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By Krishna, April 14, 2006

When the project is not yielding the results, it is time to take a close look at the processes. If people are following the processes, then seriously consider looking at changing them. Sometimes a process or methodology may be too cumbersome for the project and acts as a hindrance or unnecessary overhead. Sometimes the methodology may be too light and ignores necessary practices like spending enough time on design or requirements gathering and analysis.

This doesn’t mean that when things are going right, there is nothing wrong with the process. There may be problems that haven’t manifested themselves yet and the Project Manager should not be in a state of complacency.

But when things are definitely going wrong, continuing to do the same thing over and over again or trying to do them perfectly may not be the right solutions. People tend to get married to some favorite methodology such as CMMi or Extreme Programming and start exhibiting cult-like behavior in the sense that no dissent regarding the methodology is tolerated.

A typical behavior is when something goes wrong and the answer provided by the manager goes like “You are not doing it right. If you really did it right, you will face no problems.” Or something like “You are doing X, Y and Z. But you missed W. So do that”.

I am very suspicious of answers like that. Most of the time, the developer to whom the advice is given knows exactly what the problem is. For example, it could be a case of vague requirements. But the developer is told that it would be time-prohibitive to “waste” a lot of time on requirements and anyway he is “supposed to know” some of this stuff. He has to “stop thinking technically and more from a business standpoint”.

Now how stupid can the situation get! The manager has now turned the developer around so that he is now somehow to blame for the whole situation. Well, enough of that.

The effective manager never commits emotionally to one particular way of working. He or she understands that every situation has its unique demands and therefore, may require different paradigms or framework. He or she also understands that every situation is necessarily fluid and dynamic and that important decisions may need to be revisited, revised or reversed when necessary. That is true “Risk Management”. You understand why you make a decision. When the underlying causes for your decision change, the decision must evolve or change too.

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By Krishna, April 13, 2006

Among my favorite TV programs are political debate shows. I enjoy watching arguments between heavyweights of opposing political parties and events like the Presidential elections are gold mines because you get to watch the top contenders in action. Long-time political leaders like George Bush and John Kerry make it look so effortless and natural, regardless of whether you agree with their political viewpoint or not.

The almost faultless performance under immense scrutiny and pressure before an audience of millions of fans and critics is the result of a lifetime of training and experience. In addition, each person has had the support of a huge network of associates who have fed the candidate hours upon hours of information, which the person is able to crystallize in the heat of the moment to lucid, moving sentences.

Any star-rated performance has similar characteristics – It looks so easy, yet there is a lot going on behind the scenes and over a lifetime that has resulted in that performance, whether it is in politics, sports, business or any area of life. There are obvious outward characteristics of leadership in any field, but there is a lot beneath.

My point is this: Leadership is never just about one thing. The temptation to use a checklist for management is huge, but the fact is that leadership is a sophisticated mix of qualities, experience, knowledge and strategies. And it is an ever-changing mix as leadership is also a never-ending quest for constant rediscovery and reinvention.

Why is this so? Why cannot leadership be distilled down into a few simple concepts that can be used to run corporations and other organizations successfully? Doesn’t evidence, particularly marketing anecdotes and rags-to-riches stories, point to “simple is better”?

The most important thing to realize about foundations in organizational leadership is to understand the complexity underneath the simplicity of the concept. For example, take a concept like “Continuous improvement” – seemingly so easy to understand, but when it comes to implementation, it actually requires tremendous effort and coordination.

The “simple is better” slogan in true life is actually very deceptive. To take an example, take some of the successful websites like Google, eBay and Amazon, which are known for their intuitiveness and ease-of-use. But this simplicity is brought by amazing sophistication in technology. Behind the simple Google search textbox is an array of hundreds of thousands of servers which are capable of the most complex number-crunching and data storage. Or take FedEx – the simple solution of “Absolutely, positively overnight” is achieved by an astonishing capital investment in transportation networks and advanced technology.

The operation of any organization is extremely complex and fraught with conflicts – even “ugly conflicts”. There are conflicts of time, conflicts in resource allocation and risk management, conflicts between personnel and with different customers and conflicting priorities. Each type of conflict demands a different set of qualities that can effectively manage it. For example,

1. Resource Allocation Conflicts: (Requires) Knowledge of operations, the business, competitive environment, etc. Allocation of human resources requires ability to match up skills, talents and attitudes with needs of the project
2. Contract Conflicts with Customers: Proper knowledge of product or service involved, including costs. Understanding of internal capability to deliver on promises. Negotiating skills
3. Conflicts between personnel: Being patient to listen to all sides of the story. Being fair in one’s decision and avoid any bias or perception of bias. Communicating the decision properly to all affected personnel.

Each type of conflict requires a different set of knowledge and skills to resolve it. In each case, certain skills or knowledge may be useless to the task. For example, while openness is a great trait in resolving conflicts between employees, it is less useful in a resource allocation problem.

A typical CEO or any leader has to deal with hundreds and thousands of such problems every day. Every conflict is a constraint on doing business or the work of the organization. These constraints are not limited to one or two particular aspects of the business. While some problems and constraints may be more visible (such as union conflicts), others may be dormant (obsolete technology, untrained people) for a long time before they bloom into crises.

What this means is also that every part or function of the organization has its importance and stake in the success of the organization. By this, I don’t mean that they are equally important. For example, the marketing function may be more important than operations in one organization and less in another. Nevertheless, the importance of each function must be understood in relation to the organization and managed accordingly.

That is the “holistic” approach, or integrated approach. It requires a thorough understanding of the entire organization. Good leadership must have the ability to take in the whole picture and understand how everything falls into place. Leadership must also understand how to transform this complex organization by making necessary changes to different structures within the organization.

The danger in not following such an approach is to tinker with some part or process of the organization and expect everything else to fall into place. While there may be short-term results, typically problems fester under the radar screen and become visible when the priorities have to undergo a change and, lo and behold, the leadership finds that the supposed strength that would have made the change was starved and no longer available. Even worse, the newly built-up strength may have to be toned down to allow the other parts of the organization to catch up. For example, better production having to slow down for inventory management.

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By Krishna, April 12, 2006

There are two types of innovation – the evolutionary, slow, Darwinian changes and the revolutionary, sudden, abrupt type of innovation. The question is not which of the two companies should do? It is whether the company can do both at the same time and do it well.

The evolutionary style of innovation is necessary to stay ahead of visible competition. It is about making the hundreds and thousands of incremental improvements in every aspect of the organization’s activities – operations, marketing, sales, finance, etc. Each improvement brings a small positive change towards the success of the organization. The cumulative effect over time is to produce a huge change improvement in the organization.

The evolutionary change is relatively easy to implement, because it is easy for people to make minor changes to their way of working instead of having to change fundamentally overnight. Training is also easy. The process is also less risky as changes which do not result in improvements can be easily cancelled at a low cost. The process can be delegated to many persons in the organization.

The sudden, revolutionary innovation is necessary to stay ahead of competition that is unknown and invisible. Stable, successful organizations find it very difficult to change their basic way of working because, after all, the current model is what made them successful in the first place. When faced with rapid change, organizations behave like ostriches with their heads in the sand because they do not have the means to change course.

Leadership plays a huge role in making this happen. The leader must always be questioning what the company is doing at any time. The upstart who snatches the market from the giant corporation usually has no respect for the giant’s services or products and invents something that will replace them. Instead of waiting for someone to make one’s product obsolete, the organization should do that itself.

Tom Peters recommends that 50% of a company’s revenues in the last 24 months should come from new products or services. What this essentially means is that a significant part of the company is always trying to put the rest of the company out of business by inventing new things. This may be difficult to swallow and achieve, but unless the company’s leadership desperately tries to find products and services that can destroy its current line of products, it is guaranteed that somebody else in the world is going to do that.

Revolution is tough. People love stability and can be overwhelmed by rapid change. Leadership must understand this and put the necessary organizational structures, like compensation models, to drive this process. Again, a clear message about the consequence of lack of innovation is vital for ensuring the partnership of employees during the transition process.

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By Krishna, April 11, 2006

Today’s organization is also under more pressure to change than in any previous period of history. This is not just true for large multinational corporations, but also for mom-and-pop stores and non-profit organizations. If asked for a single phrase to explain the drastic changes in our world, it would be the “snowball effect”.

Every single day or, perhaps more aptly, every single minute, humankind is building upon its own inventions. Every moment, thousands of individuals in countries across the world are being added to the global talent pool and contributing their ideas and innovations in every imaginable way. The cumulative effect of this human contribution has been to feed levels of revolution in every aspect of mankind.

The end of the Cold War was the point when the snowball started rolling very quickly down the hill. Finally, the world had decided to agree upon the single viable economic model – the free market economy. Globalization has brought many more countries and their companies into the global market. Liberalized trade and tariff policies have increased international commerce.

Technological advances like the Internet have lowered the entry barriers for small start-ups to successfully compete with the market leaders. Whereas in the past, it was hidden in tomes in libraries, knowledge is now universal and extremely accessible. While a Google website allows one to search for any piece of obscure information, it is being digitized by thousands of volunteers in websites like Gutenberg.net.

Changes in tools, technologies, and methodologies have changed the rules of operations and the marketplace. The needs of customers are also constantly changing in this new world. Today’s consumer is exceptionally fickle – they are quick to move on to the next product or company if it offers greater benefits or removes any pain. Technology is quickly eroding any idea of long-term lock-in of a customer.

Everywhere one looks, there are real-life examples of rapid change. Technology has eliminated millions of jobs not only in the manufacturing sector, but also in other areas. For example, voicemail and Palm Pilots have replaced secretaries, TurboTax and QuickBooks Pro have reduced the need for tax consultants and accounts, online banks are killing brick-and-mortar ones.

What does leadership do in terms of rapid change? The simplistic answer is “accept” change. That is a given – the leader must do that or else the market will help the leader learn that very quickly. The only people left today who really fear or oppose change are the ones who are unprepared to meet change. And that is the real struggle.

The leader has to first recognize that while rapid change can be highly disruptive, it offers new opportunities for success at the same time. For example, globalization has opened several world markets for a company’s products and services. It has also increased the number of potential partners and vendors that a company can ally with to find economies and cut costs.

The question is how to take advantage of change and how to stay ahead of it. That brings us right back to the “listening and learning” concepts. Real leadership must have the right, unadulterated information coming from every possible category of information sources. This information must be used to repeatedly drive innovation within the company.

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By Krishna, April 10, 2006

Take a look at any winner in politics, sports or war. It is almost always the team with the best teamwork that wins. The victorious Governor has the better coalition and broader-based support. The Super Bowl team is the one which played together as a team. The battle-winning army had the best coordination.

Success comes to leaders when they can get the organization to work together in meeting the goals. To build upon the earlier analogy, it is faster to get to the goals when some people are not walking in the opposite direction and obstructing the others. Leaders cannot achieve anything by themselves – all they can do is cook up ideas that will not get implemented.

It is therefore necessary for leaders to forge partnerships within the organization. Partnerships with employees are commonly known by that term “culture”. A partnership, by definition, means the following: Coming together, setting mutual goals, agreeing on the right activities and finally sharing in the success or failure.

When is there a “lack of culture”? It happens when the goals of the leader and the goals of the employees are at cross-purposes. Why does an employee come into the office and seemingly work in a destructive manner, i.e., without any attention to quality or productivity? Because when there is no partnership, it doesn’t matter! When no partnership is forged, there is no stake in the system for the employees and the management may very well be speaking the Hiri Motu language when they talk about all those grandiose plans.

A different set of partnerships comes about when the leader acknowledges the areas in which he or she is fundamentally weak in or cannot learn within a reasonable timeframe. Such leaders surround themselves with other leaders to complement them by providing knowledge and experience in various domains.

Partnerships are not just internal. The organization must look for partnerships everywhere, including customers, vendors, distributors and, believe it or not, competitors. Partnerships can take several forms – it may be as simple as creating a vendor community, establishing an Owner’s Club or an online web community or working towards common standards.

Establishing a partnership with a customer means to look out for the customer’s best interests and to stay ahead of their needs, demands and, yes, even “greed”. By that, I mean anticipating the next need of the customer even if it seems totally irrational. For example, the customer of a software product may have a stated need to email one particular report to one particular named manager. When they actually use the application, they may in fact want to email several reports to several managers and have it scheduled to be sent at 7:00 am daily. Now that falls into the greedy category, but as a software product company, if it was anticipated and provided, the customer falls in love with you.

Establishing relationships with suppliers, vendors and distributors is sometimes given low priority, because they are usually down the food chain. But some of the biggest corporations like Wal-Mart and Microsoft have reached the top because they were willing to build those partnerships, while those like Apple, with huge potential, have faltered because they wanted to go it alone. There is a saying, “Remember those whom you meet going up because you will meet them coming down.” The corollary is that keeping happy those whom you meet going up will keep you up there for a long time, because there will be less people to drag you down.

Now, why would one want to establish a partnership with competitors? And doesn’t that have shades of legal anti-trust issues? The fact is that while a company can be in cut-throat competition, there are many areas that it can co-operate with competition to reduce unnecessary bleeding. Industry standards, favorable government legislation, and shared non-competitive resources are some examples. Companies can also cooperate for social good. Saving the environment or working towards improving health and education, while being a reward in itself can gain the company a lot of goodwill among employees and customers.

Even if there is no direct partnership with other firms, companies can learn a lot from competitors. Many companies have the “NIH” (Not Invented Here (syndrome) which prevents them from understanding what competitors may be doing that they could copy and adapt to their environment. Getting rid of that mentality will help organizations grow and attract more customers.

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By Krishna, April 9, 2006

A very important point that gets left out in discussions of leadership is the concept of the necessary knowledge, experience and skills needed to make the right decision. Intuitively, most people associate making decisions with “strong leadership” or “making the hard choice”. Hence there is a leaning towards charismatic leadership. This comes from tradition where the strongest person in the community is usually the best person to lead the community against enemies.

However, in today’s information age, knowledge starts playing a very important role. Let us look at some questions where knowledge and personal qualities work hand in hand in solving some of the problems faced by a typical organization.

1. Does the leader have enough information at his or her finger tips? Does the leader have enough experience to understand whether the information is adequate or sufficient? Does the leader have the qualities (like openness) to ensure that ALL the information is arriving at his or her desk without sugar-coating or misrepresentation?
2. Does the leader have experience with similar situations to make proper sense out of this issue? Does he or she have the discipline not to blindly apply a cookie-cutter solution to all such situations?
3. Does the leader have the knowledge to understand the various systems and processes within the organization and be able to bring them together or break them apart to bring greater efficiencies into the organization? Does the leader have the people skills to get buy-in from employees and customers for the new way of working?

Silicon Valley companies have the biggest problem with lack of business knowledge – frequently brilliant inventors come up with some great ideas, but without proper “adult supervision”, the companies frequently go bust because the companies don’t have the knowledge to run a full-fledged business operation. Companies like Google and Yahoo are the exception rather than the norm and even they have senior CEOs.

Knowledge and experience can be acquired with time and money, but time is particularly important. Most young managers would easily transplant themselves into the CEO’s chair, but without the years of learning and experience, they could very easily fall apart. Any aspiring leader must take the time and effort to get into different scenarios and situations so that they can be ready for the big leadership role.

And this learning has to be continuous. There is an ancient fable (ref: writings of Jawaharlal Nehru) about a person who used to walk around with steel plates around his belly, because he felt that he had learnt so much that he was about to burst with all the information he had acquired. In real life, you cannot learn too much. In fact, it is Darwinian – the more information one receives, the greater the chance of something hitting the nerve and getting implemented. The only thing one has to watch out for is listening to the wrong source or the right source through the wrong filters.

And it is continuous learning. A leader keeps learning about the organizations, its people, processes, customers and stakeholders. A leader keeps learning about oneself – the strengths and weaknesses. And finally leaders must learn to unlearn old habits and thoughts, and learn to let go. Constant churning is what will get the leader to stay in tune with the environment.

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By Krishna, April 8, 2006

If one goes into any discussion about management habits and practices, typically there is a chorus from everyone about the lack of effective management within their organizations. Much of this complaint has good cause because in many organizations, management fails to have the fundamental qualities necessary to build confidence in their decisions. Even when successful, there is a thread of doubt and criticism that permeates the organization.

An organization can be one of two things: It can be breaking down within or it can be looking outward to achieve goals together. Many organizations do not have the fundamentals in place to transition from the first stage and move on to the next. There are “negative energies” that keep the company sliding or prevent it from reaching the next milestone, in spite of having the physical resources and talents to be able to make the transition.

These fundamentals of an organization are termed the “hygiene factor” (a term first coined by Frederick Herzberg) in the sense that similar to cleanliness, a person (or in this case, an organization) cannot do without them. But they are not only the only thing – an organization must have other traits for success. Mazlow’s hierarchy of needs is an example of this. Unless the fundamentals are taken care of, the next level of needs and achievements are difficult to envision, let alone come by.

An example of missing fundamentals is the lack of openness and candor within organizations. Many organizations maintain secrecy about their operations, decisions and management. Sometimes this is done to maintain the power hierarchy within the organization. In many other occasions, the company doesn’t have the systems or processes to effectively obtain and circulate information to its employees.

Manifestations of such lack of candor include poor performance appraisal systems where mediocrity is passed over or even rewarded. Negative energy builds up within the organizations as some employees are working harder to compensate for the weaknesses of others. The lack of attention to quality and results finally leads to brutal decisions like layoffs.

In a closed culture, employees and management are separate, by definition. There is no mutual aligning of goals. There is no clarification or indication of what is wrong and such organizations, for example, Enron and Tyco, quickly fall prey to dysfunction in many forms including corruption. An open culture builds trust. It allows an employee to understand the extent of how his or her actions are contributing to the success of the organization by providing a live scorecard.

What organizations need to do is to first identify and eliminate the negative energies within the organization that neutralize the positive energies that would take the company forward. This is the example of the “First Take the Wrong People off the Bus” (Jim Collins, “Good to Great”).

But it is not JUST people. It is also processes, systems and culture – anything that can interfere with the free flow of ideas, achievement and success in the company. Once companies start doing that, they are now at Level Zero, from which they can start implementing good processes that will start bringing in benefits.

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By Krishna, April 7, 2006

I have always felt that the greatest disappointment in life is “so much to do and so little time”. This is particularly true about reading books. There are literally millions of novels, books, magazines, cartoons, blogs, articles and papers out there. Even if you discount 99% of them as bad quality, that still leaves an enormous amount of material. And when you start thinking of content in other languages, there is a lot one will never get to in a lifetime.

The father of a friend of mine used to collect books like crazy and jam-packed his guesthouse with books. All the cupboards were full. There were books stacked and spread out on the floor. He told me that he was nearing retirement and this was what he intended to do with the free time that he was hoping to have. I hope he was able to achieve that.

Perhaps that is a good way to spend time reading classics that one missed out. But when it comes to business literature, this is not very practical, nor does it make any sense. After all, very few people have the influence or ability to implement good business concepts after retirement, unless they become a business consultant. Probably it may even be terribly disappointing to know the best ways of leadership and management one missed out during one’s working years.

Since one must read now and there seems to be an overwhelming amount of literature out there, how does one get selective about reading? The good news is that there are many tools out there that can help one in this situation. Let us start with the Bestseller Lists published by newspapers and magazines like the New York Times and Business Week.

The basic idea behind using the bestseller lists is to be familiar with the latest contemporary literature out there. For example, “The World is Flat” is one of the most visible books out there and discusses the revolutionary nature of today’s technologies in leveling the business field. There are the best-selling hard cover, paperback and long-running best seller lists. If you are just starting to read, try to cover these as quickly as possible. As I have mentioned in a previous post, a good way to get through some of these books is to get the audio versions of these books.

Try to then start reading some of the textbooks covering some of the areas of your management responsibility. Textbooks cover a lot of theoretical ground and explain concepts, including the ones that are rare, in detail unlike mass-market books. If you are already taking a business management course, definitely try to read the books from front to back.

There is a lot of management theory behind various concepts. A good place to start would be Wikipedia to get a general idea of the concept and then identify the definitive text to read on the topic. This will provide the reader clear understanding of the perspectives and criticisms of the topic. Please also note that many management philosophies have become obsolete over time as globalization, technology and working cultures have evolved. So read everything with a grain of salt.

When it comes to blogs, newspapers and magazines, an initial tendency would be subscribe to more so that you can get “more” information. But remember what we started with – Time is limited. Get your information related to a particular topic from no more than 2 or 3 sources. Periodically examine the horizon to evaluate your sources and check if there are newer ones out there.

Once you start reading regularly, you gain a lot of momentum and can easily understand and appreciate different concepts better. Reading will be much faster and also you will know which writing you should explore further and those which you should ignore or emphasize less.

At this point, a different problem arises – you are collecting enormous amount of information and different concepts. What is the next step in using that knowledge? In a later writing, I will talk about implementation based on distilling the collected information to core concepts.

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By Krishna, April 6, 2006

Books like “Good to Great” clearly demonstrate the correlation between good business practices and organizational success through intense research and actual statistics. For example, Jim Collins talks about humble and strong leadership, getting the right employees and having the correct focus in terms of business strategy.

The “Good to Great” book used information from a set of companies that had made the transition from a “good” company to a “great” company, producing multi-fold increase in revenue, share price and profits. These companies were compared to other companies in their industries who were not able to make the transition. This methodology was also used in the previous book by Jim Collins, namely “Built to Last”.

For quite some time, I have felt a bit uneasy at the statistics relating to the comparison companies in both the studies. I don’t disagree with any findings – I wouldn’t even have the data to agree or disagree with them. But there are some question that arise from thinking carefully through the conclusions of the authors.

The comparison companies only did worse than the Good-to-Great (GTG) companies, but compared to the general market, they performed reasonably well. None of the practices that were followed in the GTG companies were followed in the comparison companies – that was the whole point of the study, anyways.

Does it follow logically that you may not be as successful as you could be, but you could still get along without following the guidelines? Does that imply therefore that you could run a company autocratically treating customers and employees badly and still make reasonable sums of money? Secondly, if the market analysis proved the opposite of the thesis put forward by Collins, would that justify bad behavior?

In my view, trying to correlate good behavior with good outcomes is a slippery slope path. This is similar to the tactics used by certain religious leaders – do good and you will be rewarded. The problem is: what happens if you are not rewarded? What happens if you are on your best behavior and pray every day and still God doesn’t do anything for you? Do you decide to abandon God then? Are your good deeds and prayers just a manifestation of your selfishness? How really sincere are you?

The right behavior come from the right set of values. Do you truly take pride in your work, product and service? Do you really love your employees and want them to have a great workplace? Do you want customers to enjoy using your product? Do it because that is what you want, not because it will translate into money, because then you corrupt your desire. To go back to the religious example, pray or do good because you love God and not because of some crummy materialistic or other-world reward.

As a last word, I don’t really object to such books. There are business leaders whose only desire in the business world is profits and their own bank balance. And there are millions of employees who have to work under them. If a few of them read this book and start developing quality products, treat their employees better and service their customers well, maybe that serves the purpose.

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By Krishna, April 5, 2006

There is a very common management perception that some people just hate change. It seems that those people are very comfortable with the status quo and hence they don’t want to change. Those who say this basically absolve themselves of the responsibility of finding out why there is opposition to change and potentially put the execution of the change at risk.

The truth is that, if you talk with any person working in any organization, you will discover THEIR ideas for change for the organization. They will tell you how HR should operate, how their managers should behave, what their CEO is lacking. Most people do want the status quo to change for the better.

To give another example, consider what would happen if it is announced that the work week will be reduced to 4 days without any change in salary or benefits. That is a change. There would be hardly a person disagreeing with that change. So if people are disagreeing with a proposed change, there should be something about the change itself that makes people oppose it.

I think if each of us looks at our own professional lives, we would see that we have opposed suggestions and ideas from our managers. New bureaucratic procedures are usually something that most people (including me) have continuously opposed. Why? Because we “hate change” or “are afraid of change”? Not at all. It is because we think those new policies are bad or waste time and don’t bring any benefit.

So next time, we judge someone for opposing our suggestion, we should walk in their shoes for a while and figure out exactly what may be causing this opposition. We may find many questions from them, perhaps suggestions for improvements. Always people have a reason – you just have to find out why!