Open-book Management Software

Hard Targets; Limp Performance

Top 5 Ways to Come Up Short

 

Setting effective targets for your enterprise is difficult to do well. Targets that can incorporate and respect your culture, align and motivate resources and successfully support your strategy don't come without a great deal of thought and effort. And implementing the wrong targets can lead you in directions that can be harmful to your business and your people.

Sure, we all know about the guidelines for SMART goals, but you can meet all those criteria and still end up with unsatisfying results.

Here are our Top 5:

1. Missing The Point

Targets need to be created to support specific Objectives, and are not in themselves the point. Without an Objective or Desired Outcome that you're striving to make reality, targets are potentially harmful.

 

2. Rushing In

"You can't rush art!" One of my favourite lines from Toy Story 1. My kids still quote it years later. And while target setting may be part science, it is also definitely part art. You've got to put in the time to get the critical number or few critical numbers that really drive performance.

 

3. Making It All About You

Leaders sometimes get confused about how to balance the short-term needs of the business and it's stakeholders and the long-term health of the company. Targets need to look beyond this year's bonus for leadership.

 

4. Neglecting Your Zones

Where are you strong and where are you weak? If you've reviewed your SWOT recently, you need to pick targets that help build on your strengths and diminish your weaknesses.

 

5. Quantity Over Quality

The old saw that "What gets measured gets done," is true up to a point. A limited number of targets is best. You can't continue to add target after target and expect all of them to be met.

 

There are innumerable ways to bungle target-setting. These are but five that spring to mind for us. What about you? What do you think are the most deadly pitfalls? Please give us your comments below.

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Our (Short) Story

 

I'm often asked what mercanix does and why we started the company. As usual, I flip the question around and answer the second part first. Because we think it's more important that people know "why" rather than the "what." The what part may change over time, but the why never will. And we also don't believe people buy products or companies as much as they support ideas and other people who share their values. Some call this buying "meaning." We certainly don't come to work every day because we're building a product. We spend our working hours trying to create value for others and making lives a little better.

We started mercanix because we're not satisfied with how "work" gets done today. So much of an organization's potential - and the people who work there - is squandered each and every day because of very avoidable, sub-optimal practices. If you've ever had the good fortune to feel the magical flow of high-performance teamwork, at work or at play, you'll know how things can be. Most of the time though, we don't experience how it can be at work, but rather how it is. We'd like to be able to help tip the balance toward what can be instead.

So, how do we know so much about the right way to do things? We don't. We rely on what we consider to be the best, evidence-based management science that is properly peer-reviewed and tested in the real world. That doesn't guarantee the generalized practices we've built into our tools are perfect; far from it. We keep refining, iterating, learning and adapting to what we and our customers experience. And we do our best not to include practices or approaches in a prescriptive way, but rather in a way that supports good practices without forcing you to do things one particular way. This requires ongoing attention, research, innovation and creativity.

We consider ourselves primarily Software Tool and Die Makers. Yes, we invent and design software tools, but we spend the majority of our time building and refining our original ideas and designs to create better and better tools.

What's a Tool and Die Maker? (excerpt from Wikipedia)

"Tool and die makers are a class of machinists who work primarily in toolroom environments—sometimes literally in one room but more often in an environment with flexible, semipermeable boundaries from production work. They are skilled artisans (craftspeople) who typically learn their trade through a combination of academic coursework and hands-on instruction, with a substantial period of on-the-job training that is functionally an apprenticeship (although usually not nominally today). Art and science (specifically, applied science) are thoroughly intermixed in their work, as they also are in engineering. Mechanical engineers and tool and die makers often work in close consultation. There is often turnover between the careers, as one person may end up working in both at different times of their life, depending on the turns of their particular educational and career path.

What we do is to build software tools that help people and their organizations realize their potential while getting them where they want to go. We recognize we won't be able to help enterprises that have no interest in adopting high performance work practices. Hopefully, we can help organization's that are committed to giving and getting the best from their people and crowd-out competitors that are not as respectful.

If we can help increase the effectiveness of organization's that are mindful, respectful and people-centric we will have added value. That may strike some as corny, unrealistic, or unreasonable but there it is.

Mike

 

 

 

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Why I Love Henry Mintzberg

 

I don't know Henry Mintzberg. I wish I did.

But I've read a bunch of his work and it resonates with me at a deep level for a host of reasons, but primarily because he sees enterprises as a collection of humans, not cogs of production. And secondly, he calls 'em as he sees 'em. He seems fearless in this regard.

If you've never read any of his work, and you want to get a sense of exactly what I'm talking about, just read this one short article in the Economist. This guy throws with serious heat.

 

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Game-ify This

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Any man who can drive safely while kissing a pretty girl is simply not giving the kiss the attention it deserves. 

Albert Einstein


I've always loved this quote. Although, I would like to understand the context in which it was given. Perhaps it was uttered in the same vein as his quote about intelligence being the capability to hold two opposing ideas in one's mind at the same time...? Or, sometimes a cigar is just a cigar...I'd like to think he was being literal in this case.

 

Either way, I'm mulling over two things I've seen or read lately and a recurring theme in the industry that's been bothering me. So inevitably, I won't be giving any of them the attention they each deserve.

The two things that have interested me are some of the most recently published research on the neuroscience of leadership and organizational change (thanks to my friend Michael Buckstein) and the website funtheory.com (thanks to Dan Pink for this one). The other item is the annoying present theme of "gamification."

First the interesting.

In issue 43 of strategy + business, authors David Rock and Jeffrey Schwartz summarize some of the latest findings in the neuroscience of leadership that would have been considered "counterintuitive or downright wrong only a few years ago:"

 

 

Change is pain. Organizational change is unexpectedly difficult because it provokes sensations of physiological discomfort.
 


Behaviourism doesn't work. Change efforts based on incentive and threat (the carrot and the stick) rarely succeed in the long run.
 


Humanism is overrated. In practice, the conventional approach of connection and persuasion doesn't sufficiently engage people.
 


Expectation shapes reality. People's preconceptions have a significant impact on what they perceive.
 


Attention density shapes identity. Repeated, purposeful and focused attention can lead to long-lasting personal evolution.
 


As usual, this excerpt doesn't do justice to the entire article.

 

After reading this article and mulling it over a few days, I got wind of the thefuntheory.com. I love the idea...making behaviour change fun. The winner of the contest was a speeding lottery where the goal was to make obeying the speed limits fun. It's entertaining to review some of the submissions. But I have to wonder given the above, does any of this lead to long-term behaviour change? I know it's a theory (hence the name) and probably more of a marketing scheme than anything...but more data please.

Now, moving completely to the extreme end of the spectrum...gamification. It sounds suspiciously like technology in search of a problem again. Where's the evidence that this is effective in a workplace? I know, I'm channeling Grumpy Old Men again, but c'mon...if people have to be "gamed" at work to do things, shouldn't they be looking for alternate employment? 

Isn't this also another form of carrot and stick incentives which we know don't work in many scenarios? As usual, I have more questions than answers, but this one is giving me the itchy scratchy's right now...perhaps I'll be a born-again convert with the proper evidence.

 

 

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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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Is Declining Enterprise Productivity Hackable?

 

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I work pretty hard at trying to manage my signal-to-noise ratio when it comes to social media. So I follow very few people and almost never check FB. But thanks to following Vinod Khosla on Twitter, I followed his link to a NY Times Magazine article about Physicist Geoffrey West and his quest to explain cities, and in particular urban population growth, with mathematical formulas. It's a great read.

What interested me most was that West and his collaborator Luis Bettencourt have started to turn their mathematical modeling toward companies as well:

"But it turns out that cities and companies differ in a very fundamental regard: cities almost never die, while companies are extremely ephemeral. As West notes, Hurricane Katrina couldn't wipe out New Orleans, and a nuclear bomb did not erase Hiroshima from the map. In contrast, where are Pan Am and Enron today? The modern corporation has an average life span of 40 to 50 years.

This raises the obvious question: Why are corporations so fleeting? 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."

For West, the impermanence of the corporation illuminates the real strength of the metropolis. Unlike companies, which are managed in a top-down fashion by a team of highly paid executives, cities are unruly places, largely immune to the desires of politicians and planners. "Think about how powerless a mayor is," West says. "They can't tell people where to live or what to do or who to talk to. Cities can't be managed, and that's what keeps them so vibrant. They're just these insane masses of people, bumping into each other and maybe sharing an idea or two. It's the freedom of the city that keeps it alive."

This got me thinking two things.

Firstly, is profit per employee the only factor that should be used in this scenario? Perhaps, since we're looking at the long-term viability of these enterprises. It may be a good proxy for an enterprises' health, but it is pretty one-dimensional when considering the kind of impact good organization's can make on society.

Secondly, I wondered how interesting it would be to see if enterprises using Evidence-based Management practices fared as a subset of this group? That is, enterprises lead and managed using well-known, evidence-based high-performance practices rather than managing by intuition, anecdote and myth.

Is it possible to hack the sublinear productivity returns as companies grow by applying Evidence-based Management practices? That would be a very interesting experiment. Something to do in our spare time perhaps.

 

 

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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):

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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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Brain Science and Management

Our apologies for the long gap in posts.

A persistent theme for us at mercanix is trying to close the gap between what science knows about things like motivation, effectiveness, productivity, communication and teamwork and what enterprises actually do on a day-to-day basis.

To that end, we are constantly reviewing a wide spectrum of research to see how it applies (if at all) to increased performance at work. If there is sufficient, long-term, fact-based, peer-reviewed evidence that the research is credible and could be applied to create better work environments, we look for opportunities to incorporate the science into our solution.

Of course, an important caveat in all this is, "first do no harm." We won't introduce anything into our solution if it poses a threat to disrupting the environment and performance you are already experiencing.

We find the need to be as evidence-based as possible; looking for the facts and proof behind the latest research first. Then we like to reflect and ruminate to see if we, or other reputable sources, can poke holes even in the cases where the evidence is solid. In doing so, we avoid incorporating the latest fad or buzzworthy movement that isn't based on any credible research.

Interestingly, findings from from social, cognitive and affective neuroscience are being used to explain how we are motivated to minimize threats and maximize rewards which manifests itself in a number of ways.

 

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David Rock has compiled some interesting research and created what he calls the SCARF model for collaborating with and influencing others.

S - Status
C - Certainty
A - Autonomy
R - Relatedness
F - Fairness

"While the five domains of SCARF reflect core brain networks of greatest significance when it comes to collaborating with and influencing others, understanding these drivers can help individuals and organizations to function more effectively, reducing conflicts that occur so easily amongst people, and increasing the amount of time people spend in the approach state, a concept synonymous with good performance."

As Rock says, the SCARF model points to more creative ways of motivating that may not just be cheaper, but also stronger and more sustainable. Have a look at his work at the NeuroLeadership Institute.

This is exactly the kind of thing we like to keep our eye on to see if the facts line up with what the research suggests. We'll keep you posted on this one.

 

 

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The Way We're Working Isn't Working

I have to admit I'm a sucker for a good bibliography and notes sections in a book. The first thing I do when I grab a business text is to scan the notes and bibliography to see what research the author draws from. This provides me a snapshot of the direction of their work, as well as potentially new and interesting research I haven't read.

When I picked up The Way We're Working Isn't Working a few weeks back, I really liked the bibliography because it showed primary research I have seen referenced before in a few other (good) books. But this book seemed to be using it in a different way/context; and sure enough it does.

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I love this book. The first chapter title totally resonated with me, (More and More, Less and Less) and typifies how enterprises have somehow forgotten that actual people drive their success and not multi-tasking, data-hoovering, automatons who don't have lives to live outside of work.

The authors, Tony Schwartz, Jean Gomes and Catherine McCarthy do a bang-up job explaining the theory and science behind improving enterprise performance using a multidisciplinary approach that incorporates physical, emotional, mental and spiritual components.

Our Core Needs:

Significance - Spirit
What I stand for and believe in - what gives me a sense of meaning

Self-Expression - Mind
Freedom to develop and express my unique skills and talent

Security - Emotions
Feeling appreciated, cared for, valued for who I am and what I do

Sustainability - Body
Being able to regularly renew and take care of myself, so I'm healthy, fit and resilient

Survival
Material needs and desires

To many, these ideas are going to seem "fluffy" or "touchy feely" or that Schwartz and his coauthors are stretching the applicability of this science a bit too far. I would wholeheartedly disagree. Look around and observe. Out-dated management practices are everywhere and people's precious time is being squandered because of it.

 

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The Abundant Organization

As we are preparing to bring our solution to market, we've been searching for a characterization of just what kind of an organization is the "perfect" customer for what we offer. We've batted around the term Authentic Organizations up to this point as we like the dual meaning of "genuine" and "entitled to acceptance or belief because of agreement with known facts or experience," as we are focusing on using the best management science and research to help inform our approach. Authentic therefore combines some of the soft part of the mission with the hard science component.

We are engaged in this enterprise because we hope -- even in the smallest of ways -- to enable "Good Work" to occur more often than it does today. Those who are involved in doing "Good Work" will have better lives both at work and outside of work because of it. We spend an awful lot of time at work as a society, so we believe improving work lives can make a meaningful impact.

But using the term Authentic Organization left a little something to be desired. It was part of the characterization, but not the whole thing. Now I know why.

I've had the good fortune to pick up a copy of a book called The Why of Work, by Dave and Wendy Ulrich and they introduce an idea that is much more fulfilling. They call it the Abundant Organization.

Here's their synopsis:

"An abundant organization is a work setting in which individuals coordinate their aspirations and actions to create meaning for themselves, value for stakeholders, and hope for humanity at large. An abundant organization is one that has enough and to spare of the things that matter most: creativity, hope, resilience, determination, resourcefulness, and leadership.

Abundant organizations are profitable organizations, but rather than focusing only on assumptions of competition and scarcity, abundant organizations also focus on opportunity and synergy. Rather than accepting the fear-based breakdown of meaning in hard times, abundant organizations concentrate on bringing order, integrity, and purpose out of chaos and disintegration. Rather than restricting themselves to narrow, self-serving agendas, abundant organizations integrate a diversity of human needs, experiences and timetables.

In good times and in hard times, abundant organizations create meaning for both the employees who comprise them and the customers who keep them in business. Employees, customers, investors, and society benefit when employees find meaning at work and when companies give meaning to society. This logic applies to small and large organizations, to public agencies and private enterprises, to local storefronts and global conglomerates."

Abundant Organization it is, then. Thank you, Dave and Wendy Ulrich.

 

 

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