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Sunday, February 3, 2013

Continuous change and Innovation

I read several great articles recently on the subject of continuous change and Innovation. Here are three of them that I found very interesting.

1/ On the notion of Fair Process

This article is very interesting. It emphasizes the fact that "People are sensitive to the signals conveyed through a company’s decision-making processes. Such processes can reveal a company’s willingness to trust people and seek their ideas—or they can signal the opposite".

The Three Principles of fair process

Here are the three principles provided by the authors:
  1. Engagement means involving individuals in the decisions that affect them by asking for their input and allowing them to refute the merits of one another’s ideas and assumptions. Engagement communicates management’s respect for individuals and their ideas. Encouraging refutation sharpens everyone’s thinking and builds collective wisdom. Engagement results in better decisions by management and greater commitment from all involved in executing those decisions.
  2. Explanation means that everyone involved and affected should understand why final decisions are made as they are. An explanation allows employees to trust managers’ intentions even if their own ideas have been rejected. It also serves as a powerful feedback loop that enhances learning.
  3. Expectation clarity requires that once a decision is made, managers state clearly the new rules of the game. Although the expectations may be demanding, employees should know up front by what standards they will be judged and the penalties for failure.
Notice that fair process is not decision by consensus. Fair process does not set out to achieve harmony or to win people’s support through compromises that accommodate every individual’s opinions, needs, or interests. While fair process gives every idea a chance, the merit of the ideas—and not consensus—is what drives the decision making.
Nor is fair process the same as democracy in the workplace. Achieving fair process does not mean that managers forfeit their prerogative to make decisions and establish policies and procedures. Fair process pursues the best ideas whether they are put forth by one or many.

The (High) Price of Unfairness

Historically, policies designed to establish fair process in organizations arise mainly in reaction to employees’ complaints and uprisings. But by then it is too late. When individuals have been so angered by the violation of fair process that they have been driven to organized protest, their demands often stretch well beyond the reasonable to a desire for what theorists call retributive justice: Not only do they want fair process restored, they also seek to visit punishment and vengeance upon those who have violated it in compensation for the disrespect the unfair process signals.
Lacking trust in management, employees push for policies that are laboriously detailed, inflexible, and often administratively constricting. They want to ensure that managers will never have the discretion to act unjustly again. In their indignation, they may try to roll back decisions imposed unfairly even when the decisions themselves were good ones—even when they were critical to the company’s competitiveness or beneficial to the workers themselves. Such is the emotional power that unfair process can provoke.

Difference between Distributive Justice and Procedural Justice

It exists to complementary paths to performance. But procedural justice is the one to use to achieve better engagement and nurture innovation.

Sources

Amazon: Fair Process: Managing in the Knowledge Economy (HBR OnPoint Enhanced Edition) 

2/ Netflix’s company culture document

From the article: Facebook’s No. 2 top dog, COO Sheryl Sandberg, recently said that Netflix’s company culture document “may well be the most important document ever to come out of the Valley.” The document, a bullet-point-happy PowerPoint, has become a cultural manifesto for the Internet’s economic epicenter, amassing over 3.2 million views on Slideshare.net.
Here are the most striking points.
  • Creativity is Most Important: In procedural work, the best are 2x better than the average. In creative/inventive work, the best are 10x.
  • Prioritize Discovery Over Job Security: Many people love our culture, and stay a long time. They thrive on excellence and candor and change….Some people, however, value job security over performance, and don’t like our culture. Politically, this principle is the most fascinating: no major Internet company has a union, despite consistently ranking as some of the best places to work. Creative enterprises have been able to replace the long-cherished values of worker compensation and stability with a challenging, enjoyable environment. “Risk” is an often-praised characteristic of tech founders, who are now asking their employees to jump down that same rabbit hole. The future of work is likely to be as insecure as it is unforgivable. For some, this is utopia…for others, not so much.
  • Poor Employee Behavior Is Caused By Misunderstanding: Managers: When one of your talented people does something dumb, don’t blame them. Instead, ask yourself what context you failed to set. High performance people will do better work if they understand the context. Hierarchical 20th century management structure was modeled off of authoritarianism, a philosophy based on the idea that individual disagreements can only be settled through power. Netflix takes precisely the opposite approach–that workers normally operate under consensus. Acting “stupid” is actually caused by a failure of communication. It is a profoundly different view of human nature.
  • Unlimited Vacation: Netflix Vacation Policy and Tracking. There is no policy or tracking. Employees are left to decide when and for how long they should go surfing in the Caribbean. Netflix also proudly replaced the entire bureaucratic apparatus sounding travel expenses with five words, “Act in Netflix’s Best Interest.

Sources

Slides : http://fr.slideshare.net/reed2001/culture-2009

3/ Cultivating Outraged

This article written in French is from Pierre Pezziardi, 41, co-founder of Octo and the founder of Octopus Microfinance (a leading ERP microfinance). He helped also to launch Babyloan, a microfinance peer to peer platform . He was previously, CIO of BRED Banque Populaire, where he deployed techniques and culture of Lean Management.

On change Management


For this, he applied a quite simple theory: there is no change prompted by the above, there are only changes  wanted, and desired by the bottom, that converge with the interests of the above. So when you want to make a change, the emergence of new things, we must look to the presence of two factors:
  1. a place where problems are (quality, cost, time ...)
  2. the presence of a person who wishes to sincerely address them.
If you do not have these two properties, if you do not have people who are outraged by the situation, do nothing! So hunt for indignants. Other can recognize an issue, but they will not be willing to fight and take risks to find solutions.

You need to empower indignants. This will annoy others, of course, because it breaks "the status quo" (poor quality call center, poor in this mammoth project, poor quality in ...). Status quo is the result of the organization as it is, and in a bureaucracy, this is what is reinforced. Whoever says "I do not agree, I am outraged, it could be otherwise" is a renegade who takes a lot of risks, including ostracism, of being seen as a barbarian who endangers the sustainable equilibrium of the organization.

The challenge is then to protect and support outraged, without replacing them (no substitution, he should do the job). The best equilibrium seems to be 80% of coaching (protection, how to behave) and 20% of consulting (how to make things happen by  "inflicting help").

In order to make thinks happen, you have to do small steps, instead of big plan. The small steps are made to react to problems (Kaizen). The 5 why technique is used to understand the roots of the problem. Then, the PDCA (Plan-Do-Check-Act!) is used to follow actions made, results and decisions (yes it should be tracked).You could make mistakes, that's why you have a checking phase before acting.

You are part of a system or building it, and you will improve it step by step in order to create value for your internal or external client. he main objective is client value. So everything is done in order to make people better understand how things work, why decisions are taken, improve trust but, the root of all this is generating value. This is what the author called the "lean culture", to be dissociated with the lean tools ...

Sources

Article: from LesManagersIT, here