Friday, February 27, 2009

The Woman Who Ate Light, a poem by Bill Meissner.

Bill Meissner is the Director of Creative Writing at St. Cloud State University in St. Cloud, Minnesota and the author of six books. His writing has appeared in more than 200 journals, magazines and anthologies. His numerous awards include a National Endowment for the Arts Creative Writing Fellowship, a Loft-McKnight Award in Poetry, a Loft-McKnight Award of Distinction in Fiction, a Minnesota State Arts Board Fellowship, a Jerome Foundation Fellowship, and five PEN/NEA Syndicated Fiction Awards.

Meissner's hobbies and interests include travel, rock & roll music, and sports, especially baseball, football, frisbee, and snorkeling. He is the proud owner of (approximately) 21 manual typewriters, including his surviving Royal Quiet De Luxe, upon which he types letters and commentaries on his students' poems and stories.

I've always particularly liked this poem of his.

The Woman Who Ate Light by Bill Meissner.

Each evening she set her alarm to ring just before sunrise.
She was ready to break the first ray of light
in half and eat it,
a long yellow loaf of bread.

But years of waiting through the long blackness
made her anxious,
so one night she twisted the bright light bulb
from the ceiling
put it in her mouth.
This is not as good as light, she thought,
but it will do until dawn.
She chewed and chewed
on glass and filaments,
savored them
until she tasted sweet juices.

Her friends told her she should live on darkness instead,
because nights last longer than days.
No, she answered, light
has a better flavor.
Some day I will give birth to light, she told them,
some day I will raise a whole house full of it.

They laughed at her, but she is happy
just to lie in her bed at night
and watch the smooth round skin
of her stomach glowing, growing.

Thursday, February 26, 2009

More management lessons.

The greater the amount of choice people have in any situation, the greater the need for leadership. My experience pointed to four value-driven influences on a manager’s effectiveness as a leader:

- the manager’s commitment to the company’s goals (which depends on their clarity and congruence).

- the manager’s understanding and appreciation of subordinates' values, needs and expectations.

- the subordinates respect for the manager’s values and competence (otherwise known as “charisma”).

- the manager’s personal effort and capability.

I found the secret to developing effective leaders was to create conditions where people could find out where their natural leadership qualities came from through challenge, on-the-job experience, accountability, feedback, and introspection. The learning process had to be emotionally engaging, putting people at risk while working on business projects that really mattered. Leadership is about ambiguities, not certainties. Successful leaders engage others in exploring all sides of the dilemmas they face.

As a leader, your personal style and perceptions will directly influence your success. To the degree you can recognize and shape your own style, you will be more in control of what happens. By recognizing your own tendencies and then consciously modeling the ideal, you’ll be better able to influence others.

For leaders to be successful in entrepreneurial companies, they must have energy, vision, hustle and selling skills. They have to compartmentalize their fears and doubts, and be comfortable with ambiguity and lack of clarity. They need to believe in what they’re doing with a passion that overcomes doubt.

Being an effective leader today is a lot like mountain climbing. There’s a popular alpine climbing manifesto that goes like this:

- If you’re not hungry, you’re carrying too much food.

- If you’re warm, you have too many clothes.

- If you’re not frightened, you have too much gear.

- If you get up your climb, it was too easy anyway.

If you’re into alpine climbing, you have to spend much of your time being cold, hungry and frightened. And you have to fail occasionally. The best climbs, according to mountaineer Mick Fowler, are those you either “just” get up or “just” fail to complete. And, even if you miss by a mile, there are still lessons to be learned.
So it is with leadership.

Wednesday, February 25, 2009

Management lessons contd.

Learning by analogy:

Managers of self-organizing entities learn by looking at the environment, finding underlying patterns, and remembering the patterns they encounter. They learn to recognize these patterns even when they’re distorted or incomplete. With a big enough library of patterns learned through experience, they can guess what to do with any unique, one-off patterns they encounter. If they can figure out how current situations or problems are similar to previous ones, then they can improve planning by looking up a general plan for solving a range of similar problems and applying some or all of the general plan to the specific problem.

Staying focused:

Traditionally, we’ve looked for elegant solutions that achieve powerful results with a minimum of irrelevant complication. Today, we have to live with adaptive challenges - problems without any apparent solution. “Kobe Bryant is so good because his ability to remain relaxed and focused in the midst of chaos is unsurpassed,” according to the LA Laker's coach, Phil Jackson. Detatchment results in clarity. As the martial arts demonstrate, it allows people to accomplish more, becoming fast on their feet and using more force with less effort. Iraqi veterans report that once they accept they're likely to be killed, they relax. As a result, they're more attentive to what's happening around them which, paradoxically, makes them less likely to be killed.

Providing active leadership:

A leader is the one who persists in saying, “We’re going the wrong way,” even as others are saying, “We’re making excellent time.” Leaders express a strong point of view; as Tom Peters once said, “They’re tough suckers.” Leaders need integrity, balance, and judgement. They have to have the ability to persuade and help others to change. Good leaders liberate the leader in others. They reflect people’s innermost hopes and beliefs in a public way. They have an infectious enthusiasm that causes people to do more than they would otherwise do. Great leaders spot seemingly unrelated things and bundle them together into an actionable proposition. Leaders must have character. According to General Norman Schwarzkopf, “Leadership is a potent combination of strategy and character. But if you must be without one, be without the strategy.”

Developing broad interests and capabilities:

A poet must embrace many tasks, not the least of which is making all the parts of a poem fit together. The challenge is not just to create a memorable turn of phrase, but to be true to the essence of the poem as a whole. Systems thinking involves an understanding of the connectedness of different parts of a business to one another and to the environment so that the full pattern of change becomes clearer. It takes a multitude of disciplines to master solutions that will win. Todays experts are the ones who can see or find out how things relate, not those with the most facts. They have value because they can show others what’s significant. Their expertise is less about having content and more about knowing how to help people look. Managers need to think in terms of whole systems, seeing their business as part of a wider environment. Companies must look beyond their own communities to find new ideas that will prevent employees, partners and customers from defecting.

Tuesday, February 24, 2009

Learning from outstanding executives.

The quickest way to become an old dog is to stop learning new tricks. One of the pleasures and benefits of working on large startups for the past 30-years has been an opportunity to learn from the thinking and actions of many truly outstanding executives. I'll share some of the capabilities that made them so successful this week. I think of these when evaluating the progress of our new president as he aspires to move quickly on many fronts at once in a very volatile world.

Creating a common world view:

One of the more important management skills today is the ability to differentiate between where incremental change is appropriate and where radical change is needed. To conceive of a different world is senior management’s most imaginative and important act. A world view orders reality by giving it meaning, thus allowing the development of “taken-for-granted” meaning sets. When they share a common world view, members of an executive team can move forward together quickly by taking independent but consistent actions.

Sharing values:

Values stem from people’s previous education and experience, sentiments, attitudes about themselves, the obligations they feel toward others, and their ideals and objectives. For each of us, reality is whatever our values allow us to recognize. We tend to reconfirm our values in any situation by selecting from those factors which are consistent with our values and ignoring others which conflict with them. We see only what we expect to see, and therefore reinforce the assumptions and preconceptions which we use as standards for evaluating our observations. When people see things only from their own point of view, the actions of others which are inconsistent with their values seem stupid or unexplainable to them.

Appreciating new metaphors:

A ruling metaphor is used to describe and organize fundamental relationships. When something is new, people wonder how it’s going to fit into the old. They’re bogged down in the metaphors of the past and can’t understand something new that’s outside their current experience. They don’t know how to integrate new messages into familiar patterns of thinking and behavior. We transpose knowledge from one situation to another by means of metaphors and thus build on what we already know or what's already known by others. In an increasingly digital world, we need to move our metaphors from mechanical to biological images.

Being reflective:

Reflective means open, able to take in views and opinions other than our own. Dan Keily, one of America’s premier landscape architects, says that keeping an open mind is what keeps him in business. “On a lot of projects, something doesn’t come out right, either through your own fault or somebody else’s. But often the corrective measures turn out to be better than the original plan. It’s all part of the process of growth, which is what nature is all about. The design gets better the more open and accepting you are because then it’s not static. It’s coming out of life in action. La Corbusier said that creativity is a patient search. I think it’s also a joyful discovery.” The faster the rate of change, the more reflective we must be.

Tomorrow - learning by analogy, staying focused, providing active leadership, cultivating broad interests and capabilities.

Thursday, February 19, 2009

Stopping by Woods on a Snowy Evening, a poem by Robert Frost

Another poem this week by Robert Frost, and this is another of my favorites. Frost once said that, "Education is the ability to listen to almost anything without losing your temper." The following chronology may explain why he held this opinion:

1879 – Frost attended kindergarten, but went home after one day suffering from nervous stomach pain and did not return.

1880 - Attended first grade, but soon dropped out again.

1881 - Entered second grade.

1882 - Dropped out of school and was educated at home.

1885 - Father died of tuberculosis on May 5, leaving family with only $8 after expenses were paid. Family moved to Lawrence, Mass. to live with grandparents. Entered third grade after testing.

1886 - Moved to Salem Depot, New Hampshire, where mother taught the fifth to eighth grades. Frost entered the fifth grade.

1888 - Passed entrance examinations for Lawrence High School in June. Enrolled in "classical" college prep program.

1889 - Finished school year at head of his class.

1890 - First published poem, "La Noche Triste," based on an episode in Prescott's Conquest of Mexico, appeared in the Lawrence High School Bulletin in April.

1891 - Passed preliminary entrance examinations for Harvard College.

Stopping by Woods on a Snowy Evening by Robert Frost

Whose woods these are I think I know.
His house is in the village, though;
He will not see me stopping here
To watch his woods fill up with snow.

My little horse must think it queer
To stop without a farmhouse near
Between the woods and frozen lake
The darkest evening of the year.

He gives his harness bells a shake
To ask if there is some mistake.
The only other sound's the sweep
Of easy wind and downy flake.

The woods are lovely, dark, and deep,
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.

Lessons from Romeo.

The pay system at Romeo was also designed in a different way from the traditional "pay for the job and seniority" system. Machining and assembly technicians were paid based on an Ability Rate Progression System which was unique in the Ford/UAW system. Rate adjustments were based on completion of core training and task certification demonstrating that employees had progressed to higher levels of capability. All employees were required to rotate assignments in order to reach the top of their progression schedule. This also assured that they continued to remain proficient in using the certified skills they were being paid for.

The new structure was also used in support areas, such as Quality and Systems Services, Central Maintenance, Employee Relations, Material and Production Services and Finance. Staffing in each of these areas was considerably less than it would have been in a traditional engine plant. In Quality and Services, there were no checkers or inspectors. Instead, the Quality Services function worked with outside suppliers to assure their production processes conformed to Romeo Quality (RQP) standards. For example, central Maintenance was responsible primarily for construction, equipment installation and maintaining plant utility services. The primary purpose of each of the support groups was to assist rather than control how the production teams performed their jobs.


The results of these efforts have been dramatic, particularly in area of quality to the customer. In terms of TGW or “things gone wrong," the quality of the Romeo engine represented a 75% improvement over those produced in previous launches, according to new vehicle customer surveys.

Romeo today sits on 268 acres and the plant, after several expansions, now totals 2.2 million square feet. Last year, the plant produced 682,000 engines, an average of 3,000 per day, and it has produced nearly seven million engines since production began in 1990.

It continues to employ more than 1,300 men and women. After 300 layoffs last August, Ford announced in December '08 it would create additional shifts at the Romeo Plant, despite widely reported financial troubles facing the automaker. The new shifts followed from the company’s decision to increase production of one of its major products.

Romeo has been recognized by the American Society for Training and Development as having the best team training program in North America. The plant also won the prestigious Shingo Award for Excellence in Manufacturing in 2002.

Today, almost 20-years after startup, the Romeo organization continues to build the highest quality engines in the world. However, these proven ideas have been slow to be adopted by the company's seven other engine plants, let alone in other divisions. In part, this comes from the inherently competitive nature of the hierarchical corporate system where managers are pitted against each other for recognition and promotion. This encourages them to find fault with each other and to deny the validity of superior methods and practices. The culture says, in effect, "If you look good, then I look bad." As a result, there's little shared learning and the rate of innovation slows down.

Some bad news: George Pfeil, the startup plant manager, who put pressure on the division management to change these practices was eventually fired "for being disruptive." When he left, he started a picture framing business in Detroit. So much for rewarding innovation and capturing learning!

Some good news: the plant has continued to function at record levels and the design has been kept substantially unchanged because even though some higher-level executives don't like it, it works so well they're afraid to mess with it.

All industries that continue to stick with the old management models will eventually suffer the fate that the auto industry is currently experiencing. And this will happen sooner rather than later.

Wednesday, February 18, 2009

Decentralizing responsibility.

Ford Romeo design idea #5. Decentralized, team-based responsibility and accountability.

Employees at Romeo were organized to operate a little like families and a little like independent businesses. They were divided into teams and these teams included both hourly and salaried members. However, unless you asked, you couldn’t tell which was which since everyone wore the same blue denim overalls. Romeo’s work teams were composed of 8 to 24 members with each group responsible for planning, monitoring and completing a specific component in the engine production process.

Teams were established in each of the machining areas, such as Block, Head, Camshaft, Crankshaft and Connecting Rod. Teams were also established for the Head and Cam Sub-assembly areas, and the Piston and Rod Sub-assembly areas. The final assembly area, because of its size, was divided into ten teams, each responsible for putting together, testing and approving finished engines. Each of these production teams had their own financial analyst in addition to dedicated engineering and skilled trades support.

Skilled trades on the teams were responsible for continuous improvement, as well as the maintenance and repair of all equipment on their line. Leadership was provided by the Team Manager, who was responsible for production volume, process engineering, product cost and quality, material control, project studies, long-lead funding and team development. The lead engineer in each group also functioned as a Team Leader and filled in for the Team Manager when he or she was out of the plant. Each team had hourly Team Coordinators who were responsible for training, continuous improvement, facilitating meetings, communicating with other teams, and filling in for absent employees at any job on the line. Team Coordinators were not required to discipline or determine pay and could not give direct orders to employees.

This structure eliminated the need for the traditional positions of Foremen and General Foremen. Responsibilities normally assigned to these positions were divided between the Team Coordinators, the Team Manager and the financial analyst. Team Coordinators were the team’s chief trainers. They were also the team’s only relief people. Team members rotated assignments regularly so each team member eventually learned to perform all the jobs in their team. “Each team had their own meeting area,” noted Dr. Lee Sanborn, who directed the start-up team-building and training programs at Romeo. “They also had their own bathroom, their own locker room and their own parking area.”

So the teams were essentially self-contained units, like a series of plants within a plant. Everyone from the newest hourly employee to the plant manager worked to produce an engine that Ford could boast was the best in its class. Within each team, everyone was responsible for improving production. Everyone was responsible for monitoring and improving quality. And everyone was responsible for tasking action if something went wrong.

Most conventional Ford plants were organized like football teams with the plant manager as the quarterback. The other employees, like football players, were all experts, skilled in a specific phase of playing the game. Each covered his or her own special job. Everyone stayed in their specialty and seldom got out of position. In contrast, Romeo was organized like a rugby team. Everyone was in pursuit of the ball at all times.

There were no jobs in the traditional sense of permanently owned task assignments at Romeo. Everybody was responsible to do whatever needed to be done in their area, on their own initiative, whenever they saw it was required. The only qualification was that they were certified to undertake that task safely and effectively. Team members were more concerned about achieving the plant’s goals rather than worrying about who got assigned to carry out what activities. No one at Romeo said, “That’s not my job.”

Tuesday, February 17, 2009

Planning for continuous employee development.

Ford Romeo design idea #4. Continuous employee development.

The hourly workforce had never built engines before so considerable technical training was required both prior and subsequent to start-up. Since the plant emphasized decentralized decision-making and cross-functional teamwork and the workforce had no previous experience with these ideas, extensive employee social-skill development was required prior to and after startup. In addition to new technical skills, training was also provided to develop business skills so employees could understand the goals set forth in the Romeo mission statement and be responsible for tracking their progress in meeting them.

Several delivery systems were used to provide training for employee technical, social and business development at Romeo. These included instructor led classroom training, off-site seminars, video training, stand-up computer-based training, self-instructional computer-based training, interactive video training, and experiential on-the-job training. Most classroom training was developed and presented by Romeo employees, most often by the managers and sometimes by the union leaders. These instructors were given “Train the Trainer” courses prior to developing and delivering their programs, with special emphasis on including group and team-based activities.

Many benefits were gained when plant leaders acted as instructors:

- First, they built learning relationships with the other employees, and were respected as experts in the content being covered. Over time, this developed into an on-going working relationship where the employees felt more and more comfortable calling on the instructors when there was a problem related to their functional specialty.

- Second, as managers and union officials taught courses in their areas of expertise, the plant's leaders were perceived to be competent and approachable, instead of distant and removed from day-to-day operations which was traditionally the norm in the industry.

- Third, regular interaction in the classroom kept the leadership up-to-date about issues developing on the plant floor.

- Fourth, employees got their questions answered directly by those who were the most knowledgeable in the plant about the topics of concern.

- Fifth, there was visible consistency between the training and the plant’s operating philosophy, which stated that the role of management and the union was “to assure people have the atmosphere, resources and abilities to do what's needed to produce the highest quality production engines in the world, and to develop teams of employees who are the best engine builders in the world.”

During commissioning and start-up, many one and two-day off-site team planning and training sessions were conducted, some involving up to 600 people in the same place at the same time (a large auditorium was built and subsequently donated to a local church to make this possible). These sessions focused on dealing with actual situations being experienced by the employees during start-up rather than reviewing abstract management theory.

Some of the tasks undertaken during these meetings included:
- clarifying the plant’s mission and operating philosophy;
- reviewing it’s application in real life situations to be sure everyone understood what was intended and implied;
- analyzing how well individual work groups were functioning;
- clarifying the responsibilities and accountabilities of individuals and teams; and
- resolving problems within and between operating departments in the plant.

Monday, February 16, 2009

Why this case study?

You may be wondering why I'm rehashing experiences in, of all things, the car industry, that are 20-years old.

First of all, there's nothing unique about the car industry. I can provide similar successful case studies from insurance, health care, software, education, high-tech, R&D, hospitality, food, energy, and manufacturing settings, on four continents. I like the Romeo example because the structures and processes were very different from those used in traditional models and because the business was extremely successful as a result. Romeo is an example a very flat, adaptable, largely self-managing organization built around managers and employees who were taught to play new and different roles. Romeo is also still successful today as are most of the other examples I noted above. So innovative management models have considerable staying power and have proven themselves to be more than just a flash in the pan.

In Ford's case, upper management never really liked the decentralized model as it took the illusion of control away from executives at division and above. The outstanding results obtained at Romeo also made other engine plant managers look bad so they spent their time bad-mouthing the innovation, trying to find fault with it rather than trying to learn from it (I thought the UAW was also culpable in this regard). However, the plant performed so well that nobody dared mess with it in case they screwed it up. Sadly, Ford didn't choose to spread these ideas through the rest of the company, even though previous successful examples had been demonstrated in other divisions (components, stamping, body assembly). No wonder Ford and the rest of the industry is in such trouble today. G.M., Ford and Chrysler have eliminated a total of 120,000 manufacturing jobs in the last three years. They also laid off over 15,000 white collar employees last year with more to come. Sometimes, you have to wait for a major, major crisis or for a whole generation of managers to die off before new thinking is possible.

So, I suggest you look at the design process that was used and how the innovative organizational arrangements were made to work as the key learning ideas in this example. Let me know if you find this useful and if have any questions or comments.

Friday, February 13, 2009

True love, a poem by Judith Viorst.

Since tomorrow is Valentines Day, I thought the following poem would be an appropriate choice. Judith Viorst is the author of several works of fiction and non-fiction for children as well as adults. Alexander and the Terrible, Horrible, No Good, Very Bad Day, her most famous children's book, was first published in 1972 and has since sold over two million copies. Ms. Viorst received a B.A. in History from Rutgers University, and she is also a graduate of the Washington Psychoanalytic Institute where she is now a research affiliate. She began her career as a poet and has since completed six collections of poems for adults. She lectures widely on a variety of topics, ranging from the subjects of loss and control to children's literature. She lives in Washington, DC with her husband Milton, a political writer.

True Love by Judith Viorst

It is true love because
I put on eyeliner and a concerto and make pungent observations about the great issues of the day
Even when there's no one here but him,
And because
I do not resent watching the Green Bay Packers
Even though I am philosophically opposed to football,
And because
When he is late for dinner and I know he must be either having an affair or lying dead in the middle of the street,
I always hope he's dead.

It's true love because
If he said quit drinking martinis but I kept drinking them and the next morning I couldn't get out of bed,
He wouldn't tell me he told me,
And because
He is willing to wear unironed undershorts
Out of respect for the fact that I am philosophically opposed to ironing,
And because
If his mother was drowning and I was drowning and he had to choose one of us to save,
He says he'd save me.

It's true love because
When he went to San Francisco on business while I had to stay home with the painters and the exterminator and the baby who was getting the chicken pox,
He understood why I hated him,
And because
When I said that playing the stock market was juvenile and irresponsible and then the stock I wouldn't let him buy went up twenty-six points,
I understood why he hated me,
And because
Despite cigarette cough, tooth decay, acid indigestion, dandruff, and other features of married life that tend to dampen the fires of passion,
We still feel something
We can call
True love.

Thursday, February 12, 2009

Using innovative management principles at Ford.

The Romeo organization was designed around five key design ideas.

1. Simultaneous product and manufacturing engineering.

In previous traditional engine plant launches, process engineers designed and purchased the machining lines with relatively little input from other functions. Production employees were usually brought in as the line was being installed on the plant floor, at which time the design engineers returned to other assignments at division staff or central engineering. If the equipment failed to operate properly, production and engineering would blame each other for any resulting problems. At Romeo, the production employees were involved very early in the design process and assisted the engineers throughout the design, purchase, sign off and installation phases of the launch. The manufacturing process was developed at the same time as the product was designed by combining the production and engineering functions. Eventually, they reported to a single manager. This emphasis on simultaneous engineering improved communications and cooperation and facilitated the formation of integrated manufacturing and product engineering teams throughout the plant.

2. Local control of process variations.

A Romeo Quality Plan (RQP) was developed based on a detailed examination of all processing stages in the proposed engine manufacturing cycle. This resulted in an elaborate matrix showing how incoming sources of variation at each stage impacted the overall process flow. This allowed potential quality problems to be identified very early in the design process. During the commissioning and start-up of the plant, variations in materials, maintenance and manufacturing process were reviewed weekly in half-day meetings involving equipment vendors and product engineers. This allowed problems to be identified and resolved much earlier than usual. In addition, all purchased-part vendors were required to set up their own manufacturing processes in accordance with RQP standards. All vendors attended extensive RQP training at Romeo, and were required to successfully complete four detailed manufacturing reviews conducted by the Romeo work teams before they were authorized to start shipping parts to the plant. The RQP process subsequently became the nucleus of the Ford quality plan worldwide.

3. Just-in-time manufacturing.

Romeo used the “pull” system rather than the “push” system of production scheduling. Inventories of in-process parts were minimized throughout the plant and were delivered by the vendors only when actually required. In-process parts were either requested from vendors directly by line employees or requisitioned by automated computer programs. Vendors were included in design discussions which allowed them to provide suggestions about changes that would avoid subsequent scheduling problems.

Design ideas 4 and 5 will follow next week after poetry Friday.

Wednesday, February 11, 2009

An example of innovative design.

When Ford's Engine Division learned it would have to develop and produce a new engine for the 1991 Lincoln town car that was equal in cost and quality to the best V-8 engine in the world, George Pfeil, the manager responsible for producing the new engine, knew this would be impossible using traditional plant structures and processes. He would have to create something quite different if this program was to be successful. He knew that some plants at Ford had significantly improved their performance by using flat, decentralized, team-based work structures. Pfeil decided he'd create the first Ford plant in the United States to organize its entire operation at all levels around these new management concepts.

He told me at the time, "You ultimately reach a point where you can’t solve new problems using old principles. I think we’ve reached that point in manufacturing at Ford. When you go back to the principles which our current companies are built on — standardization, specialization, hierarchy, and so on — you realize that these aren't bad principles in themselves, but they're inadequate for the challenges ahead."

To produce the new high-tech engines, Ford rebuilt and retooled a one-million square foot manufacturing plant in Romeo, a small town just outside Detroit, at a cost in excess of $1.0 billion. This facility was on the site of a former Ford tractor plant which had just been closed down because of bad quality and poor performance. Most of the 700 hourly employees who would work at the new plant were formerly employed at the tractor plant and had at least 15-years previous experience working for Ford in very traditional work settings.

Pfeil and his management team approached the UAW Local 400 who represented these employees and tried to explain what they had in mind. The union’s plant committee agreed to jointly explore innovative management ideas with the executive team, although not everyone on the committee was as certain as they are today that this was the route to success.

“When we first met with the management people," UAW Chairman Pete Piccini remembers, “we thought they would have all the answers. We soon found they really didn’t know a lot about this concept or how to make it work either.” Together, management and union leaders began to design an organization and a way of working they thought would best fit the Romeo situation.

I was brought in as an external consultant specializing in innovative organization design because I'd worked with other successful Ford startups in Mexico (Juarez and Hermosillo) and Europe (Pamelia in Portugal).

The Romeo organization was designed around five key design ideas:

1. Simultaneous product and manufacturing engineering.

2. Decentralized local control of process variations.

3. Just-in-time manufacturing.

4. Continuous employee development.

5. Decentralized, team-based responsibility.

I'll explain these and the design process used in more detail in subsequent posts.

Tuesday, February 10, 2009

Conditions that drive innovation.

As technology becomes ever more powerful, convenient and complex, a broader knowledge base is required of all employees. Increasingly, the skills of the labor force and their ability to imagine new futures provide companies with their most valuable competitive weapon. Smart companies develop smart, satisfied employees with broad-bandwith capabilities by expanding their skills across traditional functional boundaries (by blending, for example, expertise in technical design, quality engineering and manufacturing operations). The prized employee is one who learns quickly and continuously, works collaboratively with others, and is comfortable in an environment of innovation, experimentation and risk.

This places a premium on a company’s ability to recruit, retain and develop the best people available. It also requires a corporate culture that encourages people with diverse ideas and capabilities to learn from each other and create new opportunities together. Leading companies combine talent and technology in ways that generate much higher profits per employee than was possible in the past. They start by asking, “How do I hire talent that I can profit from? How do I create an organization where innovation is truly everyone’s responsibility?”

To see how easy it is for employees to drive innovation in your company, talk with some first-level employees and ask them the following questions:

• The first question to ask is, “How have you been trained as a business innovator? What investment has the company made in teaching you how to innovate?”

• The second question is, “If you have a new idea, how much bureaucracy do you have to go through to get a small amount of experimental capital? How long is it going to take you to get 20 percent of your time and $5,000 to test your idea? Is that a matter of months or can it happen very easily?”

• The third question is, “Are you actually being measured on your innovative performance or your team’s innovation? How does this influence how you’re paid?"

• And finally ask, “Does the way management works in this company tend to help you work as an innovator or get in the way?”

Whenever I’ve asked these questions to first-line employees, I’ve usually found that in most companies there’s still a big gap between the rhetoric of innovation and its reality.

Monday, February 9, 2009

Some criteria for new models.

There are three reasons why the practice of management will change as radically over the first decades of this century as it did during the beginning of the last one.
- First, the impact of new technology, which is providing powerful new tools for coordinating people’s efforts.
- Second, there’s the increasing demand for companies to be adaptable, innovative, and exciting places to work.
- The third force for change is the revolution in expectations. People entering the workforce today are the first generation that’s grown up on the Web. Their basic assumption is that their contribution should be judged simply on the merits of what they do rather than on the basis of their title or credentials or anything else. This is a lesson they’ve learned from their experience in cyberspace (remember the famous cartoon, "on the internet, no one knows you're a dog").

Lowell Bryan, a director at McKinsey & Company, believes that new models for thinking about organizing are needed in all industries because today every company is engaged in thinking-intensive work. The traditional, hierarchically-based 20th-century model isn’t effective at organizing the work of self-directed employees who need to make subjective judgments based on their own special knowledge. And in the digital age, they’re the ones who create the most wealth.

Bryan says we should use hierarchical decision-making only for activities such as allocating resources, appointing people to jobs, and holding people accountable. At the same time, a new model should help self-directed employees collaborate with their peers on a continuous basis, using new mechanisms that enable horizontal transactions to be as efficient as vertical ones. Every large company has significant numbers of thinking-intensive employees who need to collaborate with one another. The winners will be those firms that enable these employees to create more profits by putting their collective mind-power to better use.

We’re in the early stages of a long process of innovation in how we design organizations that will eventually go to places we can’t see yet. But I believe we can already see enough to identify huge opportunities for companies who take advantage of what’s currently known. Innovation is taking place all over the place, but organizational barriers prevent successful innovations from being adopted throughout the rest of the company or the industry. I'll illustrate this with case studies in the weeks to come.

Today, too many executives believe that while a few people in the company may be really clever and creative, most are not. If you study companies like Toyota, you'll see how they’ve benefited by mobilizing the intelligence of so-called ordinary workers. Going forward, no company will be able to afford to waste a single iota of human imagination and intellectual power.

Friday, February 6, 2009

Leisure, a poem by W. H. Davies.

My daughter recently sent me a 2007 article from The Washington Post ( describing how Joshua Bell, a virtuoso concert violinist, played unannounced for three-quarters-of-an-hour in a Washington DC subway station during rush hour on a workday morning. Over a thousand people passed by in that time but hardly anyone appears to have noticed, let alone stopped to listen. The article asks the question - in our busy lives, do we have time for beauty?

This reminded me of the following poem by W. H. Davies. William Henry Davies (1871-1940) was born in Newport, Monmouthshire, in Wales, the son of a publican. After an apprenticeship as a picture-frame maker and a series of laboring jobs, he traveled to America, first to New York and then to the Klondike.

He returned to England after having lost a foot jumping a train in Canada, where he led a penurious life in London lodging houses and as a pedlar in the country. He was married in 1923, to Emma, who was much younger than he. His first poems were published when he was 34.

Most of his poetry is about nature or life on the road and has a natural simple, earthy style. He also wrote two novels and autobiographical works, his best known being Autobiography of a Super-Tramp.

Leisure by W. H. Davies.

What is this life if, full of care,
We have no time to stand and stare?

No time to stand beneath the boughs,
And stare as long as sheep and cows:

No time to see, when woods we pass,
Where squirrels hide their nuts in grass:

No time to see, in broad daylight,
Streams full of stars, like skies at night:

No time to turn at Beauty's glance,
And watch her feet, how they can dance:

No time to wait till her mouth can
Enrich that smile her eyes began?

A poor life this if, full of care,
We have no time to stand and stare.

Thursday, February 5, 2009

Reinventing a 100-year-old management model.

“Sometime over the next decade,” warns renowned business guru Gary Hamel in his book, The Future of Management, “your company will be challenged to change in a way for which it has no precedent.” What’s even more worrisome, he argues, is that decades of orthodox management decision-making practices, organization designs, and approaches to employee relations provide no real hope that companies will be able to avoid faltering and/or suffering through painful restructurings.

Lowell Bryan and Claudia Joyce, in their book, Mobilizing Minds, arrive at a similar conclusion from a slightly different perspective. They show that the 20th-century model of designing and managing companies by emphasizing hierarchy and centralized control, not only gets in the way of collaboration and wealth creation by talented employees but also generates unnecessary complexity that works at cross-purposes to those critical goals. Forward-looking executives will respond to these challenges, these authors conclude, by bringing the same energy to developing innovative management that they now bring to creating innovative products and services.

The opportunity is huge - and urgent. Against the backdrop of dramatic technological change, ongoing globalization, and the declining predictability of strategic-planning models, only new approaches to managing and organizing talent will provide companies with a sustainable competitive advantage. The challenge: as companies discard decades of management orthodoxy, they'll have to balance revolutionary thinking with practical experimentation to "feel their way" to new, innovative management models.

For over 30 years I’ve helped primarily large companies innovate. And despite a lot of successes along the way, I’ve often felt as though I was trying to teach a dog to walk on his hind legs. Certainly, if you get the right people together, create the right incentives, and eliminate erroneous past practices, you can spur a lot of innovation. But the moment you turn your back, the dog is on all fours again because it has four-legged DNA, not two-legged DNA.

So over the years, it’s become increasingly clear to me that most organizations don't have innovation DNA and they don’t have adaptability DNA. This realization led me to ask: what problem was management initially invented to solve? Reading the early pioneers like Frederick W. Taylor, I realized that management was designed to solve a very specific problem — how to do things that could be perfectly replicated, on an ever-increasing scale and at steadily increasing efficiency.

However, perfect replication isn't particularly desirable or useful in a constantly changing, fast-moving world. Instead, management now faces a new set of challenges:
- How to build organizations that are as nimble as change itself.
- How to mobilize and monetize the imagination of every employee, every day.
- How to create organizations that are highly engaging places to work in.

I believe these challenges simply can’t be met without reinventing our traditional management model. And that's why I want to share some experiences and ideas about innovative management, starting next week.

But first, we'll have a poem tomorrow.

Wednesday, February 4, 2009

How to encourage "intrepreneurship."

What is entrepreneurship?

Richard Cantillon, a French economist, originally defined entrepreneurship in 1755 as “self employment with an uncertain return.” Entrepreneurs work independently or as part of a corporation, to develop a product, process, market, or technology into a usable form that’s commercially viable in the marketplace. Entrepreneurs, by definition, chafe at confinement and regimentation.

What is intrapreneurship?

This refers to entrepreneurial efforts inside existing companies ("intrepreneurship") aimed at exploiting new markets or new products, or both, that are eventually treated as new businesses by existing organizations. These venturing efforts may or may not lead to the formation of new units that are distinct from the existing business (e.g., a new company or a new division).

What happens to defeat entrepreneurship in larger companies?

- Success leads to stagnation.
Of the ten leaders in vacuum tubes in 1955, only two were left in 1975. Some failed because of a decision not to invest in the new technology. Others invested, but picked the wrong technology. Still other companies failed because of their inability to play two games at once: to be both effective defenders of what quickly became old technologies and effective attackers with new technologies. Firms like Intel and Motorola were not saddled with internal conflict and inertia, and as they grew, they were able to re-create themselves. Firms like RCA were unable to manage these multiple technological approaches; they were trapped by their successful pasts.

- Large organizations find it difficult to successfully make small investments.
At one firm, it was impossible to invest $20K to automate a simple routine process although the manager could sign off on $20K in overtime for a single weekend. Investments had to be of the order of a million dollars or more just to be considered.

- The company’s culture has a predominantly inward focus.
There are extensive procedures for resolving issues through consensus. There’s an arrogance bred by previous success. There’s a sense of entitlement on the part of some employees to guaranteed jobs without a quid pro quo. There’s a preoccupation with internal procedures rather than an understanding of the changing external marketplace.

The typical intrepreneurial process has four phases:

The Solo Phase, where the intrepreneur works alone to develop an entrepreneurial idea.

The Network Phase, where the intrepreneur shares the idea with close friends and trusted customers.

The Bootleg Phase, where an informal team develops and provides support to the new venture while the intrepreneur takes on the responsibilities of leadership.

The Formal Product Phase, where the new venture becomes a formal, official organizational entity and must deal with the parent organization’s regular policies and practices.

You design organizations that encourage this kind of innovation by creating a culture where employees have a sense of security and a sense of possibility. To get innovation, you must allow freedom to experiment. However, to get good financial results, you must have a high degree of control. This culture is fostered by having internally inconsistent competencies, structures and cultures that can coexist, yet share a single vision.

As I've mentioned before, the characteristics of creative organizations are:
• Open channels of communication.
• Not run as a tight ship.
• Wide-ranging perspectives.
• Idea-generating units freed from other responsibilities.
• Investment in basic research.
• Risk-taking philosophy.
• Stable, secure internal environment.

Tuesday, February 3, 2009

Causes of problems in product development.

Problems in the product development process are often related to:

- Bad linkages across functional structures.

- Unclear business strategy.

- Inadequate marketing information.

- Unclear responsibility for decision making.

- Incomplete membership in the product development team.

- Inability to achieve cross-functional convergence.

- Consideration of divergent viewpoints is cut short too soon.

- Inadequate product ownership.

- Structures and systems are unclear between divisions.

- Data isn’t used or integrated into decision making.

- Culture is conflict adverse.

- An R & D perspective predominates.

- Third party relationships are poorly managed.

- Culture has a “home run” mentality.

- Poor management of evolving expectations.

- Costs of entering a new business are miscalculated.

- Poor boundary management.

- People lack a sense of reward for meeting the overall objective.

- Prevailing concern is only with time to market.

- Convergence is forced.

- The role of “product champion” precludes objectivity.

- Constraints on promoting new market products.

- There’s a lack of cross-functional trust and respect.

- The functional areas own the objectives.

- Knee-jerk problem solving.

- Problem-centric culture is highly rewarded.

- Assumptions on market readiness are incorrect.

Typical dilemmas in high-tech companies include:

“I don’t really know how / when a product development project gets officially sanctioned .”

“We got a request for an additional feature on a project at pre-pilot” (usually because engineering wanted to introduce a new feature they felt could easily be incorporated into the current design).

“I don’t know how long it takes us to develop products - we never measure it.”

“Marketing won’t define the product.” - Technology departments.
“Engineering want us to design the product for them.” – Marketing department.

Monday, February 2, 2009

Organizing the product development process.

High-performing processes today are low-cost, flexible, accurate and fast. They must also be simple because complexity is a breeding ground for errors, delays, high costs and inflexibility. Simple processes must be organized around big work assignments since piecing many little jobs together creates non-value-adding overhead. These big jobs must be assigned to professionals who know how the process works, who understand the business as a whole, who are free to make decisions, and who can work without traditional supervision. As a result, favorite themes in successful new technology companies are connectivity, mobility and interactivity. World-class companies excel in managing concepts, competence, connections and human capabilities.

An effective product development process has:
- divergent phases when different perspectives and opinions are surfaced and explored, and
- convergent phases that involve understanding and agreeing on shared frameworks.

If there isn’t enough convergence and divergence on the front end, then the process takes longer and problems and variations are generated at the back end. To properly control this, project managers need to be skilled in dealing with conflict and able to manage disagreement in a positive way. In addition, key players need to have strong agreement about operating norms and practices from the very beginning of their involvement. Problems and variation are also caused by the organizational context of the product development team - for example when managers are constantly pulling people in and out of projects, or changing the direction and priority of the development effort.

It’s important to put a clearly defined boundary around the product development process. If product development is a project management exercise with overlays from the functional organizations, then it’s essentially a vertical system trying to do horizontal coordinating work.

An increasing number of successful companies are organized around functionality and customer needs instead of around products and functions. They’ve created a horizontal or lateral cross-functional organization for maximum product effectiveness. Wherever people are located in the value chain, they know who they’re linked to and have cooperative agreements with them. Companies invariably end up with strategic alignment problems when there’s not enough lateral teaming up through the hierarchy. The challenge is to develop a process that puts senior managers, who hold the resources, in touch with employees lower down in the organization, who although they know the technology and the customers best, are typically disenfranchised from the strategy process. These parties need to have deep discussions together about opportunity and destiny, unencumbered by the conservatism and lack of expertise of those in between.

Sprinting to market with a next-generation product is more like a rugby match than a relay race. Start with a one-page product description. As soon as top management approves it, set up teams in engineering, marketing and manufacturing, no more than ten people in all. Think of a multidisciplinary team that stays on the project from start to finish, passing the ball back and forth as they move down the field together toward product launch. Designers start work before feasibility testing is finished. Manufacturing and marketing begin gearing up well before the design is completed. These different contributors work together under a program manager. Team members need to be technically excellent, have good interpersonal skills and have a broad enough perspective to be able to understand what others have to say. Reviewing the evolving design regularly saves expensive changes late in the game. However, too many reviews waste time, so the team needs to operate with autonomy. As long as they’re within a pre-agreed range of costs, time and performance characteristics, they should be free to make their own trade-offs without checking in with senior management.

Business units are then organized around the following learning cycle:

• Business portfolio planning - “Do we invest resources to proceed further?”

• Product generation and definition - “Do we invest resources to develop it?”

• Order fulfillment - “Can we make it?”

• Product support process - “Is it a go - or a no-go?”

• Customer experiences the product and comments favorably

• Mature production - “Does it consistently meet specs?”