Enterprise 2.0

The Engagement Gap

We define employee engagement (a term that is widely used and misused) as an employees’ willingness and ability to contribute to company success. And the current level of employee engagement isn’t good.

An excerpt from Gary Hamel’s blog at the Wall Street Journal, entitled Management’s Dirty Little Secret:

“Consider the recent “Global Workforce Survey” conducted by Towers Perrin (now Towers Watson), an HR consultancy. In an attempt to measure the extent of employee engagement around the world, the company polled more than 90,000 workers in 18 countries. The survey covered many of the key factors that determine workplace engagement, including: the ability to participate in decision-making, the encouragement given for innovative thinking, the availability of skill-enhancing job assignments and the interest shown by senior executives in employee well-being.

Below you’ll find some supporting graphics taken directly from Towers Watson’s most recent (2012) instalment of the study:

 

TW_Workforce2012.png

Unfortunately, these results aren’t uncommon or new. Peter Drucker was quoted some time ago as saying, “Most of what we call management consists of making it difficult for people to get their work done.”

But the path to addressing this problem is under our control according to research conducted by Teresa M. Amabile and Stephen J. Kramer:

“Ask leaders what they think makes employees enthusiastic about work, and they’ll tell you in no uncertain terms. In a recent survey we invited more than 600 managers from dozens of companies to rank the impact on employee motivation and emotions of five workplace factors commonly considered significant: recognition, incentives, interpersonal support, support for making progress, and clear goals. “Recognition for good work (either public or private)” came out number one.
Unfortunately, those managers are wrong.
Having just completed a multiyear study tracking the day-to-day activities, emotions, and motivation levels of hundreds of knowledge workers in a wide variety of settings, we now know what the top motivator of performance is—and, amazingly, it’s the factor those survey participants ranked dead last. It’s progress. On days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak. On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest. 
GreatWorkday_Amabile.gif
“You can proactively create both the perception and the reality of progress. If you are a high-ranking manager, take great care to clarify overall goals, ensure that people’s efforts are properly supported, and refrain from exerting time pressure so intense that minor glitches are perceived as crises rather than learning opportunities.
Cultivate a culture of helpfulness. While you’re at it, you can facilitate progress in a more direct way: Roll up your sleeves and pitch in. Of course, all these efforts will not only keep people working with gusto but also get the job done faster.”

Teresa M. Amabile is the Edsel Bryant Ford Professor of Business Administration at Harvard Business School. Steven J. Kramer is an independent researcher and writer based in Wayland, Massachusetts

In short, we believe Towers Waston summarized it best in their report:

Companies are running 21st-century businesses with 20th-century workplace practices and programs. 

 

beacon and the Engagement Gap

How does beacon help battle the Engagement Gap? We simplify, support and automate a set of complementary, evidence-based, high-performance work practices, which includes; ensuring that goals are clear, people’s efforts are properly supported, progress is easy to measure and see, and that collaboration occurs to execute the most important work.

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Death By Growth

There is no easy way to say this, organizations don't scale well using traditional management practices. In fact, the returns on productivity for adding more people are actually sublinear; which means adding a person doesn't get you a full person's contribution. Just listen to what Geoffrey West, Distinguished Professor and Past President of the Sante Fe Institute has to say about it:

"After buying data on more than 23,000 publicly traded companies, Bettencourt and West discovered that corporate productivity, unlike urban productivity, was entirely sublinear. As the number of employees grows, the amount of profit per employee shrinks. West gets giddy when he shows me the linear regression charts. "Look at this bloody plot," he says. "It's ridiculous how well the points line up." The graph reflects the bleak reality of corporate growth, in which efficiencies of scale are almost always outweighed by the burdens of bureaucracy. "When a company starts out, it's all about the new idea," West says. "And then, if the company gets lucky, the idea takes off. Everybody is happy and rich. But then management starts worrying about the bottom line, and so all these people are hired to keep track of the paper clips. This is the beginning of the end."
The danger, West says, is that the inevitable decline in profit per employee makes large companies increasingly vulnerable to market volatility. Since the company now has to support an expensive staff -- overhead costs increase with size -- even a minor disturbance can lead to significant losses. As West puts it, "Companies are killed by their need to keep on getting bigger."

TalentAsProfitDriver.png

As the graphic, excerpted from a McKinsey study, illustrates exactly what West and Bettencourt found. As companies grow, their profit per employee drops. Yes, these are very large enterprises. Does this occur on a smaller scale? Our first-hand experience working with enterprises as small as 25 would indicate it does.

The next obvious question is how can you contain the "burdens of bureaucracy" so growth doesn't kill your organization? If so, how?

Something to consider as you grow your team or enterprise.

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Closing the Science-to-Business Gap

 If you think of the items we have outlined in the Noise section as symptoms, the Science-to-Business Gap should be classified as one of the diseases that causes these symptoms. I'll write about four other diseases in future posts (Sublinear Productivity, Strategy-to-Performance Gap, The Engagement Gap and Organizational ADHD). Each of these produces a number of unwanted symptoms and impediments to good performance in your organization. If you can head these off before they take root then you'll be ahead of your competitors.

“If we want to strengthen our companies, elevate our lives, and improve the world, we need to close the gap between what science knows, and what business does.”

Daniel Pink

Drive: The Surprising Truth About What Motivates Us

Closing the gap between research and practice (or what science knows and what business does) represents a change from the dominant approach to management behaviour – which operates more on intuition, anecdote and experience. 

“Most managers are notoriously subjective, prone to manage by anecdote, quick to adopt best practices, and fond of big, visible initiatives...” McKinsey Quarterly, 2006, Number 3

And if we want to move away from commonly used management practices, we need to understand that change itself is a difficult process.

According to the authors of Switch and Made to Stick, “the primary obstacle is a conflict that's built into our brains. Psychologists have discovered that our minds are ruled by two different systems—the rational mind and the emotional mind—that compete for control. The rational mind wants a great beach body; the emotional mind wants that Oreo cookie. The rational mind wants to change something at work; the emotional mind loves the comfort of the existing routine. This tension can doom a change effort—but if it is overcome, change can come quickly.”

The second part of the challenge is answering the question, “what do we change TO?” If you are operating based on experience and intuition now, what approach do you rely on? Do you just pick one of the billion books out there trying to sell you on the latest management fad (while selling out theatres on the rubber chicken circuit)?

Our goal is to avoid any whiff of a fad and stick to the properly-researched territories. So, rather than follow any “model” which espouses particular techniques, we like the approach of Evidence-Based Management, which “is a commitment to finding and using the best theory and data available at the time to make decisions.” We see this as a practical way to bridge the gap between science and business.

The 5 Principles of Evidence-Based Management

  1. Face the hard facts, and build a culture in which people are encouraged to tell the truth, even if it is unpleasant.
  2. Be committed to "fact based" decision-making -- which means being committed to getting the best evidence and using it to guide actions.
  3. Treat your organization as an unfinished prototype -- encourage experimentation and learning by doing.
  4. Look for the risks and drawbacks in what people recommend -- even the best medicine has side effects.
  5. Avoid basing decisions on untested but strongly held beliefs, what you have done in the past, or on uncritical "benchmarking" of what winners do.

There is a significant movement in medicine to apply Evidence-based Management. We think it's time for businesses to catch up.

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Roger that: Roger Martin on Management Systems

I'm looking forward to getting my hands on Roger Martin and A.G. Lafley's upcoming book Playing to Win: How Strategy Really Works, which is due out later this month. But in the meantime I've been reading a couple of their teaser articles in HBR and Rotman Magazines. This passage caught my attention:

The last of the five essential questions is about management systems – the systems that build, support and measure a strategy. This last question is typically the most neglected, but is no less crucial to effective strategy than the others. Even if the other four questions are well answered, a strategy will fail if management systems that support the choices and capabilities are not established as well. Without supporting structures, systems, and measures, the strategy will simply be a "wish list" – a set of goals that may or may not ever amount to anything. To truly win, an organization needs systems in place to support and measure the strategy. It needs robust process for creating, reviewing, and communicating about strategy; it needs structures to support the core capabilities; and it needs specific measures to determine whether the strategy is working (or not).

The article this was excerpted from is called A Playbook for Strategy: The Five Essential Questions at the Heart of Any Winning Strategy, and was published in the Rotman Magazine Winter 2013. As always, Roger has produced some well considered and thought provoking work. You should give this article a read for a quick preview of the book's content.

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Okay, Bosses Suck. But Why?

There have been some fairly depressing findings being published over the last couple years about the failure of managers/bosses in business. One such study undertaken by Michelle McQuaid was particularly bleak.

The study found that: 

  • Only 36% of Americans are happy at their job.
  • 65% say a better boss would make them happy while 35% choose a pay raise
  • 31% of employees polled feel uninspired and unappreciated by their boss, and close to 15% feel downright miserable, bored and lonely.
  • Only 38% of those polled describe their boss as “great,” with 42% saying their bosses don’t work very hard and close to 20% saying their boss has little or no integrity.
  • Close to 60% of Americans say they would do a better job if they got along better with their boss.
  • Close to 70% of those polled said they would be happier at work if they got along better with their boss, with the breakdown equal amongst men and women, but younger workers in their 20s and 30s skewed even higher (80%).
  • Over half (55%) of those polled, think they would be more successful in their career if they got along better with their boss, with 58% in managerial and professional careers saying so, and only 53% in service and manual labor positions feeling that way.
  •  In terms of the impact a boss has on employee health, 73% of those in their 20s and 30s said their health is at stake, while only 40% of those 50 and older felt that way.
  • When stress levels rise at work, a disturbing 47% say their boss does not stay calm and in control. Although 70% of boomers polled say their boss doesn’t lose his/her cool in times of stress.
  • Only 38% of Americans will thank their boss on National Bosses Day with most believing that their boss wouldn't care enough to bother. Close to 10% said they would use the day as an opportunity to talk to their boss and improve the relationship.

Studies like this are important in identifying and baselining the situation at work. Clearly there is much to be done. But I can't help but think that rather than blaming "bosses" and working to avoid them or "manage" them, that we need to think about the systemic reasons why they are failing their teams? What are the root causes?

If we understand the root causes, perhaps we can help change the conditions for managers and the managed? Rather than just creating strategies for finding a less-crappy manager.

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The Enterprise Software Sh*t Show

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Happy New Year.

I'm getting all the same "really excited it's 2011" tweets, blog posts and emails you are. I'm really pleased that so many people are looking forward to the new year. It's also cool to see others being zen and thankful as well for what 2010 brought them...we all have a lot to be thankful for.

I'm an optimist at heart...really...I don't think you can be a true entrepreneur if you're not an optimist. Sometimes, you have to smoke your own rope just to keep going. But after 20+ years of doing this, I have also developed a fair degree of "cautious optimism" and a healthy degree of paranoia (see Andy Grove). My personality definitely consists of large doses of both Grumpy Old Men and the Dude (minus the drug abuse, "man").

So, it strikes me as somewhat lighthearted, and perhaps a bit foolish that I see signs of bubble-like frothiness in the software business again. I'm no Noriel Roubini, but things feel a little wonky to me.

Here's why my knickers are bunching-up:

The Consumerization of Enterprise Software
It used to be that the software we employed for work was dictated by our organization, and the procurement process was somewhat orderly (read slow and cumbersome) and predictable. Selling into these organizations required skill, patience and experience (and the resulting bag-carrying, highly-commissioned salesperson).

Just like other industries that are being upended (music, publishing, television, advertising, etc.), enterprise software is changing due to software now being pulled into the organization by end-users and adopted at work because of the ease of acquisition/adoption/use and the low (if any) cost.

This represents a complete 180 from the "olden days" (as my 9 year-old likes to say). Or, as I've heard a little too much in the past year a "total 360." [Never quite understood how people miss the fact that a doing a 360 represents landing where you started...oh well, another blog post perhaps.]

Generational Differences within the Enterprise
The web has been around long enough now that you can see clear differences between people in their 40's and 50's and the next youngest cohorts. Growing up with the personal computer (Jesus, does anyone call it that anymore?), the web, mobile phones, Skype, and the like have created different expectations of autonomy, privacy, engagement, leadership...you name it. And settling for the previous era's enterprise software tools doesn't sit very well.

Minimum Viable Products for the Enterprise
While there is a huge opportunity to revisit mature enterprise software segments to gut them of their feature-fat and value-lacking complexities, there still needs to be enough thought and base-level of feature functionality so as to actually deliver meaningful value for the organization. I love the simplicity of many of the mobile and web apps I'm seeing out there today, but if I have to cobble 10 of them together to actually get something useful done at work, then I think we might be trending a little too far toward the Minimum part of Minimum Viable Products.

Importance and Influence of Mobile and Tablet Software
I think I read somewhere that 50% of Fortune 500 companies had purchased iPads for piloting enterprise implementations in 2010. Not sure of the source, or even if that's true. But if it is remotely correct...holy flying pails of cow dung.

Regardless of the veracity of those figures, there's no doubt the take-up of mobile applications has been huge, and the influence and importance of that movement has huge implications for enterprise developers like us.

The Insignificant (and continuously falling) Barriers to Market Entry
Given the global level of connectivity and the (seemingly) zero cost of the tools of production it doesn't take much for someone to launch themselves into the software business. Any barrier to entry that used to exist 10 years ago (other than market knowledge/subject matter expertise) should probably be seen as zero.

The Instability of the Global Economic Recovery
Okay, I'll admit it. Sheepishly. I have some post secondary education in Economics. Fairly useless mind you, but some theoretical understanding (hence useless) of how economic systems are supposed to work. And this makes me very nervous about our current global situation. I just don't see how societies around the world can amass such huge levels of personal and government debt without long-term implications. I guess I skipped that part of my undergrad classes.

Despite the above, there are many reasons to be optimistic about opportunities in the Enterprise Software market. But I think you'd be equally daft to ignore the signs that it isn't all rosy and there are significant challenges to succeeding in these turbulent times.

So, a cautiously optimistic Happy New Year to my Enterprise Software brethren.

(Wow, that was a crazy stream of consciousness post....I'll have to elaborate on each of these items in future posts as I've just skimmed the surface).

 

 

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You DIDN'T Have Me At Hello: Social Enterprise Software

I like Dion Hinchcliffe's column on Enterprise Web 2.0. I don't always agree with him, and that's good. He always has an interesting perspective. I urge you to check his work out if this kind of thing interests you (just one example):

categorizing_enterprise_social_software.png

But you'll need to excuse me for a moment while I rant ever-so-slightly.

A whole pile of the software that Dion and many others write about are technology in search of a problem to solve. Sure, there's a lot to admire when playing with these Twitter-like, Facebook-like or Google App-like applications. Down to the very last one, they all contain some interesting piece of technology. And perhaps some of them have a clever incremental, beachhead-building roll-out strategy where the real value is yet to be unveiled...and maybe I'm a couple sandwiches short of a picnic...

But I can't find the PROBLEM they are solving?

Or what VALUE they are trying to provide?

Or what OUTCOME are they trying to bring about?

Just for fun, pick a few of the 70+ "vendors" now in the "Social" Enterprise software space and see if you can actually tell what business/individual/world problem they are aiming to solve? Isn't that why we're supposed to be inventing software in the first place?

I know...it's gotta be me. Usually is.

 

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Wait!? So, Goals Aren't Good Either?

There are a lot of things business people take for granted. Those things that are so deeply engrained in our operating philosophy that we just accept them without any critical judgement whatsoever. Let's add another suspect to the list; goals.

Sacrilege you cry? Preposterous? WTF!? Perhaps, but the evidence is mounting.

Firstly, Pfeffer and Sutton introduced an interesting idea in the Knowing Doing Gap:
"The foundation of any successfully run business is a strategy that everyone understands coupled with a few key measures that are routinely tracked."

They go on to say, "the dictum that what is measured is what gets done has lead to the apparent belief that if a company measures more things, more will get done. But that is not at all the case. Southwest Airlines focuses on the critical measure of lost baggage, customer complaints and on-time performance - the keys to customer satisfaction and therefore to success in the airline industry."

Even one of my all-time favourites, Peter Drucker, is famous for saying something like, "If you can't measure it, you can't manage it."

Notice the word "measures" was used rather than goals. Is this a frivolous distinction, or is it meaningful? I don't honestly know. But like the movement toward approaches like Beyond Budgeting, it appears that measuring something isn't bad, but perhaps setting a hard goal or target just may be.

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From the book Drive, by Daniel Pink, there is a suggestion that goals should be preceded by a warning label: "Goals may cause systematic problems for organizations due to narrowed focus, unethical behaviour, increased risk taking, decreased cooperation, and decreased intrinsic motivation." Ouch.

In the chapter summary, Pink summarizes the most compelling research with the following bullets:

Carrots and Sticks: Seven Deadly Flaws

1. They can extinguish intrinsic motiviation.
2. They can diminish performance.
3. They can crush creativity.
4. They can crowd out good behaviour.
5. They can encourage cheating, shortcuts, and unethical behaviour.
6. They can be addictive.
7. They can foster short-term thinking.

This has interesting implications for enterprises of all shapes and sizes. Especially, for those companies trying to build products to help enterprises reach their potential; like us.;)

 

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Forget Multitasking

You know the old expression "one thing at a time?" Many expressions, stories and fables tend to stick around because they resonate with us. Because there is a deep truth to them.

You'd think being a technology guy (who loves his gadgets), that I'd be all over trying to do several things at once. Believe me, I've tried. It's just that I feel like I'm running on the spot and not getting anywhere. I've marveled at people in my industry that seem to effortlessly multitask (inevitably while highly caffeinated) and have felt inadequate in their presence.

So, I did a little digging to see if I was missing some critical multitasking gene...turns out there has been plenty of decent research on the topic.

Here's a little bit: http://search.apa.org/search?query=multitasking

In short, we're just not wired to multitask effectively. Cognitive switching costs are a big part of the problem. We just don't switch from one thing to another as easily as some might think.

Whew.

Now I can go back to work. One thing at a time.

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"Social Business?" WTF?

This one cracks me up. Yes, I'm aware that "marketing" types love to attach themselves to catchy, hip phrases to get attention for the products they work on and companies they work for, but this one is pee-inducing. "Social" business. ROFL.

Are these people 10-years old? Actually, my 10 year-old daughter wouldn't even use such a phrase. She knows better. When exactly did business stop being a social enterprise and start being a "Social Enterprise?"

This will have to be put right up there with other idiotic marketing references like "viral videos." This reeks of a trend of glossing-over the fact that your cutting-edge technology solution isn't really a solution to any real problem, it's just technology looking for a buyer who is a sheep. Hate to break it to you technology developers and marketers...that's not a good strategy. If I need to explain why...well, then you're pooched.

Probably just me though...haven't had my second coffee yet.

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