Tightening the feedback loop with insourcing

Dec 10, 2012 by

A recent blog post by Kellogg School of Management professor, Marty Lariviere, highlights the transition that GE Appliances is making to “insource” manufacturing from China to the U.S. Discussion of insourcing strategies is plentiful nowadays and there are those who believe it will not workApple recently announced a move to insource some elements of Mac manufacturing. What’s different is that while Apple’s effort appears to be an attempt at improving their public image even at the expense of profits, GE has already realized many benefits to their bottom line.

Over the years, labor and resource costs in China have increased as have transportation costs to bring finished goods back to the U.S. A reduction in these costs would be an obvious benefit but, as Lariviere points out, GE has experienced deeper benefits which have further reduced costs.

Manufacturing in the U.S. has enabled GE to get products into the hands of consumers more quickly but a greater follow-on benefit is that less inventory in the pipeline enables GE to react more quickly to unforeseen changes in the market. In other words, GE has become more agile.

Geographically distributed development is very hard. In the case of the Geospring water heater, GE was unable to overcome a serious lack of communication between product designers in the U.S. and engineers on the factory floors. By bringing the two teams closer together GE was able to leverage greater collaboration which increased innovation enabling the design of a less complex product that required less parts and was therefore quicker to build.

At the core of both of these transformations is the improved execution that comes from a tightened feedback loop between collaborators and between producers and consumers. Lariviere calls this out with a quote from the Atlantic article, “Mr. China Comes to America.”

Insourcing may not be the answer for all globally distributed teams but there can be clear benefits when fundamental enablers of execution are improved.

Is it okay to be a jerk if you achieve great things?

Jan 1, 2012 by

Since the passing of Steve Jobs the world has been reading a lot about how he was a total jerk. By all accounts he wasn’t just like this at Apple but also acted like an asshole in his personal life too, berating nurses, doctors, waitresses and anyone else who was unfortunate enough to raise his ire. By refusing to put a license plate on his car and routinely parking in handicapped spaces he demonstrated how he thought rules didn’t apply to him.

In praise and defence of Jobs’ behavior are those who have said that we need more jerks in business and those who aspire to be more of a jerk like Jobs was. On the other side are those who point out that in studying Jobs, the worst business lesson one could learn from is the way in which he interacted with others. While he might have been effective as a leader he was a terrible manager and not a model to emulate. Finally there are those who have called Jobs plainly a bully and a cry-baby and a monster who should only be remembered as a jerk.

Of course Jobs was not the only jerk in the workplace. Today there are many other leaders who act like Steve Jobs in business, sports, arts and other domains. Each instance of tolerance for their behavior is an example of entertaining an ego.

Was Jobs’ behavior justified given that he achieved such great success and inspired others to achieve great success? Those on the outside who have benefited from using Apple’s great products and those who interacted with Jobs and came away without permanent scarring might be willing to overlook Jobs’ transgressions. However those who came away from their interactions with Jobs with a bitter taste in their mouth and recurring nightmares may be far less forgiving.

Let’s be clear: Jobs was verbally and emotionally abusive.

Research suggests that the behavior of abusive bosses like Jobs is often overlooked when they are successful. Other research shows that bullying in the workplace may more prevalent than we think.

It’s entirely possible to inspire others to do their best and to hold people to extremely high standards without being a jerk. You can say something is shit without saying those exact words and without belittling someone let alone doing it in front of others. I have been a jerk at times and I have worked for jerks and with jerks and I have seen how some people subjected to the abuse of jerks remain detrimentally affected years later. I have also been verbally abusive in a domestic relationship even though I did not know it at the time and it was not my intent to hurt my partner yet I did. In domestic abuse people are advised that emotional and verbal abuse can be at least as bad if not worse than physical abuse. While injuries from physical abuse may heal and leave no permanent scars, bludgeoning of the psyche can take a take a lot longer to remedy and may even leave people scarred for life.

Many others have achieved great things in their lives and inspired others and they were able to do it without being jerks. There’s simply no excuse for being a jerk.

Ten ways to kill productivity and passion: 10) Bamboozle with bullshit

Dec 31, 2011 by

This is the tenth and final post in a series about common problems that can lead teams to fail or otherwise limit their success. The previous post in this series was 9) Frustrate with friction.

In this series we’ve discussed many ways in which organisations kill productivity and passion: excessive bureaucracy, suppressing individuality, expecting that people simply work harder to overcome fundamental problems, boxing in high performers, setting unrealistic goals, motivating people the wrong way, hoarding leadership, putting the desires of individuals ahead of the team, and letting a multitude of little things impede productivity.

In many organisations these problems never get fixed. What makes it worse is when leaders claim to understand the problems and predict that things will get better but nothing ever improves even as new leaders, new programs, and new initiatives come and go. Note that change doesn’t necessarily equate to improvement. In fact change may even be for the worst.

A big part of the problem is that many leaders have difficulty being truly honest. Sometimes they can’t even be honest with themselves. They may be in complete denial like the leadership at RIM, and in RIM’s case it has happened before, or they may truly understand the challenges but may be unable make things better. One of the downsides of rotating executives is that leaders in for a short, fixed term may not have enough time to gain a deep understanding of issues and effect the necessary change. They may also be unwilling to take the risk of screwing up royally when their career has momentum. Sometimes leaders want to make changes but they don’t have support from others including their own leaders.

When leaders can’t be honest their superficial motivations and unrealistic declarations of future improvement may not ring as true as they think. Often, the people in the trenches, mainstays while leaders come and go, have seen and heard it all before and they know when they are being bamboozled with bullshit. If consulted they may have useful reality checks to offer. On the other hand, after years of looking at things through the same lens they may be in need of a fresh perspective. Either way, the only way to come up with a realistic plan is for everyone to be completely honest and open while collectively forging strategies that can be really be implemented successfully.

Ten ways to kill productivity and passion: 9) Frustrate with friction

Dec 31, 2011 by

This is the ninth in a series of ten posts about common problems that can lead teams to fail or otherwise limit their success. The previous post in this series was 8) Entertain egos.

Friction slows things down. If you roll a ball along a flat and level surface it will eventually stop as a result of rolling friction. A ship sailing through a body of water is slowed by friction caused by the movement of the hull in the water. An aircraft flying through the air is slowed by the friction of air resistance. Even in space friction will act on a moving object. Although space is generally described as a vacuum, it is not a perfect vacuum but one in which very small frictional forces are at work.

Although friction impedes progress it is necessary for healthy operation. While rolling friction will slow down a rolling ball, without static friction the ball would slide and not roll at all. Without traction created by adhesive friction between tires and the surface of a road, the wheels on your car or bike would simply spin you would get nowhere. Static friction ensures that objects sitting on your desk don’t slide off surfaces that aren’t perfectly level while also allowing you to walk by converting a backwards push of feet along the ground into forward motion. In music friction is tension produced by the use of techniques such as harmonic and melodic dissonance and rhythmic syncopation. Without that friction the music would be uninteresting. In collaborative interactions friction is generated as a result of discussion. There is always the potential that such interactions can degenerate into heated arguments but without healthy discussions a team may make bad decisions or fail to exploit opportunities. Friction is generated when rules and procedures must be followed. When the legal department must review the publication of a document the requirement generates friction that slow things down but failing to obtain such a review may expose the organisation to risk.

We can all find multiple examples of friction in our daily work. When work begins on a new project all those involved must agree to commit to the work and resources must be secured. How hard is to obtain these commitments? In the course of contributing content to a project, whether it be code, documents, music arrangements or anything else, tools are often used to create and manage content. How much work is involved in using such tools? If multiple tools must be used how well do they integrate with one another? In teams everyone’s individual content contributions must be integrated into a meaningful collective product. How hard is it to do this? In software development this is achieved by running builds and tests. In the course of collaborating with others, how much effort is required to track what others are doing? What about soliciting and obtaining feedback on work in progress?

The workings of many organisations are impeded by excessive friction because things that don’t seem like a source of friction can become a big problem when there is repeated execution. Prussian general, Carl von Clausewitz, wrote about this in his early 19th-century treatise on military strategy, On War:

“Everything is very simple in war, but the simplest thing is difficult. The difficulties accumulate and end by producing a kind of friction that is inconceivable unless one has experienced war…

Countless minor incidents – the kind you can never really foresee – combine to lower the general level of performance, so that one always falls far short of the intended goal…

Friction is the only concept that more or less corresponds to the factors that distinguish real war from war on paper….

Friction, as we choose to call it, is the force that makes the apparently easy so difficult.”

Excessive friction is arguably the greatest impediment to execution and consequently the greatest obstacle to success. However the impact of excessive friction often takes its toll over a long period of time. In most large organisations excessive friction is the result of long-standing methods that are ingrained into the standard ways of working and people may be reluctant to alter such traditions. Meanwhile, people become frustrated especially when they can clearly see the source of the friction and ways in which it could be reduced.

To avoid frustrating your teams and improve efficiency figure out where excessive friction is generated in your organisation and work at reducing it.

Ten ways to kill productivity and passion: 8) Entertain egos

Dec 28, 2011 by

This is the eighth in a series of ten posts about common problems that can lead teams to fail or otherwise limit their success. The previous post in this series was 7) Isolate initiative.

As I wrote earlier in this series in 2) Inhibit individuality, one of the most effective ways to build and run a high performance team is to leverage individuality. A focus on individualism begins by valuing individual talent. While sports teams and artistic ensembles go to great lengths to attract and retain top talent businesses often view people as interchangeable, easily replaceable generic workers. This perspective breeds “mirrortocracies” as people tend to hire or promote others who think and act like themselves instead of appointing those who might possess sorely needed contrasting skills or perspectives. While it might be harder to integrate diverse skills, experience and perspectives into a team, such collectives are more robust in the face of unexpected or significant challenges and the combination of complementary talents is more likely to yield synergy. One virtuoso may be able to do what hundreds of other lesser talented people cannot. Similarly one person with a different skill or perspective may provide a breakthrough or expose a previously unidentified problem. Diversity helps to avoid problematic extremes such as groupthink, a psychological phenomenon in which teams miss opportunities or make costly mistakes even to the point of overlooking evidence that they are collectively making a bad decision.

In order to truly leverage individuality organizations must decentralize leadership and give people autonomy so they can each take the initiative and lead on demand, perhaps showing the way to a new innovation or identifying a reason not to pursue a particular path. Decentralized leadership requires a minimalist approach to rules and process with the goal of eliminating bureaucracy, micromanagement and the excessive friction that plagues so many large organizations. The trick is to provide just enough structure so that a team and its projects can remain stable while giving people the freedom to excel as individuals.

This approach is clearly evident in jazz where individualism is celebrated. Jazz musicians in a band each play unique musical roles and contribute their individual improvised expressions. Even in large, highly organized ensembles such as a jazz orchestra, every musician plays an individual part whereas in a classical orchestra many parts are played by multiple musicians. Unlike the hierarchical, centralized command and control model of a conductor, leadership in jazz is constantly reassigned on demand. This happens between performances with musicians acting alternately as leaders and sidepeople on various gigs even with the same group of musicians. Leadership is also constantly changing during the performance of a musical work. In jazz, the musical rules of harmony, melody, rhythm and even form are malleable. Musicians will bend these rules or break them in order to pursue artistic innovations.

Individualism in a team can bring great rewards but when individuals become more important than the team project and team health can suffer. This can cause instability and perhaps even a complete breakdown in operations. Building a team composed of amazing virtuosi who can’t subjugate or blend their egos is a recipe for disaster. High-performance teamwork requires a tradeoff between virtuosity and collaboration. Jazz musicians are constantly improvising and innovating but they always keep things together because they put the team first. Even though leadership in jazz is constantly changing it is very rare for conflicts to occur even though the decisions to lead or to follow must often be made within fractions of a second. Frank Barrett, in his paper, Creativity and Improvisation in Jazz and Organizations: Implications for Organizational Learning noted that in jazz: “It is not enough to be an individual virtuoso, one must also be able to surrender one’s virtuosity and enable others to excel.” Jazz pianist, Oscar Peterson, said it best: “It’s the group sound that’s important, even when you’re playing a solo. You not only have to know your own instrument, you must know the others and how to back them up at all times. That’s jazz.”

The importance of team unity is well understood in sports. Baseball legend, Babe Ruth, said: “The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.” U.S. National Basketball Association coach, Phil Jackson, in his book Sacred Hoops: Spiritual Lessons of a Hardwood Warrior, noted: “Our society places such a high premium on individual achievement, it’s easy for players to get blinded by their own self-importance and lose a sense of interconnectedness, the essence of teamwork.” This is the challenge for those that build and lead teams. As Jackson noted: “This is the struggle every leader faces: how to get members of the team who are driven by the quest for individual glory to give themselves over wholeheartedly to the group effort. In other words, how to teach them selflessness.”

While achieving this delicate balance is clearly important for teams where egos may be at large, even a team with well-tempered personalities can benefit from a team-centric perspective. The goal is to function in synergy and not simply as a group of talented individuals. A failure to do this can cause injuries to team health that may never heal. The Beatles, The Supremes, Guns ‘N Roses, Pink Floyd, The Mamas and the Papas, and Van Halen are all bands that were once world-class performers but fell apart because individuals became more important than the team. When leaders entertain egos, whether it be their own or others, poor performance can be the least of their problems.

Ten ways to kill productivity and passion: 7) Isolate initiative

Jan 16, 2011 by

This is the seventh in a series of ten posts about common problems that can lead teams to fail or otherwise limit their success. The previous post in this series was 6) Manufacture motivation.

Who are the leaders in the various teams and organizations in which you work and play? Most people can respond to this question with a short list of people and in most cases the responses from members of a team will be consistent. The answer is usually obvious because we label people as leaders with titles. Conductor, manager, captain, CEO, pastor, teacher, prime minister, chief executive rabbit and so forth. In some cases people bestow these labels and responsibilities of leadership without knowing what leadership is. Some claim leadership is about vision while others claim it is about influence or simply having followers. Leadership is arguably all of these things and more. I believe, however, that over the years, the concept of leadership has become way too complicated. Quite simply, one specific point defines leadership more than anything else: taking initiative.

When you think about leadership in this way, everyone should be a leader because everyone in a team can and should take initiative. People should speak up when they believe their team should take a different path or when they see problems that the team should react to. The more people that can do this the more effective the team can be. Of course there is a potential downside: if everyone is always trying to take the team in different directions, the result might be chaos. Yet jazz musicians manage to make this work in small groups all the time. They are constantly switching between roles of leading and following, working variously as leaders or as “sidepeople” on different gigs. However this dynamic reassignment of leadership also occurs during performances. The leader of a gig might choose the tune and count it off, but at various times during the performance, different musicians take on leadership roles, and others follow as necessary. This happens most obviously when jazz musicians take turns performing as soloists and then provide accompaniment for another musician’s solos. However, the reassignment of leadership occurs even more frequently and less obviously than that. Sometimes even for just an instant, a musician who is currently playing as an accompanist may take on a leadership role to direct a specific change in the music. Jazz musicians simply cannot let leadership roles remain statically assigned if they want to create interesting, innovative music.

The key to avoiding chaos while encouraging everyone to take initiative is in staffing teams with people who are always mindful of the health and performance of the team and its various projects and instinctively know when to lead and when to follow. Decentralized, dynamic leadership is become increasingly more common as organizations must move faster and respond to the unexpected. Not surprisingly, the larger an organization, the harder it can be to successfully decentralize leadership. Jazz musicians can decentralize leadership in a small group but a symphony orchestra needs a conductor to act as a single command and control point. Yet there is a big difference between a conductor who actively encourages the musicians to speak up and thoughtfully considers their suggestions and one who acts like an overbearing maestro and insists that he or she knows everything. In education, Jacques Rancière’s classic 1991 book, The Ignorant Schoolmaster: Five Lessons in Intellectual Emancipation, suggests that teachers must consider themselves as equals of their students. Teachers should not simply direct students but should facilitate discussions in which anyone can lead and help others to learn. In aviation, the field of cockpit resource management studies the teamwork that takes place in large aircraft with multiple people in the cockpit. Researchers at NASA’s Ames Research Center studied the underlying causes of pilot-error accidents in the mid-1970s. Their research involved interviewing airline crew members and observing flight crews exposed to potential accident situations in simulator experiments. The NASA researchers learned that pilots are far more likely to make mistakes when they rush to action instead of waiting to obtain more information, which they often can get from other team members.

Decentralizing leadership doesn’t mean that you must completely do away with all semblance of organizational hierarchy but it does mean that leaders must avoid isolating initiative to a small group of people. When leaders straitjacket people with restrictive command and reporting structures, they inhibit creativity and agility and limit their organization’s ability to respond to change. The path to success lies in giving up control and encouraging people in all parts of an organization to take the initiative.

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