunately, at times, the Oxbow Incident.

*good name for a blog: Communication in the Age of Saturation part 1, part 2, and part 3, just trying to help
**very good December 15th blog post by Thomas Petersen, Slaves of the feed – This is not the realtime we’ve been looking for

www.amajorc.com blog.amajorc.com

Competing values drives your organization out of business

Sun, 07 Mar 2010 14:10:17 +0100

Cultures are characterized by how things are done around here. Culture is sometimes adopted from the founder, sometimes developed consciously by teams who try to improve performance, and sometimes culture is formed in reaction to a lack of leadership or need for survival.

Culture emerges from collective:

behavior,
values,
norms,
assumptions,
expectations, and
process

When organization culture is set, it is difficult to change. Reasons you need to change an organization culture might include:

accelerated growth,
strategic change,
new market expansion,
operation demands,
new competition,
expansion or new acquisition,
a change in the workforce,
leadership turnover, and
change in the economy

Conditions, like those listed above, constantly occur whether your organization is capable of change or not. Change is rarely linear or ordinal and can come at you all at once. Without an understanding of your organization culture, change becomes a strategy based on luck or hope, and neither luck nor hope are much of a strategy any leader can confidently expect success from.

Using a Competing Values Framework to analyze your current state allows you to identify organization strength and be aware of what to keep and focus on what needs adjustment or modification to excel or to survive. The Competing Values Framework involves 2 surveys to allow your organization, leadership, management, and teams to identify what works best and how people within your organization align or disconnect.

Competing values are important to understand effective performance. People are often recruited to manage within corporate value and demands; too often termed culture. But what happens as a company grows? Not all people can manage in the new environment demands. Many wish for the old days and refuse or can not change. An organization's sustained success has:

less to do with market forces than company values;
less to do with competitive position than leadership ability to motivate;
less to do with resource advantages than a compelling vision; and
less to with strategy, than team delivery

Ever wonder why some people just seem so resistant to change? What is it about those people who never speak up, but you know never commit to change and somehow resist even the most well-planned efforts? What about these influencers and a hope that they buy in does your strategy rely upon to get the majority of people on board. Why might they resist?

The output data from Competing Values surveys are plotted across 2 dimensions. The first dimension can be viewed in the quadrant graph below on the North/South axis and differentiates the North point Individuality and Flexibility, a culture that thrives on flexibility, discretion, and dynamism that moves into a cultural focus on stability, order, and control at the southern most point Stability and Control.

For example North to South:
Some organization are effective because they are changing, adaptable, and organic, whereas other organizations are effective because they are stable, predictable, and mechanistic. These two dimensions from the North polar point of the graph, versatility and pliability to steadiness and durability at the south polar point.

The second dimension, along the West/East point differentiates a focus on an internal orientation, integration, and unity Internal Maintenance to a focus as it moves east of an external orientation, differentiation, and rivalry External Position.

For example West to East:
Some organizations are effective because they have a harmonious internal characteristics, whereas others are effective because they focus on interacting or competing with others outside their boundaries. This dimension ranges from cohesion and consonance on one end to separation and independence on the other.

The 2 dimensions form 4 quadrants, the 4 quadrants each represent a distinct set of culture qualities. These 4 quadrants represent what people value about an organization’s performance and what people define as good, right, and appropriate and found to accurately describe how people process information as well as their core values used for forming judgments and taking actions.

The Competing Values dimensions and quadrants also represent opposite and competing cultures:

Each continuum, North to South and West to East, highlights a core value opposite from the value on the other end of the continuum and are also contradictory on the diagonal opposite: Competing Values

This picture below highlights this more effectively after I added quality characteristics of each culture you can look at the top right quadrant in comparison to the lower left quadrant and the top left quadrant compared to the lower right quadrant. Change is hard and you are really flying blind if you don't know where your organization is at, what they value, or the impact (positive or negative) that process, hierarchy, or flexibility really has on people.

With a Competing Values review you can identify the culture people are working in, then identify any disconnect, by team or business unit, and create strategies that align to the culture or need to challenge the culture.

Imagine a board of directors and the Founder (or CEO) take the Competing Values survey with the results plotted on the graph below:

Just from this visual output can see there is a disconnect. With this data and awareness you can begin with a level set of awareness needs to address before you start change. Now you have a better picture of what needs to start, what needs to stay the same, and what needs to stop. Conversely, without a Competing Values output, would the teams arrive at a more clear picture of disconnect?

Imagine a mix of individuals against a management team for each of the below examples. With a Competing Values analysis disconnect is identify more clearly and can be managed more effectively.

Managing successful teams, leading successful transitions, charting new strategies, and making the right decision on what, or who, to invest in has:

less to do with market forces than company values;
less to do with competitive position than leadership ability to motivate;
less to do with resource advantages than a compelling vision;
less to with strategy than team delivery

Organizations rely on projects to accomplish strategy. An organization's resistance to change is the bait that nimble, flexible, resilient, and hungry market forces and your competition feed on. Your customers today are your competition's customers tomorrow.

Organizations that understand competing values and the impact of culture can train and manage and cultivate people who can grow with the organization and help those that don't find a match for their style. Managing people out of an organization is always an easier conversation than managing them with overly-sensitive gloves or hanging on and hoping they will change - both at the cost of your competition.

Contact me for further discussions on how Competing Values can help solidify the best of what you, your team, or your organization do and to more successfully implement changes to keep you, your team, or your organization competitive.

4 Sources:

Criteria Used by Venture Capitalists to Evaluate New Venture Proposals; MacMillan, Ian; Siegel, Robin; Narasimha, P.N. Subba; Journal of Business Venturing, 1, 119-128 (1985); Elsevier Science Publishing Co., 52 Vanderbilt Avenue, New York, NY 10017

Linking Prefunding Factors and High-Technology Venture Success: An Exploratory Study; Roure, Juan; Maidique, Modesto; Journal of Business Venturing 1, 295-306 (1986); Elsevier Science Publishing Co., 52 Vanderbilt Avenue, New York, NY 10017

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5 tips to manage better meetings

Sat, 16 Jan 2010 00:11:02 +0100

Meetings, meetings, and more meetings. We have meetings to clear up confusion, to communicate, to interact, to make decisions, to listen, and to collaborate. Too many meetings end without clear decisions and too often it is not until after the meeting is finished when the real conversations begin when people:

complain about not being heard,
complain about pushy agendas,
hold back their cooperatation,
complain about lack of involvement

Those type of meetings waste time and create acrimony, which wastes energy. They don't accomplish anything more than creating more work and derailing collaboration.

Groups are smarter than individuals, but only when groups allow individuals the chance to contribute.

Here are 5 tips to help manage meetings:

Pass out an agenda, with goals, objectives, and actions as well as sources for important information to be discussed in the meeting. Pass this out as early as you can, as late as 24 hours ahead of the meeting, if you can. Review the agenda at the start of the meeting. Tie the goals, objectives, and actions to an on-going strategy to remind people the linkage to executive or operational strategy as well as progress
When a new idea is presented at a meeting, the next person who speaks must support that idea: instead of devil's advocate, an angel's advocate
Use meetings to collaborate on risk resolution, not to update people on status or progress; when you count on people to deliver as promised you shift the meeting from accountability to creative collaboration to resolve risk: results. Make sure to assign responsibility and an estimate date to resolve new items. The Project Management Institute defines risk as anything that can positively or negatively impact the outcome; positive risk is called opportunity
Read body language and understand what people are saying through their body language, 80% of communication is body language. Clear communication is the intention of holding meetings. Don't ignore body language: Before a decision is made, facilitate group involvement, to include supporting lone dissension or providing time when a teammate is clearly uncomfortable
Build on the ongoing discussion, someone can only signal a change of subject by first asking, is it OK to change the subject...

Getting things done and getting things accomplished are 2 very different goals. The effort invested to run better meetings is saved from later misunderstanding. Poorly run meetings might be the root why upwards of 90% of all projects fail. Is it better to get through a meeting and drive consensus if people don't commit and don't understand? Time is a resource as much as money, and unlike money you can never earn time.

If you take the time to guide meeting involvement, with the above suggestions, you will find meetings can become a source for great energy and collaboration, instead of dread and fear.

Make the above suggestions part of your pre-meeting communication, coach and cultivate people to adopt and own their commitment to these or other meeting guidelines that are created.

I would love to hear your thoughts.

2 sources:

1.

2. Project Management Institute

Bonus insight from: John Cleese and his corporate training video: Meetings, Bloody Meetings