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Business Decision Making Take initiative

Rethink modus operandi before corona crisis ends!

Now that we are a few weeks into this global corona crisis. Most organisations have found a way to deal with the operational challenges it comes with. I hope that leaders in organisations that are economically affected by this corona crisis, are shifting their focus. Strategising what will happen after this lockdown or other restrictions are lifted. I believe that it’s not an option to return to business as usual.  If you are a leader, you should not be micromanaging the current crisis. Your employees know very well what can or cannot be done at this moment. Do not feel the temptation to invest a lot of your time and energy in optimising your business for the short term. Shift your focus towards the long term and how to restart your business.

Necessary actions are taken

The longer this crisis and the restrictions are upheld. The more likely we have to fundamentally rethink how to run our organisations. It would be naive to think we could just pick up where we left off. 

Maybe in the last couple of weeks you and your organisation have restructured your processes to be able to deliver the best possible value to your customers. Many organisations have decided to let their flexible workforce go, cancel training courses and stop all non essential investments. These are relatively easy and logical actions taken to create room to breathe on the short term. And because the economy is in low output mode, the remainder of the workforce can deal with the remaining work at hand.

Once restrictions are lifted, you customers won’t automatically return. You probably don’t have the funds or work to hire new employees. Or make too many investments. I would expect leadership teams are already thinking about what can be done to restart their organisations. Think about what will likely happen. Which approach might help and how this situation can be used to rethink their current method of operation. If not? Keep reading!

Before the corona crisis

Since the industrial revolution, we have been trying to optimise our value creation processes. We have created an impressive number of ways to govern it. The variables below used to be extremely influential in determining how successful we are able to do this.

The primairy factors triangle
Three primairy factors to be successful

Those who were able to control and utilise the three primary factors (resources, labour and capital) were successful. Large corporations dominating the markets because competitors are unable to obtain the natural, monetary and labor resources. To maximise these rewards we adopted numerous ways to optimise them.

When the restrictions to manage the spread of the coronavirus will be lifted. The scarcity of resources will not have changed. Maybe the oil prices are lower at this moment, but they will eventually rise again quickly. Organisations have probably used a significant amount of their financial reserves to prevent them from going out of business. They might not have the funds to (re)hire the flexible workforce they have let go. Organisations will resume their operations with less capabilities than they used to have. That might feel like a disadvantage. But in fact it’s an opportunity to do ‘things differently’, be more effectively with less.

Entrepreneurial Abilities

When these three primary factors are scarce, the entrepreneurial abilities of an organisation can make the difference.

Entrepreneurial abilities triangle
Entrepreneurial abilites

The ability to optimise the utilisation of the production factors is entrepreneurship. This involves five elements:

  • Taking initiative – Action oriented and driven by forward motion
  • Strategic business decision making – Based on a clear vision and strategy being able to make decisions
  • Innovation – Exploring and experimenting
  • Bearing risk – taking the consequences of the previous three elements regardless the outcome.
  • GUTS!

Focus on maximising outcome!

The last couple of months, I have been working with my clients to focus more on maximising outcome delivered. Many organisations tend to focus primarily on maximising the output. Being extremely efficient to deliver an assumed outcome. If there is no crisis at hand, you might get away with this. However, in a couple of weeks or months from now (who knows when). You will be restarting your business. Probably with fewer people available and with limited (financial) resources. The worst thing you could do is resume to the state before the corona crisis. Following the same procedures etc. I predict the outcome will be significantly lower. 

The restart of your business will provide you with the opportunity to rethink your modus operandi. How you can maximise the outcome with the capabilities you currently have. And the only thing you have to do is to involve your employees and tap into their entrepreneurial abilities. 

Inspect and Adapt

As a leader, you will have to set clear goals (outcome or even impact) and clear boundaries. Also, you might want to adopt an empirical approach to inspect and adapt. To navigate uncertainty (maybe you are have been using frameworks that assist you on that). This way you can reinvent your organisation in small iterations. Rethink all the things you used to do if these is necessary (procedures, protocols, documentation, sign-offs etc). Do these actions add value to your customers? Or can you achieve the same results with a different approach. Give your employees the freedom to change things without compromising on quality or safety. Most organisations have been practicing this approach for the last couple of years. For example, adopting the Scrum Framework or attempting to ‘transition’ towards more agility. 

The time will come to really put all these investments into practice. We will be facing a time with a lot of uncertainty. So, the only way to deal with that is to set up your organisation to frequently inspect and adapt the value it delivered. And how to get better at doing this with the limited resources available. 

If you are a leader, you should not be micromanaging the current corona crisis. Your employees know very well what can or cannot be done at this moment. Do not feel the temptation to invest a lot of your time and energy in optimising your business for the short term. Shift your focus towards the long term and how to restart your business.

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Business Decision Making Vlog

Magic Estimation Matrix – estimating effort and value in 15 minutes!

The best way to negotiate is with torsos angled, often at 90 degrees to one another. This avoids the face-to-face confrontational element whilst also allow looking at the other person’s face. This position enables having an open conversation. What we thought, would this approach also work with large group estimations on effort and value? But without the time-consuming conversations, and here is the magic estimation matrix.

There usually is a (un)healthy tension between those who are passionate about the value of features on a product backlog and those who have a slight idea on the effort involved in creating this feature. One of the techniques frequently used to create an initial estimation on the effort for an entire product backlog is Magic Estimation.

Using this technique you get a quick feel on the perceived effort of the items on the product backlog. In a nutshell this works as follows: Get a Scrum team together and have the Product Owner print each product backlog item on a separate sheet. The development Team does the estimation and without talking or non-verbal communication they have 15 minutes to estimate the entire product backlog.

We have often used this technique also for stakeholder to collaboratively create an initial insight in the priority of product backlog items. Since stakeholders tend to like talking even more (most of the time it’s what they are paid for), this has proven to be a great technique for filtering those items they all agree upon, this saves tremendous amounts of time.

Together with Ron Eringa, we thought if it would be possible to do this exercise simultaneously? Why not? This is how you would do this:

Preparation

  • Product backlog items, each on a separate post-it or page in hard copy
  • Plenty of space to move around and place items on the floor
  • A sheet with the sequence of numbers inspired by the Fibonacci sequence for effort. For value add an extra zero, just to make it look important(see the image below what this could look like)

_0_magicestimation

Workshop

  • Briefly explain the rules of the game
    • Stakeholders and development team plays, PO watches
    • Spaced out estimation cards one axis for effort other for value
    • The Development team members each get a set of PBI’s
    • Rule 1: No talking
    • Rule 2: No non-verbal communication
    • Each participant’s estimates by placing item @ points. The Development team starts and as soon as there are about three items estimated the stakeholders will plan on value
    • Each participant checks estimate and if necessary re-estimates
    • Product Owner marks fall-outs
    • Discuss fall-outs until agreement is reached

This way you have a great initial estimation of your product backlog on both value and effort. And as a by-product stakeholders and development team get to know and understand each other a little better.

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Bearing risk Business Decision Making

Are you an entrepreneur or just minding the shop?

Recently, I was listening to an item on the Dutch radio on research about employment and management. It stated that companies fear a lot of people will leave their company and look for a new challenge. With the economy back on track this is nothing new. However, politicians and unions are screaming for raises! Research states that this is not the primary reason why people leave a company. According to the research done by Berenschot and ADP; It is management. Here are some contemplations based on my personal experience.

Mind the Shop

After years of little or no raise, a better outlook of the economy, raising salaries seems like a no-brainer. Politicians and unions are screaming for this to happen to prevent people from leaving companies/industries. It seems that management is ruining the engagement of employees. Is it on purpose? Probably not, it’s never the intent of management to scare people off. If it is, then something is seriously wrong with that company. So let’s assume this is not the case.

It is my personal experience that most company cultures and management behaviour have nothing to do with being an entrepreneur, with running a business. All the mechanisms like multi year strategic plans, proper micromanagement, annuals departmental budgets etc, are all  in place to mind the shop. Look after the place until the next person comes to mind the shop. As long as at the end of the year we didn’t exceed our budget, we’ll be just fine. It has nothing to do with entrepreneurship, by employing innovation, taking risk and most of all taking initiative.

It is the responsibility of leadership and management to give opportunities and put demands on people which enable them to grow as human beings in their work environment.

 Sir John Harvey-Jones

Training already sold

One of the reasons for me to become an independent professional was lack of entrepreneurship from management. I wasn’t allowed to do a training course that exceeded my personal development budget. I just received a plain and simple ‘no’ as a reply to my request. The rules stated it was not allowed. And there’s no use arguing with the rules that help ‘minding the shop’, right? Well no, wrong! Because there was a very plausible reason to break the rules: paying customers. The course would certify me to provide courses myself and before I attended the training I had three potential clients willing to pay for such a course. It still was a ‘no’.

To me, that is a simple sign of minding the shop and lack of entrepreneurability. This internal rule was created to prevent employees from attending courses that do not bring any value to the company. However, this course would almost immediately earn a profit to the company. So, deviating from the internal rules were valued over servicing clients, investing in employees’ knowledge and earn a profit. Explaining this to the management team a couple of times from various angles couldn’t make them to change their mind. They said: “We understand the situation, however, these are the rules of our company.”

The Monitor

Another example, a few years back, I ran a proof of concept with an international team. One of the team members was a designer and requested an IPS monitor (or something like that) to be able to deliver quality in her work. After a request and even an escalation to upper management, I received a ‘no’. The designer would have to settle for a regular monitor just like everyone else. Budget wasn’t the problem, some IT hardware configuration restraining jacket was. Again, I was held back by management that did not want to deviate from internal policies and see the benefits of the request. This is not where the story ends.

The Entrepreneurial Manager

Ultimately, I found one entrepreneurial manager who said, you just get the monitor, I have some part of my budget which covers special expenses which still has some room left. Just hand me the receipt and I will take care of it! So, I went to the local electronics store to buy this monitor and have the designer deliver quality! That is the kind of behaviour I am looking for in management. Them using the internal rules and procedures as guidelines but keeping in mind the reason the organisation is in business. And when people, proactively, offer solutions to increase the impact of the organisation. Not only for their own gain but for a greater good and then supporting them.

That’s what we need. Servant leaders! The last manager is one I want to work for, a person who sees past current boundaries and restrictions and sees the potential value in new or different ideas. They have the guts to get it done and get it done!

The only companies that innovate are those who believe that innovation is vital for their future.

 Sir John Harvey-Jones

So ask yourself, are you an entrepreneur or are you just minding the shop? If you are an entrepreneur I bet you employees love to work for you! If you mind the shop, then you need help! Your employees might already be looking for a different job, it’s not the money you offer them. It’s how you facilitate them to be a professional, to let them contribute to your success. Leave a comment with your thoughts!

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Business Decision Making Entrepreneurability

3 tips for fast growing companies

‘You are likely to get management approval for a 500 dollar expense…..but you can call a 1-hr meeting with 20 people and no one notices’.

Some time ago, I saw this statement in an image on LinkedIn. I could not help to grin a little and I bet for most of you this is very recognisable. Throughout the last couple of years I have had first hand experience of fast growing companies that struggle with fast growth. This growth puts pressure on the ability of these organisation to stay as responsive as they were when they were still small. Below you find three tips on what to keep in mind when facing rapid or exponential growth.

1. Quality is the foundation of growth

I have seen this at every company I have worked with over the last couple of years. They have a great business proposition which after a brief period gets traction in the market place. This creates rapid growth for the organisation putting pressure on internal communication, recruitment, processes and procedures. This usually is scalable until a company reaches 80-150 people. Then things get tricky.

A company this size is almost impossible to manage as a single owner and the management team will get larger. There is no fault in this. However, having scaled the leadership of the organisation requires some alignment and a shared vision on how to lead the company. So the management team retreats to a nice off site location to contemplate on a vision and strategy for the coming years and this is where I have seen things so wrong.

To give you an example, one organisation came with a strategy containing 10 principles to guide the organizations to even bigger achievements. 9 of these points were related to safeguard culture, improve quality and facilitate for improvement. The last point stated:

“In 5 years we will have 500 employees in 5 countries”

And that is a dangerous statement. This is what stuck to everybody throughout the organisation. A machine was created to bring in as many people possible to meet this ambitious statement and the quality of the people brought in was a little below the company standard. This single focus on growth affected the quality focus that made the company achieve their initial success. Every completely lost focus on the first 9 statements of the strategy. Not until customers started complaining or even walking away.

Focus on growth in number and results will not help your achieve growth. Growth is a result from the quality you deliver as company. The other way around does not work!

2. Trust your professionals, do not over-regulate!

Especially in an organisation where you focus on hiring true professionals beware of applying a 19th century management style. Management of professionals has shifted dramatically from telling people what task to perform to enabling professional to use their skills and knowledge to maximize the value they create. This sounds nice and is a well researched and documented as in Daniel H. Pink’s book ‘Drive – the surprising truth about what really motivates people’.

However, such behaviour, for those who most of the time are still held accountable for results, is extremely difficult to sustain when operating under pressure of timelines, budgets etc. The natural tendency when pressure is high is to fall ‘back’ into a command-and-control mode. Such behaviour is killing the motivation of professionals who will either leave at some point or will become numb to contributing their knowledge or experience.

Think of this phenomenon with the following metaphor of carrots, eggs and coffee beans. In most organizations where people have the energy to contribute and have the feeling their efforts are appreciated you see coffee beans all over. However when such initiatives are turned down again and again you end up with a group of people behaving like a bunch of cooked carrots.

Working with professionals requires a manager to enable them to optimally spent their time and talents. Steering on the clear boundary conditions is the only this a manager should do. How to manoeuvre within these boundaries is up to the professional. This is how you create environments where people can optimally perform. More on creating such an environment? Check out this video:

[vimeo width=”75%” height=”75%” autoplay=”false”]https://vimeo.com/121517508[/vimeo]

3. Hire on attitude & potential

In highly skilled working environments it is all about the people working there. However, finding those people with all the knowledge and experience you wish is almost impossible. Hiring good professionals boils down to attitude and potential. Learning people the content and context they are working in is relatively easy comparing it to crafting the right attitude. Fast learning and highly energetic professionals usually show more potential than those seasoned workers who have ‘seen it all’.

In organisations with highly skilled professionals, culture is key and embedding those professionals in your organisation can be a challenge.  When on boarding newly hired professionals starts with imprinting your corporate DNA in theirs. Drowning them in hours and hours of rich of content training courses is only half as effective as telling them the (undoubtedly) interesting history and cultural values of your organisations. Teaching them the common language you speak within your organisation and what you vision is on the services or products you are delivering is extremely powerful in fast on boarding of highly energetic people. I have experienced such on boarding programs twice in my career as well as a few less successful ones and those two organisations I still hold close to heart.

So if your organisation is in the luxury position of rapid growth please focus on keeping the focus on quality, enabling your professionals and hire on attitude and potential.

What’s your struggle?

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Business Decision Making Take initiative

The autonomy and alignment experiment

Recently, we hosted a small event on ‘self organisation’. This was an informal and highly interactive session. We kick started with an experiment which I think is worth sharing.

Goal of this experiment is to see how people react when given a simple task with a combination of high or low autonomy and alignment. How does this make them feel? And how do they experience this? The outcome was great! In this post I would like to share how you can re-enact this experiment.

This experiment is inspired by a small fragment from the movie about the Spotify Engineering Culture part 1. We wanted, before showing this to the audience, to have them experience what it means to have low autonomy and low alignment but still have a result expected. This is how the experiment works:

Step 1 – The event starts before it starts

Before the event officially started, even before we welcomed everybody we divided the group into 4 smaller groups. S no welcome, no explanation that we are doing an exercise. Just. “Welcome, we need you to split up in groups of four.”

Step 2 – Handing out the assignment

Each group gets an assignment written on a post-it handed over by the facilitator of the autonomy experiment.

Group 1 – Low autonomy, Low alignment

Welcome, on behalf of Prowareness welcome to this Mastery in Scrum event. Tonight we will be talking about the self organisations in scrum teams. Enjoy your evening, we will start in 10 minutes.

Group 2 – Low Alignment, High Autonomy

Welcome to Mastery in Scrum on self organisation. Feel free as a group to get to know each other and the other groups in the next 10 minutes.

Group 3 – High Alignment, low autonomy

Welcome to Mastery in Scrum. Heres your assignment for you:

First group : Learn all the participants (so also other groups) their names

Second group: Learn all participants (so also other groups) their current role in an organisation

Third group: Learn all participants (so also other groups) the biggest challenge working with teams

Fourth group: Learn all participants (so also other groups) their experience with Scrum in years.

If you are with >4 groups choose one of four tasks.

You have 10 minutes

Group 4 – High Alignment and High Autonomy

This group gets the following assignment.

Welcome to Mastery in Scrum. We would like to get to know what people’s expectations are for this workshop. You have 10 minutes.

Step 3 – Chaos begins

Right after the assignments had been handed out, everybody started to execute their assignment where some are perfectly executing their task assigned and others where looking puzzled by the fact people approached them with certain questions.

Step 4 – The Question

After 10 minutes we asked everybody to get to their seats and we asked them;

For each group we would like to hear what you found out what people’s expectations are for this workshop.

Some teams were able to elaborate a little on the topic, some had no idea this was the purpose of the assignment they received.

Step 5 – Debrief

After this we did a debrief on the autonomy experiment asking the following questions.

  • Discuss what the groups thinks what this was all about?
  • Discuss how each group experienced this exercise?
  • Showing the movie on Spotify engineering culture
  • How does this reflect to their situation, their work and what is the relationship with self organisation ? (fishbowl – 1 chair per quadrant)

This was a great way to kickstart the event and a discussion on how to achieve self organisation because every participant experienced the impact on this. So please feel free to replicate this experiment and let me know what you think of it and how it can be improved.