Increase Your Return On Failure

Increase Your Return on Failure
HBR, May 2016, p88
By Julian Birkinshaw and Martine Haas

Learning from your failures always seems like a good idea and it is usually okay to talk about other people’s failures, we call this gossip, but most people don’t like to talk about their own failures. Talking about one’s own failures can be challenging to one’s own identity. It takes a leader at a later stage of adult development to really learn from failure and become a bigger person instead of retreating into a defensive shell. Such leaders are rare. So how does the organization really learn from failure?

At earlier stages of adult development people use their work as a strong part of their identity so experiencing a failure at work is the same as experiencing a failure of one’s identity and can be devastating. The organizational culture can overcome this by defining the role of a person as including a discussion of their failures. As long as this is kept in a positive vein and not used for punitive purposes then discussing failure can be made a positive part of the workplace culture and therefore part of one’s identity.

The article describes some good processes for learning from failure. What they are really talking about though, is a full on culture change and the article does not frame the processes in that way. The culture of an organization determines how people deal with failures. If it is part of the culture, people at an earlier stage of adult development will adopt the behaviors for learning from failure as long as everyone else is doing this and it is part of their role in the organization. People can adopt a later stage of development without really functioning at that level if they are in an environment that is at a later stage. The environment, or culture, is determined in large measure by the leader of the organization, which is why it is so important to have someone at the top who lives at a later stage of development instead of just giving it lip service. The leader needs to be at a later stage of adult development or the culture will not change and the organization will not learn from its failures.

The article recommends holding post failure reviews, sharing lessons learned through frequent meetings and reviewing all the failures to see if you need to make process changes, which is quite likely. All this, according to the article, must be done in an environment where people feel safe and everyone understands. For most companies this is a full on culture change and most leaders are simply not capable of creating this level of change.

Both-And Leadership

“Both/And” Leadership: Don’t worry so much about being consistent
HBR May 2016, p62
By Wendy K. Smith, Marianne E. Lewis, Michael L. Tushman

F. Scott Fitzgerald said, “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.” The lack of such an ability may preclude one from understanding this article as it deals with tough subjects like polarities, referred to as paradoxes, and dynamic equilibrium. While the material covered here is well presented the reader would have benefitted from a longer, more detailed exposition.

Much has been written about polarities in business and how both sides of the paradox are valuable since they are dependent on each other. Both sides are important to the organization in the long term. One cannot choose one side of the paradox over the other but must, instead, manage the tension between them. Managing the tension requires holding a dynamic equilibrium and the balance between the two sides of the paradox will shift back and forth over time. What must be held is the average balance while keeping the standard deviation to a small value.

The article identifies three common paradoxes and the authors define each of them by a question: “Are we managing for today or tomorrow?”, “Do we adhere to boundaries or cross them?”, and “Do we focus on creating value for our shareholders and investors or for a broader set of stakeholders?” Both of the poles in the paradox are necessary for the long term health of the organization. It is the dynamic equilibrium between them that managers must hold.

To manage a paradox, according to the article, leaders must hold ambiguity as multiple truths, cope with change instead of fighting it and build supporting organizational competencies. The authors recommend separating the two poles of the paradox and then creating linkages between the separate pieces to achieve a dynamic equilibrium. This advice actually creates a static equilibrium with two separate but communicating parts. To create a dynamic equilibrium the organization must be designed to change itself on a continuing basis to reflect the needs of the projects, processes and people within it. This goes beyond a paradox and in many ways resolves the paradox as well. Resources flow to one polarity of the paradox for a while and then reverse and flow to the other in a way that is determined by the needs of each of the polarities and the business. This concept flows readily from change theory.

It takes one of Fitzgerald’s first-class minds to identify the paradoxes that the organization faces and to create the dynamic equilibrium the organization needs. Leaders with a first-class mind are able to identify and resolve the paradoxes described in the article and get the organization to flourish even as the context in which it operates is continuously changing. It takes a serious amount of developmental coaching to become a first-class mind.

Planned Opportunism

Planned Opportunism
HBR, May 2016, p54
By Vijay Govindarajan

Planned Opportunism, according to the article, accomplishes three “things for the enterprise: (1) It creates a circulatory system for new ideas; (2) it develops the capacity to prioritize, investigate, and act on those ideas; and (3) it builds an adaptive culture that embraces continual change.” This article has some good things to say but it is condensed from a book by Govindarajan so it is likely that the book is able to build a more cohesive case for planned opportunism achieving these three things.

What the article suggests is essentially a form of scenario planning: do a deep analysis of all the factors in the organization’s context that affect its operation; identify elusive weak signals that could have a major impact on the enterprise; develop hypotheses about the future; and test the hypotheses with relatively low cost experiments. Scenario planning is a very effective tool for making sense of the future and for providing direction to senior leaders to navigate the perils of the future.

It is not clear from the article that a modified scenario process will result in the three benefits claimed above for the enterprise. Again, this article is adapted from a book by Govindarajan so perhaps that information is in the book. The scenario planning process is worthwhile in and of itself for most organizations and the advice in the article cannot be faulted. Any good scenario planning practitioner can guide executives through the processes described in the article.

Embracing Agile

Embracing Agile

HBR, May 2016, p41

By Darrell K. Rigby, Jeff Sutherland and Hirotaka Takeuchi

One of the problems executives face is that different parts of the organization require different management styles and it is the rare manager who understands this and is able to use multiple styles. The software industry has been acutely aware of this because while production processes and management techniques dominate the management literature, production is only a minor part of a software company. The dominant part of a software company is product development and that requires different processes and management techniques from production. The software industry has worked to develop new management techniques relevant to software development for many years and this article examines these agile methodologies and contrasts their effects on areas of organization outside of software development.

The article highlights the success of agile methodologies and what they have done for the IT industry, even “helping to create a new generation of skilled general managers.” The authors suggest that the greatest problem with implementing agile methodologies is managers who don’t know how agile is supposed to work. The agile methodologies are discussed in enough detail to give one the flavor of their effectiveness. The article shows where agile works in organizations, product development and marketing, and where it does not, finance and accounting, but does not give a theoretical basis for the distinction. Instead they suggest that each department be allowed to make its own decision about whether to use agile or not based on the preference of that department’s manager. For implementing agile, the article recommends starting small, getting senior managers to do it too, allowing experienced teams more freedom and removing barriers to spreading agile within the organization.

Agile methodologies are a step in the right direction and as managers move toward an agile management style, from a command and control one, they require a significant amount of coaching, personal growth and support. Agile changes the culture of an organization and the managers must become different people to be effective.