Wednesday, January 9, 2008

The Myth of Best Practices

I constantly hear representations of things that are trumpeted as "best practice". The theory behind most of the trumpeting is that if you implement best practices that worked well for someone else in their context, you too too derive spectacular benefits. I almost expect the pitch to include a set of free steak knives for the next 10 callers.

Save your money.

Save your money that is until you perform a small sanity check. Here is the sanity check. Ask yourself what the critical success factors were that enabled the supposed best practice to work. For instance; How did the best practice resonate with the purpose of the company? How did the best practice fit, support and enhance the brand image of the company? How about the long term... how did the best practice create a substantial benefit for the long range intention of the company? Further, what goal did the best practice help achieve? To what leading indicator of success did the best practice contribute improved performance? Now for the bonus questions. How did the best practice fit and support the company culture? How well did the best practice aid the organizational structure in a way that made work easier to accomplish?

Now if you have all these answers and you are satisfied that what you have going on in your organization is a match for all that context, then fire away. Simply pick up the latest whiz bang book of Jack Welch success stories and go for it.

On the other hand, maybe you should think that over. Perhaps this helps: Before a best practice becomes a best practice, it is a leading practice. A leading practice is something that works quite well in some contexts but has not reached a fad stage. It is innovative. Very few organizations do it. These organizations benefit greatly. Portfolio management with full resource reconciliation and strategic alignment is a leading practice right now. Not many organizations do it, few do it well and those that do reap a huge benefit. Before something is a leading practice, it was an experiment. Before that it was a theory, before that it was an idea. Before that it was an observation. The person that observed that pieces of paper that relate to each other had no way of being temporarily fastened, had an idea about how to fix the problem, generated a theory of making a device to accomplish such a thing, then began to experiment with various means that ended up in the first paper clip did not start with best practices. They started with observations and the generation of theory and immediate action to try things on a small scale. Innovation is not well suited to the adoption of best practices. Efficiency is well suited to the adoption of best practices. Real value in an organization cannot be created through efficiency alone. Innovation is the only thing that can do that.

The constant hammering of best practices in an organization can put you on the cover of Business Week just like it did for 3M. 3M implemented 6 Sigma to the point of almost killing the most precious asset it owned... its innovation culture.

So if you have a bunch of consultants running around your organization implementing best practices, perhaps you should check out if they are curing you or killing you. Perhaps what you need is a better set of observations, ideas, theories, experiments and leading practices

Just a thought.

Tuesday, January 8, 2008

Hey... cut me some slack

One of the most influential books I have read recently (other than my own of course) is Slack by Tom DeMarco. The case Tom makes in this short and powerful book is that organizations have a nasty habit of overloading the system with so many projects and becoming so efficient that they create a situation that is so rigid that change cannot take place. The analogy Tom uses is the puzzle many of us have had at one time or other that has one less piece than a full matrix. The object of the puzzle is to use the slack in the puzzle to order the other pieces in numeric sequence. Fill in that "wasted space" and what you have is gridlock. No change is possible.

I have worked with many organizations that fundamentally suffer from lack of slack. In writing our book "Executing Your Strategy", we attempted to show the critical nature of portfolio management in the execution of strategy. The right projects done right is the theme we are looking to advance. The right projects that cannot be done right because there are too many to do any of them well is probably the most pressing problem of our time.

Small wonder however. Overload has become part of the culture. It has gotten to the point that a conversation cannot be executed for more than 60 seconds before someones instant message or cell phone or text message beeps in with an urgent interruption. Probably something critical like "did you see the YouTube on ...." Maybe another stunning development in the Brittany Spears drama.

We have to get a grip on this, folks. We cannot change our selves or our organizations if we dont create some space to do something creative and transformational. Being booked 24/7/365 is going to be the end of our ability to adapt.

Practically speaking, the only way to break the addiction to being overloaded is to examine the concept of ideation which is the combination of purpose, identity and long range intention. As we wrote in our book, from the examination of why we are here, where we are going and a deeper sense of who we are, we can generate a basis for what to do and what to not do. If we include some slack in our list of things to do, then we might just be able to accomplish something transformational.

So the thought for today is to include some slack in your time planning. Dont worry, it wont be wasted because when you create some slack, you can choose from a broad array of value added things that will come your way. Dont take my word for it... just give it a shot. This technique comes with a "past back" guarantee. If it does not work... you can have your "past back". Guaranteed.

Thursday, January 3, 2008

What to Do About Free Radicals

What happens when a company is acquired by another company and the key intellectual assets just don't seem to mesh with the combined enterprise? What do I mean by intellectual assets you might ask? They are the least accounted for and most precious asset of the company. They are the people who know how the company really works. They are the people that were the reason that the company was worth buying in the first place. You will not find them on the balance sheet. There will be no mention of them on the asset inventory. No dollar value is associated with them directly even though all the dollar value of the organization is a result of the actions they have taken and the decisions they have made. If these people leave or disengage their creative energy, the company stands to lose a great deal of future value. If they remain in the post merger enterprise, I call them "Free Radicals". They are still "free" to do their jobs but are somewhat "radical" to the combined enterprise

Based on my direct observation, this is a critical issue post merger. Most mergers take this into account by way of financial instruments and golden parachutes. Often, people have some financial reason to stay with the enterprise. The problem is that their loyalty and their best creative energy are not for sale. Consider that these people were successful in the old enterprise. That is why they were acquired. But the new enterprise does not see the need to listen to them. After all, they are the acquiring company. They know what is best. Except where they don't.

A significant problem arises when the acquiring company is of a different ideation including a different purpose, a different identity and a different long range intention than the one that the free radicals came from and a storm is not far off. Darwin begins to step in to determine natural selection. Will the free radicals cause the new acquirer to adapt to them? Will the new acquirer cause them to adapt? Both? Neither? This becomes pivotal because free radicals are typically too wise to simply roll over and play dead.

The choices are 1) the free radicals get on the new bandwagon, 2) they remain free radicals in an organization who's antibodies begin to isolate them for extraction 3) They re-invent themselves, 4) They cause a re-invention of the enterprise, or 5) They move on to do something that they like and feel passionate about where they can get what they want.

The impact on strategic execution is that if the strategy of the new enterprise depends on the retention of the free radicals, a leadership intervention is the only thing that will prevent a catastrophic loss of talent and therefore a loss of strategic options. People contribute their best based on their ideation. If the ideation of the free radical becomes incompatible with the new enterprise, the best thing a free radical can do is exit. Incompatibility is not hard to measure. Frustration level, stress level and bottom line positive emotional response versus negative response to being in the organization is the best metric for the free radical to gage their direction. This is not to suggest a "if it feels good, do it" strategy but on the other hand, why would talented people be willing to contribute long term to a cause they do not feel right about?

Many acquisitions do not succeed because the free radicals who are strategically critical are not given enough consideration in the transaction. In business, we have progressed far beyond the acquisition of factories, equipment and fields. We now acquire human networks. And yet our merger and acquisition processes, systems and post merger leadership are still stuck back in the days of trucks and tractors as if people were fungible.

To acquiring companies, I say pay attention to the non-balance sheet assets... they are what you really paid for.

To free radicals I say adapt and stay or quit and leave but do not quit and stay... your energy is best utilized where it does not involve tilting against wind mills.