Category: Organization in the Collaborative Age

How to Overcome a ‘Big Gulp’ Decision in Transformations

Following from our previous post ‘How many Transformations Fail Due to the Lack of Decision‘, in her post ‘Big Gulp Decisions‘ Charlene Li suggests when it comes to the manner of taking the decision to transform, that the right strategy is to ‘burn the boats’.

“Realize also that in the end you’re not going to have all the answers. You will never be 100% certain. […] Once you decide to make this decision be prepared to what one disruptive company calls “burning the boats”. We have to be willing to say we’re making this decision and we’re moving forward and there is no going back. Because if people think that there is an option to go back to what you normally doing before, they will hedge.”

On that perspective, I am not too convinced that it is the right strategy in all cases, because contrary to the Spaniards landing in America with Cortes, organizations nowadays live in an open world – people can decide with their feet to go somewhere else. Therefore, while it is important to ensure commitment to the transformation, the risk of people fleeing is also real.

My recommendation is to instill the transformation at a reduced scale in a specific part of the organization – maybe a specific subsidiary, or even a newly created business, and then let it spread by example and exchange of personnel to the rest of the organization. This also avoids to ‘bet the house’ on the transformation and maintains revenue from the traditional business. This approach may seem less efficient, but it takes into account that something that works will attract people in an open world.

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How many Transformations Fail Due to the Lack of Decision

Charlene Li is a specialist of digital transformation. In her post ‘Big Gulp Decisions‘ she expands on the issue of taking the decision to move into actual transformation after the phases of analysis and planning. If it is a real disruption, the change will be dramatic and probably irreversible. What does it take to move forward?

“In many ways the reasons why most organizations do not go into the disruptive strategies and really move into that assertively and intentionally is that they come up to this big gulp moment and they haven’t prepared for it. For some reason they think some magic wand will show up and they can wave it and it’ll be an easy obvious decision. It’s never that way“

So, many failures in transformation programs could stem from the fact that when comes the time, the decision is not actually taken.

This decision can’t be a half-hearted decision. The governance body must be prepared to take it. It might be the main responsibility of the directors, in addition to planning for the transformation, and it might be the most difficult decision to make: what are you willing to stop doing? Are you willing to bet the house on the transformation? Will you stick to it whatever happens?

“Preparing for that big gulp moment is something that has to be built into a disruption strategy. What are the preparations, the data you need to make? Also, what are you going to do afterwards to be able to make sure that people are aligned and able to move forward from the big gulp moment?“

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How Levels of Authority Should Specify the Right Debate Forum on Decisions

Following up on our post about ‘How To Find the Right Balance for Bureaucracy‘, the issue of decision approval in organizations is always a critical one. The issue of Levels of Authority granted to individuals always revolves around pre- or post- control. What is important is that the smaller decisions are not impeded by delays and are in fact controlled post-decision; but that for important decisions, sufficient debate occurs prior to the decision.

In fast growing organizations, levels of authority are always too low. It is often the same in organizations that are not used to running large projects when it comes to the level of authority of the project manager. Levels of Authority often need to be increased to minimise delays, and improve reactivity. However, for major decisions that can have a substantial impact on the organization’s performance, it remain legitimate to ensure that a proper debate occurs. And sometimes those decisions may look small but will have a high leverage on performance.

The way approvals happen in most companies however is that despite a proper system of levels of authority, debate do not happen prior to the decision. Decisions are limited to clicking on an approval button and often there is no context to the decision. The issue may also lie in improper levels of authority, and the important decision may be hidden in the midst of many less important ones.

Levels of authority should not only specify authority levels: they should also specify those decisions that require debate, and how this debate should be conducted.

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How To Find the Right Balance for Bureaucracy

I am always astonished as how fast bureaucracy can develop in any organisation, i.e. activities being created that keep people busy with limited value created for the client. In this HBR article (in French) ‘Le coût de la bureaucratie‘ some measures of bureaucracy and of its costs are developed. At the same time, some bureaucracy, systems and standards is needed to keep large organizations going and remain effective as they scale. How can the right balance be found?

Bureaucracy is measured by looking for example at the time it takes to get a given decision, and the HBR paper shows that it increases significantly with the size of the organization. This is obviously a problem. At the same time, some kind of control is required on decisions being taken, in particular when they can have a large leverage on the organization’s performance. Similarly, a minimum of internal coordination and systems are required when an organisation grows, to make work more effective; but they should not be too inflexible and unable to adapt to new circumstances.

There is a fine balance between not enough and too much bureaucracy. Those organisations that find the right balance are the most effective. The main issue, I find, is that principles of operation often become obsolete but remain in force in bureaucratic organizations. I believe that every few years, a hard look should be taken at how the organisation works, and an objective of replacing 30 to 40% of its operating principles should be sought.

Do you practice this periodic health check?

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How Emotions Drive Organisational or Social Change

I love this Gapingvoid post ‘Why change management is emotional‘. It just hits the nail that every organization leader should avoid. Contrary to general belief, change can’t just be created by an executive decision and a powerpoint deck.

“The only thing that drives real change are emotions.

A major change is emotional brain chemistry and can be ignited just by a simple thing you do or say. Once you’ve flicked the switch, amazing things can happen. It should be supported by reason or argument”

It follows that it is essential at the start of a change management process to identify which are those emotions which you expect to change and address.

It may look hard, but actually when taken from the emotional side, change can be quite easy. What’s difficult is to figure out the hot button that will make the organization respond.

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How Poor Management is a Hurdle to the Automation of Repetitive Work Tasks

In this excellent Atlantic piece ‘The Coders Programming Themselves Out of a Job‘, the dilemma facing employees that manage to automatize their work tasks is described in detail: what should you do if you manage to automatize your 8 hours’ task and then have nothing more to do?

Some fake it and try to look like they’re hard working – until they are caught. Some others transparently declare the situation – management is generally surprised (but not necessarily awed), and often takes too much time to reorganize the work. The central question is “Is it unethical for me to not tell my employer I’ve automated my job?”

In my view, this article just shows poor management quality that is unable to imagine that job tasks can be automated, or respond positively to employee initiatives. This is the reflect of an unhealthy corporate culture, which is unfortunately too widespread.

It seems to me that we should celebrate people who manage to automatise their tasks, give them a raise and see if they can contribute further. There is no fun performing repetitive tasks all day long if they can be easily automatized. And it is definitely not future-looking. It is much more fun to devise and code creatively and shift the value elsewhere.

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How Proactive Career Moves Are Better Than Defensive Ones

Following up on my previous post ‘How Most Executives’ Should Plan For a Second Career after Age 45‘, I would like to share my experience and view on how a proactive career move at that stage is better than a defensive move – and thus, why it is so important to anticipate the ceiling of corporate career.

When placed in a defensive situation, i.e. having been terminated forcefully from an existing position, the executive often has some benefits in the form of termination premium which can sometimes be sizable. However, it is often not sufficient for the following reasons:

  • the executive’s personal finances are not adapted to the new career path with a high running expenditure flow, and often he does not have sufficient reserves to experiment with a new career keeping calm about the time it takes to build something new
  • if not anticipated, the time to change one’s mindset can be very long, in particular if it only happens if the executive spends too much time trying to find an equivalent corporate position and only considers a new career after a long time. This strains the cash situation

Therefore it is essential that executives take a proactive career change approach as soon as they identify that their corporate career seems to approach a potential ceiling. Proactive planning can even involve taking active action in parallel to the executive role, and even negotiate a mutually beneficial severance package with the corporate employer, leveraging on possible social benefits.

I can only recommend executives to consider proactively their second career early enough. Once awareness sets in, their dynamism will do the rest – still it takes time for awareness to set in and mindsets to change.

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How Most Executives’ Should Plan For a Second Career after Age 45

I read in an article written by a leading executive headhunter how the reality of most executives and senior executives’ career, with few exceptions, is that it growths and will reach a ceiling around age 40-45: seats in the executive management committee are few and far between. Therefore, for executives, it is important to realize and understand this fact, and plan accordingly for a second career.

This issue is becoming particularly acute nowadays because organizations will not any more keep deserving executives in their payroll for past services rendered, if they don’t have an operational role. I meet too many executives that for a reason or another have been made redundant and are struggling with their identity and career prospects between 45 and 55.

It is really amazing how this issue is not part of the collective consciousness. The reason is probably because the corporate world first and foremost presents as role models those exceptions that continuously rise throughout their careers.

There are plenty of interesting and exciting second careers open to executives that have reached the ceiling of their corporate career: founding or taking over a smaller business, investor, interim management roles, independent professional, leading a para-public organization, being elected into political roles etc.

But too few are planning ahead for this second career and life, as they are too committed to trying to be successful in their corporate life. Statistics don’t lie – most will have to change. This is why I am now recommending executives I meet that ponder this issue to figure out something of interest, and start building this new second career in a proactive way, which is always much better than doing it in a defensive manner.

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How “Entreprenants” are different from ‘Entrepreneurs’

Following up on our post ‘How The Definition of Entrepreneurship and Start-Up Can be Confusing‘, I stumbled upon a new concept in France developed by the Ecole de Paris management school, differentiating between “entrepreneur” and “entreprenant” (enterprising). And there is actually a manifesto, ‘le manifeste de l’entreprenant‘, and even a website Le jardin des Entreprenants – the Enterprising’s garden) showing various stories (all in French only).

The idea is a bit similar to the one developed in my original post. “Entreprenants” combine the invention of solutions and unexpected activities with a commitment to create meaning, thus reinventing the world in a powerful way.

In the manifesto, several recognition traits of those new actors are given, some of which are really differentiating with regard to the standard concept of entrepreneur:

  • “Entreprenants” are not necessarily entrepreneurs, and their initiatives can grow outside incorporated entities
  • An entrepreneur can be an “entreprenant” if he/she has a social vision of this initiative
  • the “entreprenant” is a gardener and not a builder: he grows plants accounting for environmental conditions and stress

I conclude from this that there is a growing awareness that the traditional concept of ‘entrepreneur’, at least as it is being implemented nowadays, is limiting and that alternate concepts should co-exist.

 

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How Startup Founders’ Age Influences Success

In this interesting summary of an interview of Paul Graham, Y Combinator founder: ‘Paul Graham on why he doesn’t like seeing college-age and younger founders‘, the point is made why founders should not be too young – and not too old as well.

The point is made on the basis of the relatively wide sample of start-ups that have been accelerated by Y Combinator, and their final outcome. It is important  to mention that reference is made here specifically to ‘startups with a potentially exponential development‘ as usual in this kind of post (ref our post ‘How The Definition of Entrepreneurship and Start-Up Can be Confusing’).

Paul Graham considers too young founders (i.e. still in high school) often do not consider a sufficient range of options because of their lack of experience, which leads to less success, and that it is not a good thing to encourage them to dive into a founder’s life too early.

On the other hand, he sees people that have too long an experience in a corporate structure – typically more than 20 years – not well suited either to the founder role, probably because of the work habits they will have developed.

The interesting part is that he sees determination and intelligence to be two highly required skills, with determination coming first. It takes a lot of energy to be a founder, and that is another reasons why founders in their 20’s and 30’s are preferred by Y Combinator. Again, this applies to a certain kind of start-ups and does not preclude people of other age-ranges to be a founder – and there are always exceptions to the rules!

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How Entrepreneurs Should Care About Their Contributors

Now that we have clarified what should be the objective mix of an entrepreneur, I would like to focus on one objective that I believe is too often forgotten: providing opportunities and livelihood to employees and other contributors involved.

It is amazing how this objective is so often forgotten when it is central to the creation of a healthy organization. Only by having contributors involved, committed and excited by the intent of the organization can it deliver exceptional service or products to clients.

And actually there are some situations where I find that this objective can be an essential guiding objective, in particular when the boat rocks and the economic situation of the company is not that great, or when there is a question about its future for example when shareholders don’t agree. My guiding principle is that people should not suffer from the inadequacy of shareholders or directors. They should be considered in the equation.

And while I know about being realistic when there is definitely a need to downsize because the economic equation does not work, this can be done as humanly possible.

Some fellow entrepreneurs might find that position too mellow but I truly believe that on the long term it is the only sustainable position, because the world is small and reputation is quickly earned one way or the other.

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What Objectives’ Mix Should Entrepreneurs Have?

Following up from our previous post ‘How The Definition of Entrepreneurship and Start-Up Can be Confusing‘, now that we have clarified that entrepreneurship is not only for licorne-type exponential growth startups, the next issue is what is the objective of creating a company, and more specifically, what the objectives of the founders are.

Businessman is sailing on paper boat in ocean. EPS 10 file

Objectives can roughly be a mix of the following:

  • working on something the founder is passionate about,
  • provide a solution that is missing on the market, creating value for customers or more generally for stakeholders, putting one’s mark on the world through the leverage of an organization,
  • providing opportunities and livelihood to employees and other contributors involved,
  • making money.

The weight mix of these objectives can vary, but generally there is a definite mix, and my view is that all of them need to be part of the mix.

It is important to have all aspects covered because:

  • passion is the only way the hard work will be provided on the long run
  • putting one’s mark on the world is about recognition and satisfaction
  • providing opportunities to employees and contributors is essential to have their full contribution and as a responsible business owner
  • making money is part of the motivation and just compensation for the value created, and provides with opportunities for creating more businesses and activities.

As a note, those founders that create companies only with the objective of making money exist, but their companies are generally not exciting when not quickly involved in inappropriate accounting issues. Making money can be one respectable objective, through the leverage provided by an organization, but the main objectives should be different.

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