Category: Organization in the Collaborative Age

How the Fourth Revolution Fosters both Smart Generalists and Super Specialists

While the Industrial Age was marked by increasing specialization, the “Return of the Generalist” in society is a common theme in many books. It has been recognized already in 2005 by Dan Pink in his book “A Whole New Mind: Why Right-Brainers Will Rule the Future“, and I found the issue further developed in an interesting book, “The Rise of the Naked Economy: How to Benefit from the Changing Workplace” by Ryan Coonerty and Jeremy Neuner.

generalist-specialist
Generalist vs Specialized, an obsolete opposition

In this book about the future of work and of the workplace, they identified two key players in the “Naked Economy” of the future: big-picture thinkers, who they call the Smart Generalists, and the small-bore experts, the Super Specialists. The two are complementary. In our future project-based working environment, Smart Generalists will coordinate the work of Super Specialists, and both will have tremendous value.

In the book, the author mention that “My value, like all generalists’, is to know a little about a lot. That means the onus is on me to constantly reach out to new people, read books and articles, watch the trends in a wide range of arenas, and generally be passionately interested in the world. Having that broad knowledge to draw on, and to be able to use it when I need it, brings me a lot of credibility when I’m dealing with people in business, government, or academia.”

The Smart Generalist is coming back, watch for the change in the workplace!

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How the Conventional Organization too Often Crushes True Prioritization

Further to our post on “How to Truly Prioritize: a Vital Skill for Success“, I would like to mention how I observe that most organizations seem to be creating a Brownian movement that leads us in the opposite direction from correct prioritization (i.e., stop doing what is not a priority).

Meetings - one of worst killers of quality time spent on real priorities
Meetings – one of worst killers of quality time spent on real priorities
  • Meetings too often suck out time from real productive work on priority issues and are often unproductive
  • Other people constantly come with new issues and topics that add up on our list of to-do actions with no true priority ranking (or, worse, too many use a priority based on the rank of the originator multiplied by the implied urgency)
  • Emails and other interruptions caused by our modern communication tools pollute the time we could spend concentrating of priority (thus, hard) work
  • etc.

Ask yourselves how much time you really spend on what you have identified as your top priorities for the year. Got it? Really? Research has shown that the time you think you spent on these actions in reality was probably one half or one third of what you think, if an independent observer was really looking at what you are spending your time on!

Fight the natural trend of organizations to create movement for the sake of justifying their existence. Priorities once defined should occupy a significant chunk of your time. That’s the only way to be really effective. A good way is to define spans of time out of the usual operational emergencies to make sure to make good progress on what is really important. Are you ready for it?

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Why Innovation is about Creating Effective Conversations

Hugh McLeod writes in a post: “If your company isn’t innovating, it’s likely because no one is facilitating the right conversations”

Innovation-ConversationFurther he writes, “In Gapingvoid’s long experience working with Fortune 500 companies, we’ve found they all have the same problem. When communication shuts down, so does innovation. And it isn’t lack of money, talent or resources. What’s missing is the interpersonal. They either don’t like each other or don’t like talking to each other or both.”

Ideas are generating by the encounter and the mix with other ideas (see for example our post ‘Idea Multiplication‘). Innovative companies must have the right conversations to foster innovation. This often needs to be facilitated – either simply through the architecture (creating places to foster encounters) or through facilitation. It takes some effort to create meaningful, powerful conversations – and they are so needed in most organizations!

Create powerful conversations, and you will create innovation. So simple!

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Why Giving the Right Impulse at the Right Moment is More Effective than Continuous Effort

When it comes to achieving results, it is more important to put the right effort at the right moment than to row continuously up to exhaustion.

raftingThat is what I learnt when I was lucky enough a few weeks ago to experience rafting in the Alps mountains. How does that work? You let yourself flow down a torrential river on some air filled rubber raft. As a beginner, you have to follow the orders of an experienced helmsman.

The way it worked was very instructive: most of the time we just let ourselves be taken by the flow (which was a very pleasurable moment); only at determined moments was decisive effort required to maneuver in rapids, in a concerted and quick effort. And even when it came to avoid an obstacle, the point was to strike an effective compromise between effort and letting oneself be pushed by the flow. And all in all, it was more effective to row powerfully at short, decisive moments, than try to row hard all along.

This event was a teambuilding with a client, and as such this was a great learning point for all sorts of organizational change: the point is not to try to try to constantly try to go against the flow, nor to exhaust oneself trying to resist the force of the organization’s natural evolution. The point is to identify the short moments of intense effort that are sufficient to bring the boat to the chosen safe trajectory. It is about knowing that you need to let go most of the time except well chosen, intense moments. Great learning!

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Why Management’s Job is to Build the Capability to Recover if Failures Occur

“Management’s job is not to prevent risk but to build the capability to recover when failures occur” – says Ed Catmull, president of Pixar. While it is possibly a bit stretched (why not prevent known risks if easy?), this value has a great value in the world of uncertainty we are leaving in.

freak train accident
Freak event – all resides in how senior leadership will now react!

This brings us to the need to have reserves to cater for unknown- unknowns, the fact that our environment is generally shaped by short events of major crisis, and many topics we have discussed at length in this blog.

This also indicates that it is essential that leaders of an organization are not completely swamped by the day-to-day operations but have spare capacity available to do this important job nobody else in the organization can do (because those generally in charge of Enterprise Risk Management do not have the level of authority to really consider disruptive events).

Senior leadership’s role is to be able to manage disruption in a positive way for their organization, when it happens, and this requires a lot of preparation. Because luck is not luck, it is just good preparation.

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Why Internal Stability is So Important in an Unpredictable World

Following up on an idea from Robert Branche in ‘Les Radeaux de Feu’ (only available in French), living organisms have organized themselves in the face of the inevitable increase in unpredictability of the world by increasingly developing internal stability.

penguins
Penguins maintain internal stability (homeostasis) independently from the external conditions – which can be very unpredictable

This is the case very visibly in mammals: they are clearly the dominant species, they have resisted to many cataclysms, and they are at the same time the animals that maintain the most stable internal environment with a constant internal temperature, glucose levels etc. This is called homeostasis.

Robert Branche takes this observation in the realm of organizations, and concludes that homeostasis is a necessary condition to thrive in an ever more unpredictable world: internal stability is necessary to properly manage external changes. It is important to maintain that internal stability and not let oneself be too much driven by external conditions.

This comes with a warning however – according to Robert, “the existence of internal order and rules must not reduce uncertainty, but make its development and acceptance easier“. The organization should not disconnect itself from reality for the sake of maintaining its internal stability.

Still I find this idea very valid that the most successful organisms and organizations thrive in an evermore unpredictable world by maintaining internal stability, which gives them the capability to respond instead of just reacting. How stable is your organization internally in the face of external changes?

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Don’t Underestimate How Easy it is to Start a Business Today

The cost and effort to start a business has dramatically floundered in the past few years with the advent of the Fourth Revolution. I believe this fact is still not fully understood by the mainstream. It could comes up to the point where even Venture Capital, which was so important to the development of new technology start-ups in the 1990’s, might not be so relevant today in the field of innovation.

start-up business plan
A typical start-up business plan framework from ‘Business Plan Generation’

Some relevant stories and posts by Vivek Wadhwa include Beat the GMAT, a 32,000$ start-up that was valued millions in a few months, or this Quartz post ‘Anyone, anywhere can now build the next WhatsApp or Oculus‘.

With the advent of cloud services, it is very cheap to have a professional level infrastructure at your disposal almost immediately and for a few thousand dollars a year, as I am also experiencing with my own ventures. It is also very cheap to develop mobile applications, websites and other web-based software based on existing free, open source basis. The importance of strong financial backing is thus delayed in the development process of new start-ups to the point where they can demonstrate revenue and whether their business model could be viable.

This of course removes lots of excuses not to start following your insights and ideas and create value to the world!

For more insight into business models I strongly recommend the Business Model Generation book, a collaborative book that created a framework that is now used throughout the start-up business community.

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How to Organize Working Space for Collaboration

Working space spatial organization is important when it comes to fostering collaboration. Many visionary entrepreneurs know this. And they came up with many different solutions.

world's largest desk
World’s Largest Single Desk

Steve Jobs at Apple is famously quoted for his bathroom concept at Pixar (one single instance so as to make sure people mix). Employees at Valve can move their desks as they want/ need to create temporary clusters around projects. Recently, a creative agency in New York came up with a design for a single desk for their employees (it is worth watching the presentation video to fully understand the design!) – (beyond the publicity, one wonders whether is will really enhance collaboration)

More commonly, start-up companies often start cramped in a single room, and collaboration is as a requirement as simple rules of community living!. In the field I am consulting in, large projects, an integrated project team interacting in a single open-space is a must.

There is no single solution, but managers still often forget how the physical space can influence productivity and creativity. Review your office lay-out and make sure that it fits what you expect to happen within your organization!

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Why the Percentage of Overhead (SG&A) is Larger for a Small Company

Recently I was negotiating a consulting contract with a client and the client came up with the argument that our price should be lowered compared to a large consulting company they were employing at the same time, because as a very small company, our overheads (sales, general & administrative costs – SG&A) should be lower. I was convinced on the contrary that due to the lack of scale factor, they are in fact higher (as a % of revenue).

We did not conclude the argument before the end of the negotiation but that got me thinking. I did a bit of research and what I found is indeed that as a general rule, SG&A diminish as a percentage of revenue when the size of the company increases, due to economies of scale, such as for example in this study of software companies:

SGA ratio to revenue depending on the size of the company
SGA ratio to revenue depending on the size of the company

Would that also hold true of a very small company like my current company (2 employees)? My take is that it is certainly true even if is not necessarily clearly valued because I do spend a lot of my time on administrative and marketing stuff without being compensated for it (and without counting my hours). In addition, even in a time where it is easy and cheap to have the necessary infrastructure setup, the costs of using external contractors for such tasks as accounting, payroll etc is necessarily more expensive than having internal resources doing it internally – but the size does not justify a full time employee on these tasks yet.

It is thus clear that for very small companies, if it was fully valued, the percentage of SG&A effort is much higher than in even slightly larger companies, and much higher than very large companies even if they do use a small percentage of their revenue on activities such as research and studies.

In any case the debate was probably not relevant because what is important, is the going market rate for the services provided, amended by the value brought to the client organization, which needs always to be much higher than the cost of consultancy!

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How Innovation Will Necessarily Alter the Power Balance

Following up on our previous post on why real disruptive innovation does have to change business models, this inspirational image from Hugh MacLeod is a great complement.

original_ideas_hugh2Real good ideas do necessarily alter the power relationships (and that is why they are always resisted, but that is another story).

Power relationships include those relationships in an organization’s hierarchy as well as those relationships in a market.

When I am facilitating, it is interesting to see how I can feel that the group stumbled upon a good idea – when someone starts feeling uneasy about this is going to change power relationships (and in general, his or her own power). Resistance starts to kick-in. It is a sure sign that we hit the nail on the head and that a good idea has been produced. It needs to be captured before it dilutes itself, and assessed to check whether it is just good, or whether it is great.

Image and inspiration by Hugh MacLeod at GapingVoid.com

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How True Innovation Requires a Business Model Transformation

Tesla Motors (an electrical car-maker) is one of the hottest hardware start-ups in the US at the moment. The CEO Elon Musk is one of the stars of the new economy. Apart from the innovative quality of their product (if you have the opportunity, visit one their showrooms!), and of the underlying technologies (some say that the battery technology is going to be even more important than the cars themselves) the most interesting part of this long term experiment is how Tesla has to upend the well-set business model of car selling to be successful.

tesla-model-s-logoIt appears that there are strong regulations in the US about the fact that cars would need to be sold through franchised car-dealerships and this creates all sorts of weird market effects. Tesla is currently battling to topple these old-fashioned regulations, and might well eventually win at that game, although that will take long consistent efforts (see Bloomberg’s paper on “Can Tesla Topple the Car Dealer Monopoly” and this post “Tesla versus the rent-seekers“). In the meantime there are strong legal cases based on old-fashioned regulations that prevent the start-up to effectively deploy its business model.

The more general question is: can there be real innovation without disruptive existing business models? Or, is a technical innovation that does not disrupt an existing business model a real transformational innovation?

We can take this question further: can established players really be innovative, because real innovation would challenge their existing business model? For example, in Tesla’s market, could conventional car makers really lead a transformation into electrical cars, because they also need to protect their conventional business and modes of distribution?

I am more and more convinced that true innovation is not technical. It is innovating at the business model level. Look for innovations in that space, because that is really what is changing the world.

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How Innovative Organization Forms Must Address our Psychological Need for Visible Status

In this blog we have made the case on how the Fourth Revolution (and its widespread availability of communication capability) will lead to a much flatter organization – and that it does scare many people (see the post “What is so Awful About the Disappearance of Hierarchy?“). There is currently considerable debate about the need for hierarchy, like for example in this recent Stanford Business School article, ‘The Case for Workplace Hierarchy‘.

hierarchyOne of the points of the paper is that “power structures haven’t changed much over time, […] the way organizations operate today actually reflects hundreds of years of hierarchical power structures, and remains unchanged because these structures ‘can be linked to survival advantages’ in the workplace“. Also, “hierarchies deliver practical and psychological value, in part by fulfilling deep-seated needs for order and security“.

Hierarchy would then be justified by deep psychological needs to recognize effectively and visibly a power structure that would help people orient themselves.

There is no doubt that societies or groups or people do tend to organize themselves around a spoken or unspoken power balance and that hierarchy has the benefit of making power and status immediately visible. It is very possible that most of us do need some kind of social hierarchy to fit in, as a deep-seated psychological need. Still there are other ways to show visibly power or importance, and these ways are being used or developed by social networks today (recognition of top contributors, peer ratings, Klout score etc.). They are not mature yet and this is an area of interesting and controversial development.

What I take from this debate is clearly that flatter or no hierarchy is only possible if there is a clear way to visibility show some kind of status in the organization, and that successful companies that implement new ways of organizing themselves need to address this psychological need. What do you think?

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