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Streamline Training & Documentation: November 2007
November 30, 1907 was a red letter day — the eminent scholar Jacques Barzun, was born that day in Créteil, France.
My most extensive exposure to Barzun's work was reading an abridged version of his study of Hector Berlioz and of Berlioz's era. A sample:
This was the only time that Berlioz asserted, indirectly but unmistakably, his priority in the musical leadership of the century, and he did this not because his claim was being challenged — he had made no claim — but because the doctrine of "ancestors and descendants" was being used to dispose cavalierly of the one claim he did make about his music, the claim in any work of art that it shall be judged for what it brings of new joy. (p. 396)
The Handbook's page on prediction markets provides a helpful summary of types of prediction markets, research on their nature and reliability, and ideas for further research.
The list of benefits of prediction markets is a helpful reminder of why the topic is important. As summarized by the (typo-prone and grammar-challenged) collective authorship of the Handbook, prediction markets are valuable because:
Traders can correct their own biases, assuming they can see how others are voting.
Traders get a bigger picture that has a high signal-to-noise ratio. The aggregated prediction is a reasonably good summary statistic of many people's reading of the situation.
Organizations can be more agile, since agility depends partly on being able to better anticipate the future.
Availability of internal prices (shadow prices) leads to more precise asset allocation. For example, using a prediction market at a firm could lead to more individualized service if it informs sales staff about how much it would cost to accelerate orders to satisfy a particularly important customer.
Contingent contracts can aid decision making. (However, one needs to be cautious about interpreting contract prices as probabilities for contingencies, since it is easy to mistake correlation for causation.)
You can read here about what several of MIT's collective intelligence researchers — Thomas W. Malone, Alex (Sandy) Pentland, Tomaso Poggio, Drazen Prelec, and Josh Tenenbaum — have to say concerning "prediction economies," a step beyond individual prediction markets.
As a starting point for exploring the ASQ resources, you might look at the outline ASQ provides of seven basic quality tools:
Cause-and-effect diagram — A tool that identifies many possible causes for an effect or problem and sorts ideas into useful categories. The diagram is drawn so as to illustrate the main causes and subcauses leading to an effect (symptom). It is also referred to as the “Ishikawa diagram,” because Kaoru Ishikawa developed it, and the “fishbone diagram,” because the complete diagram resembles a fish skeleton.
(click to enlarge)
Check sheet — A simple data recording device. The check sheet is custom designed by the user, which allows him or her to readily interpret the results. (Check sheets are often confused with checklists. A checklist is a tool for ensuring all important steps or actions in an operation have been taken.)
Control chart — A chart with upper and lower control limits on which values of some statistical measure for a series of samples or subgroups are plotted. The chart frequently shows a central line to help detect a trend of plotted values toward either control limit.
Histogram — A graphic summary of variation in a set of data. The pictorial nature of a histogram — showing the frequency with which different values, or ranges of values, occur — lets people see patterns that are difficult to detect in a simple table of numbers. (ASQ provides a tool (xls) for producing a histogram.)
Pareto chart — A graphical tool (bar chart) for ranking causes from most significant to least significant. It is based on the Pareto principle, which was first defined by Joseph M. Juran in 1950. The principle, named after 19th century economist Vilfredo Pareto, suggests most effects come from relatively few causes; that is, 80% of the effects come from 20% of the possible causes. (ASQ provides a tool (xls) for producing a Pareto chart.)
Scatter diagram — A graphical technique to analyze the relationship between two variables. Two sets of data are plotted on a graph, with the y-axis being used for the variable to be predicted and the x-axis being used for the variable to make the prediction. The graph will show possible relationships. Note, however, that the two variables can appear to be related, when they aren't in any direct way. Those who know most about the variables must evaluate whether or not the apparent relationship is real.
Stratification — A technique that separates data gathered from a variety of sources so that patterns can be seen. In the case of a process, the tool uses a graphical representation of the steps in the process to make it easier to understand. (AKA "flowchart.")
(Sources: The Quality Toolbox, 2nd ed., by Nancy R. Tague (ASQ Quality Press, 2004), p. 15; ASQ glossary.)
The December issue of the Harvard Business Review has a thought-provoking interview with John M. Gottman, a psychologist who has been studying marriage and divorce for about 35 years.
Diane Coutu, a senior editor at HBR, interviewed Gottman about his research, with the idea that readers could decide where Gottman's findings about personal relationships could apply to their relationships in the workplace.
The whole interview — only six pages, including the introduction — is worth reading. As an example of Gottman's insights, here is the start of his answer to Coutu's question concerning his biggest discovery:
It sounds simple, but in fact you could capture all of my research findings with the metaphor of a saltshaker. Instead of filling it with salt, fill it with all the ways you can say yes, and that's what a good relationship is. "Yes," you say, "that is a good idea." "Yes, that's a great point, I never thought of that." "Yes, let's do that if you think it's important." You sprinkle yeses throughout your interactions — that's what a good relationship is.
Another particularly resonant comment comes in response to the question, "What would you suggest we be on guard against in relationships?" Gottman replies:
What I call the Four Horsemen of the Apocalypse — criticism, defensiveness, stonewalling, and contempt — are the best predictors of breakup or continued misery. Readers familiar with my work will remember that I consider contempt to be the worst ... Inevitably, contempt leads to greater conflict and negativity.
The December issue of Scientific American has an informative article on "The Semantic Web in Action," by Lee Feigenbaum (Cambridge Semantics), Ivan Herman (World Wide Web Consortium), Tonya Hongsermeier (Partners Healthcare System), Eric Neumann (Clinical Semantics Group Consulting), and Susie Stephens (Eli Lilly).
What is the Semantic Web? The Scientific American article defines it as:
A set of formats and languages that find and analyze data on the World Wide Web, allowing consumers and businesses to understand all kinds of useful online information.
A more elaborate explanation (here, somewhat edited) is provided in an FAQ published by the World Wide Web Consortium (W3C), which is developing standards for the Semantic Web. According to W3C,
The vision of the Semantic Web is to extend principles of the Web from documents to data. This extension will allow greater fulfillment of the Web’s potential, in that it will allow data to be shared effectively by wider communities, and to be processed automatically by tools, as well as manually.
The Semantic Web allows two things.
It allows data to be surfaced in the form of real data, so that a program doesn’t have to strip the formatting and pictures and ads off a Web page and guess where the data on it is.
It allows people to write (or generate) files which explain — to a machine — the relationship between different sets of data. For example, one is able to make a “semantic link” between a database with a “zip-code” column and a form with a “zip” field, affirming that they actually mean the same — they are the same abstract concept. This allows machines to follow links and hence automatically integrate data from many different sources.
W3C goes on to explain that Semantic Web technologies can be used in a variety of application areas, including:
Data integration — Data in various locations and various formats can be integrated in one, seamless application.
Resource discovery and classification — To provide better, domain-specific search engine capabilities.
Cataloging — To describe the content and content relationships available at a particular Web site, page, or digital library.
Intelligent software agents — To facilitate knowledge sharing and exchange.
Content rating — For example, see the descriptive vocabulary of the ICRA (formerly the Internet Content Rating Association), used to communicate the nature of a Web site's content to interested parties, such as parents.
Describing collections of pages that represent a single logical “document” — As explained in an Oracle white paper (pdf), a single logical document (compound document)can be mapped to a series of component documents/Web pages, an approach which allows updating of the compound document to automatically update the underlying components. Other advantages are that individual components can be included in more than one compound document, and it is easier for a team of authors to work on the compound document.
Describing intellectual property rights for the content of a Web page — An example is provided by the Creative Commons.
The applications described in the Scientific American article include:
Improved search for the Web, wikis, blogs, podcasts, and discussion groups
Social networking
Drug discovery
Research on genetically mediated disease processes
Personalized health care
Recognizing disease outbreaks quickly
Decision support for doctors and other clinicians
Controlling intellectual property
For further insight concerning how to develop Semantic Web applications, you can explore the tutorials for which W3C provides links.
As I gradually gear up for a July trip to Greenland, I have my eye out for information on how ship crews are (or can be) trained to maneuver in ice conditions, a topic that has new prominence due to the recent sinking of a cruise vessel in the Antarctic.
Transas Group has developed simulator software — an Ice Navigation module — that covers the specific skills ice conditions require:
single point mooring
proceeding in broken ice
proceeding along the solid ice edge, bumping against the edge
proceeding in open pack ice, in ice holes, and in patches of ice-free water
following an icebreaker (training in watch service procedures for maintaining your ship's place in the convoy, maintaining communication between the ship, icebreaker and other ships in the convoy)
proceeding along the channel in a convoy
using radar information while sailing in ice conditions
using the ice chart in the ECDIS (Electronic Chart Display and Information System)
Transas promises
... accurate modelling of the ship-ice interaction (such as hydrodynamic interaction with the ice surface, especially within the ice field; hull friction with the edge of the ice field, and bumping into the ice field), high quality visualization of various ice surface types, nocturnal conditions, visibility effects and reflections, ensure the maximum realism and training efficiency.
The software also tracks current ice pressure on the vessel hull and its change history so that the "critical pressure value" can be defined. An alarm sounds when the critical pressure value is exceeded.
In lieu of joining the teeming masses at a local mall, I got together with relatives and a good friend to go to one of my favorite places — the National Zoo on Connecticut Avenue in Washington.
In honor of the panda family who are the stars of the show, here is a video that has become an instant classic in my book:
Laughter is the Best Medicine XVI: Outwitting the Competition
From anecdotage.com, the story of the rotary telephone dial:
Rotary dials were patented in 1891 by Almon B. Strowger, an undertaker in the U.S. Midwest. The story goes that he noticed his funeral-home business was falling off and suddenly realized that the local telephone switchboard operator was the wife of his competitor. He invented the rotary dial so people could make their own connections.
This tale earned an average of 9.26 points on a scale of 1 to 10 from 35 raters.
Laughter is the Best Medicine XV: Trials and Tribulations of Doing Business in Russia
This incident, picked up from anecdotage.com, dates back to 2003:
"When Aleksei Panteliushin turned up at Plutos, his sausage factory in northern Moscow, one frosty morning, he found a gang of robust young men guarding the entrance as blacksmiths replaced the glass door with a steel one and reinforced the bars on the windows. He called the police. They went in, stayed for ten minutes—and left again. He called the internal security agency, the FSB. The same thing happened. He called his lawyer, who tried to go in and was told that if he persisted, they would 'rip his head off'. When Mr Panteliushin at last gained entry, together with a senior police officer, three of the goons introduced themselves as 'Stanislav,' 'Alexander' and 'Sergei'. They said they were Plutos's new owners, and flourished a document from the justice ministry to prove it.
"Shortly afterwards, they invited Mr Panteliushin to a meeting and offered to buy his share in the company at well below market value. They had already got his employees to sell them their shares far too cheaply, on pain of being fired. Mr Panteliushin declined. Instead he wrote a statement, collected supporting signatures from some 40 employees, and — with the thugs openly tailing his car — filed the case with every law-enforcement agency he could think of.
"He was told that the authorities did not get involved in 'ownership disputes'. When he took his woes to his local tax officials, who at least were friendly, thanks to his annual Christmas gifts of sausages, they shrugged and showed him a sheaf of 15 or 20 similar complaints in the same district. A journalist recommended the Economic Security Commission of the Moscow mayor's office, where an official listened to the tale. The next day Mr Panteliushin got a call from a non-governmental organisation called 'Protection of Shareholders' Rights'. This turned out to consist of a pair of affable young men with no address on their business cards, who said they knew those concerned and offered to 'mediate'... The new owners, the mediators said, were now offering to sell the factory back for $6m, several times what it was worth."
The upshot?
"After a local newspaper picked it up, the police started taking an interest [in the story], and he learned that other companies that had been approached about buying his factory were backing off... he and the bandits were waiting it out. Increasingly desperate to sell, they were phoning him for advice on making sausages, and offering to hire him back to run the business."
This item received an average of 10 points on a scale of 1 to 10 from 14 raters.
Laughter is the Best Medicine XIV: Humor Your Talent
Here's an addition to my series of posts on Ford Motor Co. (most recently here), compliments of anecdotage.com:
Henry Ford once enlisted an efficiency expert to examine the operation of his company. While his report was generally favorable, the man did express reservations about a particular employee. "It's that man down the corridor," he explained. "Every time I go by his office he's just sitting there with his feet on his desk. He's wasting your money." "That man," Ford replied, "once had an idea that saved us millions of dollars. At the time, I believe his feet were planted right where they are now."
The average rating for this anecdote from 26 raters was 8.92 on a scale of 1 to 10.
Laughter is the Best Medicine XIII: Thomas Edison, Wordsmith
It seems Thomas Edison was passionate about ... concrete. From anecdotage.com:
One of the metropolitan area's earliest and most outspoken concrete evangelists was Thomas Edison, who built a colossal portland-cement mill in New Village, New Jersey, in 1899, and whose lifetime list of a thousand and ninety-three United States patents includes forty-nine related directly to cement or concrete. For a few years in the early mneteen-hundreds, his company circulated a monthly brochure called The Edison Aggregate, and in 1926 it published an effusively hortatory promotional book called 'The Romance of Cement' (first chapter: 'The Eternal Romance of Cement')."
Bonus material:
Edison cement was used to make concrete for the original Yankee Stadium and for parts of the city's water-supply system. Edison also espoused concrete pianos, concrete phonograph players and concrete bedroom furniture, and pioneered a system enabling builders to cast an entire two-story concrete home (including a fireplace and bathroom fixtures) in a single pour. (Several such homes were build and are still inhabited by happy tenants.)
Seventeen readers gave this Edison story an average rating of 9.71 on a scale of 1 to 10.
"Gentlemen, I take it that we are all in complete agreement on the decision here," General Motors chief Alfred P. Sloan declared during a meeting one day. "Then, I propose that we postpone further discussion," he continued, "to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about."
The average rating from 23 raters was 9.23 on a scale of 1 to 10.
Jeff Taylor, founder of Monster.com (the world's biggest online job-search site), left the University of Massachusetts after five and a half years without earning a degree. Taylor spent much of his time working as a disc jockey in Boston night clubs before starting a recruiting agency (Adion) in 1989.
After venturing into online recruitment, the adventurous Taylor, like Virgin founder Richard Branson, managed to instil a sense of youthful fun and anti-establishment zest into what is basically a boring business. On one occasion, for example, Taylor persuaded attendees at a conference organised by America's Department of Labour to yell "We rock!" at every mention of "human resources," and, at every mention of the new economy, "To the Batmobile!"
Average rating from fiteen raters: 9.53 on a scale of 1 to 10.
Laughter is the Best Medicine X: James Cooley Early in His Career
Collections of business humor, at least the ones I've encountered, are generally distressingly lame. The business anecdotes at anecdotage.com are an exception. I've browsed through them and selected several that I'm particularly fond of. The first:
One day long before his incarnation as a railway mogul, James Cooley worked as a traveling salesman for the Baldwin Locomotive Company.
One day he visited Terence Jackson, sales and purchasing manager of the Delaware and Lackawanna Railroad - a difficult man to see under any circumstances, nevermind for an unknown salesman...
"I would like to see Mr. Jackson," Cooley boldly informed Jackson's secretary, handing her his card. She then rose and disappeared into Jackson's office, where, through the partly opened door, Cooley saw him tear his card in half and throw it in the garbage.
The secretary soon returned and told Cooley that Jackson was unavailable. "May I have my card back?" he innocently asked. Embarrassed, the secretary again disappeared into Jackson's office, returning a moment later with a nickel and a curt message: "Mr. Jackson says that your card was destroyed, but he hopes the five cents will repay the cost of printing it."
Cooley promptly drew another card from his pocket and handed it to the bemused secretary. "Take this back to him," he instructed her, "and tell him I sell cards two for a nickel."
The day I read this particular anecdote, other readers had awarded it an average of 8.97 points on a scale of 1 to 10.
If a team wants to avoid groupthink — reaching agreement without sufficiently investigating whether the course they're settling on is the wisest available — the simple step of asking, "Where might we be wrong?" can stimulate the necessary discussion. So advises Richard Larrick, a professor at Duke's Fuqua School of Business.
As reported by Alix Stuart in the November issue of CFO magazine, an experiment Larrick ran with PhD candidate Al Mannes indicated that arriving quickly at consensus on a decision tends to mean that the decision is suboptimal.
In this regard, Larrick's colleague John W. Payne advises that
group processes have to be actively and repeatedly managed. You've got to make sure that people with unique information share it, or else you're likely to focus only on what is held in common.
Payne cites assembling diverse perspectives as a prerequisite.
Other prerequisites noted by Paul Paulus, a professor of psychology at the University of Texas at Arlington mentioned in a previous post, are using a process that allows everyone to speak without fear of being looked down on for mistakes, encourages people to play devil's advocate (perhaps even assigning someone to play that role), and requires that the group leader be steadfastly impartial.
When the group's task is to generate creative ideas, as opposed to reaching a decision on an issue or problem, Paulus advises combining individual and group work in order to maximize productivity. In other words, have people bring ideas to a brainstorming meeting rather than waiting until they arrive to start cogitating. Then, alternate group discussion and individual thinking.
The leader should not only ensure that people can speak freely, without facing squelching criticism of their ideas, but also encourage the group to keep thinking even after they claim they've run out of steam. The thinking should even extend beyond adjournment. A follow-up meeting can be scheduled if members do indeed come up with further ideas.
Note that Paulus has found it quite feasible to train people to work in highly productive fashion in groups charged with generating creative ideas. You can read more about Paulus' cognitive model of group brainstorming here.
If you are interested in learning more about the Civility Initiative at Johns Hopkins University, headed by Italian professor P. M. Forni (the subject of a previous post), you can read an interview with Prof. Forni posted at the Hopkins website.
One item that particularly interested me was interviewer Amy Landay's opening question: "What led you to civility studies?" Prof. Forni's responds:
I was teaching my Dante's Divine Comedy course to my students one day, here on the Homewood campus, and I looked at them and a thought occurred to me that had never occurred to me before. The thought was, I want my students to know everything that there is to know about Dante, but even if they did and then they went out to be unkind to a little old lady on a bus, I would think that I had failed as a teacher. It was an odd thought, and it stayed with me. And it made me think, What if kindness is as important as art? What if kindness is more important than art, for that matter? I eventually felt comfortable pursuing work on civility not only as a researcher but as an advocate.
I myself put great store by graciousness, so I couldn't help but latch onto Prof. Forni's insights and advice. For instance, when asked why it's important to confront someone who is treating you rudely, Prof. Forni makes the case this way:
We teach others how to treat us by how much we are willing to endure from them. It is better not to endure even micro-indignities if they are really bothering you. Find the strength of character to confront that person in an assertive, nonaggressive way and say, "This is what I feel. This is how I feel when you say that, when you do that. I really wish you didn't." If you keep everything bottled inside, that person will do it again. And again. And again. And some day you explode. And at that point, the other person will say, "What is this? You never told me that this bothered you so much. How was I supposed to know?" So now you are doubly at fault, first because you've exploded, and then because you didn't say what you felt when you were the victim of that behavior.
Andreessen Predicts a Purer Hollywood Model in Hollywood
I continue to benefit from reading Mark Andreessen's blog, though some of his views, such as those on the advisability of studying the liberal arts in college, are nearly opposite to mine.1
A recent Andreessen post particularly interested me because it offers a compelling picture of the likely evolution in Hollywood itself of the "Hollywood model" for handling projects. The Hollywood model was the subject of an earlier post of my own.
Andreessen argues that the model of assembling teams of specialized talent on a project-by-project basis will increasingly leave the major studios on the sidelines.
In other words, the way in which the Hollywood model has been implemented in industries such as high-tech — lots of entrepreneurial firms establishing themselves without having to operate, at least initially, at large scale — will become the way the model is implemented in Hollywood itself. The availability of affordable production tools (cameras, editing equipment, etc.); direct access to capital, such as venture finance; electronic distribution; and viral marketing means that creative talent (actors, directors, and writers) can team up and produce work without being dependent on the large studios for production funding, distribution, and marketing.
The upshot, as Andreessen puts it, is "Hollywood, rebuilt in Silicon Valley's image." Or, Hollywood, embracing a purer Hollywood model.
__________ 1 The other two parts of Andreessen's series on career planning are here (Part 1) and here (Part 3). Note Andreessen's disclaimers: "These posts are aimed at high-potential people who want to excel throughout their careers and make a significant impact on their fields and the world. These posts are not appropriate for people for whom work/life balance is a high priority or for whom lifestyle is particularly important ... My background is biased towards high-tech companies and Silicon Valley, and my advice will be most relevant to people entering either my industry or other industries that are like my industry ... Everything that follows is purely personal opinion — specifically, these are the things I would want to know if I were entering college today. I'm sure there are many equally valid counterpoints to each of my points ..."
One of the earliest HR projects I worked on was updating the new-hire orientation for a healthcare company on Long Island. Their existing program was very much in the style of marching new-hires through the bureaucratic details of learning how to use the phone, signing up for benefits, being briefed about policies and procedures, etc.
To their credit, the company was open to making the orientation process more engaging. Still, we didn't achieve as much progress in humanizing and enhancing the program as I would have liked.
Recently, ManageSmarter.com published a description of the update to new-hire orientation that Vision Service Plan (VSP) of Rancho Cordova CA undertook in mid-2006. With one caveat, this program offers a good model.
The caveat comes up as soon as I mention that VSP calls its orientation the "Onboarding Program." Without going to the opposite extreme of being too cute, I would like to think that VSP could have come up with a more distinctive name that reflected the company's culture and personality.
Leaving the naming issue aside (and the corollary problem of overuse of corporate jargon), here are some of the useful lessons the VSP example offers:
Have a nice Welcome Aboard package. VSP sends an email message with "a PowerPoint presentation about VSP's business, goals and culture." Each employee also receives a picture frame with the VSP logo.
Start the program with a warm greeting from a senior manager.
Include talks by representatives of the organization's various departments, such as sales and marketing. As Shauna Harrington, director of workforce development explains, "It is one thing to understand VSP, but it's also important for everyone to know who our competitors are, what the marketplace as a whole looks like, and what our customers value."
Work to maintain the initial enthusiasm of the new-hire. For example, enlist managers and other employees in helping new-hires feel connected to the rest of the organization and engaged in the organization's mission.
Give new-hires firsthand exposure to how employees interact with customers. In VSP's case, this means having new-hires sit with customer service reps in the call center. (Harrington points out that a further benefit is that the CSRs feel an extra bit of appreciation.)
Provide a tour of company facilities.
Use the buddy system. Match each new-hire with a more experienced employee who will take an active interest in helping the new person to learn the ropes, to find out about the local community, and to feel engaged.
Explain professional and career development opportunities.
Give managers a checklist of the steps they need to take as part of the process of bringing the new-hire onboard.
Use feedback from participants and management to continuously strengthen and update the program.
Follow up. After 90 days, new-hires at VSP "are invited to a one-on-one meeting with HR after providing input via a new-hire follow-up survey... A few months later, new employees attend required training pertaining to the company's values (Walking the Talk), diversity/inclusion education (The Inclusion Workshop), and coaching/management philosophy (Situational Leadership)."
Harrington reports that VSP's new approach to orientation seems to be helping. Not counting call center employees, there has been a 25% drop in the number of people who quit without notice, who leave VSP for "other employment," and who list "other" as their reason for departing.
As a follow-up to an earlier post concerning improvements in cocoa farming in West Africa (where 75% of the world’s cocoa is grown on small family holdings), here is a short video put together by the International Cocoa Initiative (ICI). The video introduces ICI's work to reduce exploitation of child labor.
(Though the running time is given as 6:35, the actual time is 3:08.)
ICI, based in Switzerland, is a foundation set up in 2002 as a partnership among non-governmental organizations (NGOs), labor unions, cocoa processors and the major chocolate brands. ICI's mission is
to oversee and sustain efforts to eliminate the worst forms of child labour and forced labour in the growing and processing of cocoa beans and their derivative products.
In order to accomplish its mission, ICI takes a long-term view:
By working in concert with communities, we create the building blocks necessary to ensure long-term change. Changing long-standing and deeply embedded local practices is not a quick fix. Affecting meaningful and sustainable change must, therefore, be driven by community-based solutions that harness local knowledge, capabilities and buy-in.
The ICI video gives a sense of how their pilot projects work locally
to ensure children are not involved in hazardous practices, a mechanism for the identification and rescue of trafficked children, investment in education and youth programmes and a framework to ensure these changes become permanent.
If you want additional detail, you can go to ICI's website to read a brief write-up of the pilot program in Attobrakrom — the community in Ghana featured in the video — and a summary of an evaluation of how the pilot program fared in all the communities in which it was instituted.
Don Sull a professor of management practice at London Business School, has been researching the ins and outs of operating in undertain markets for many years. This past June he published an article in the Wall Street Journal that looks specifically at the key questions an organization needs to consider in reaching a decision on whether to proceed with scaling up to take advantage of a promising initiative.
The five questions Sull identifies and discusses are:
1. What are you betting on?
Sull argues, "When entrepreneurs cannot provide a clear or compelling answer to this question, it typically signals that they haven't yet articulated a clear customer need or settled on a business plan that makes financial sense and provides an advantage over competitors." Sull's recommendation is to defer committing substantial resources to the initiative until a robust business model has emerged from smaller-scale experimentation.
2. Have you standardized what matters?
In Sull's view, the areas in which the organization needs to institute appropriate standardization are:
Processes — e.g., for manufacturing, decision-making, and setting compensation.
Frames — "mental models that focus employees' attention" on common goals. As examples, Sull offers "identification of the company's focal competitor, choice of target customers, criteria for selecting retail sites or key performance indicators."
Resources — both tangible and intangible. Standardization here promotes efficiency. Sull cites the example of Ryanair, which limits the types of plane it operates.
Relationships with external parties — e.g., customers, regulators, suppliers, and distributors. (I would have liked to learn more about Sull's thinking concerning standardizing relationships with customers, since often treating customers differently generates a good return.)
Culture — "shared norms that unite and inspire employees and shape what actions they take." Sull notes that a healthy culture "can ... induce employees to do the right thing without elaborate control systems." He points out that some companies go so far as to hire based on the compability of a person's values with the company's values, and then use training to get employees up-to-speed on the job skills they need.
3. How will you manage binding constraints?
Sull urges looking actively for where binding constraints may lie. Having identified a constraint, the organization needs to be ready to adopt an effective way of loosening it. For example, if internal resources are a bottleneck, a company can outsource some production. If some managers are ill-suited to a scaled-up operation, they can be replaced with managers who have the necessary skills for leading the transition.
4. How will you handle unanticipated difficulties?
Sull calls for hedging via such measures as starting out with a strong balance sheet (substantial cash and marketable securities), maintaining tight control over fixed costs, diversifying without detracting unduly from focus (e.g., the Brazilian jet plane producer Embraer "diversifies its market risk by producing both military and commercial aircraft that share certain design features and production processes"), and hooking up with strong, reliable partners.
5. Do you have the stomach for it?
Being able to answer Yes to this question is important because once scale-up begins, "managers must maintain momentum, secure the resources required to fund growth, and withstand the competitive retaliation their success invites." The goal is to create a virtuous cycle in which success attracts potential partners, employees, and customers, which breeds further success. Achieving this positive dynamic very likely will require some tough decisions, such as shedding some existing business in order to free up resources for the new undertaking.
The Dallas Fed has posted on YouTube four excerpts from an hourlong discussion Dallas Fed president and CEO Richard W. Fisher had with Milton Friedman on October 19, 2005 (about a year before Friedman's death).
In the excerpt shown here, Friedman argues that outsourcing to countries like India and China is advantageous for the US because it enables the US make more productive use of its resources.
You can access the entire conversation between Friedman and Fisher here.
As Business 2.0fades into the sunset, I'd like to acknowledge its contributions to my own learning by citing one of the many articles I read with great interest.
"Bosses Get a Helping Hand," by Michael Myser, appeared in the July 2007 issue. It provides an overview of the capabilities of Web-based performance and talent management software, with particular attention to the suite of applications available from SuccessFactors. Other vendors cited are Authoria, Kenexa, Saba, Taleo, and Vurv Technology.
As Myser explains,
A typical [performance and talent management] package provides a resume-like profile that workers and managers can update anytime. When a review period rolls around, employees rank themselves on skills and competencies listed by the company. ...
Managers can adjust the employees' self-ratings up or down and then, during face-to-face reviews, discuss and finalize them. Employees who need improvement can use the software to find online courses, completion of which is recorded by the system.
Meanwhile, managers and the human resources department have a consistent view of each employee's skills and performance and can spot in advance any gaps in their succession plans.
As a complement to Myser's article, you might want to have a look at a brief white paper prepared by CCHKnowledgePoint and available at the Business Forum website. Along with a narrative explanation of the advantages of software-aided performance management, the paper includes a chart summarizing how a software solution can help minimize the pitfalls typically encountered when using a paper-based system. The benefits cited for the software solution are:
Clearly stated performance goals, "line of sight" organizational perspective, and targeted job competencies.
Managers have a model for clear language and a basis for developing the narrative portion of the review. Legally sensitive and inappropriate language is identified.
Help for managers in tracking and documenting performance throughout the review period.
Consistent criteria and a systematic method of evaluating performance, i.e., help with avoiding rating biases.
Flexibility that allows organizations either to define performance criteria and standards centrally, or to authorize managers to create review practices specific to their business objectives.
Encouragement to managers to give regular feedback. Provision of online advice and coaching ideas.
All performance data are available for analysis.
A step-by-step process and just-in-time learning reduce writing time and remove the most common barriers to completion.
Less time is spent drafting and rewriting reviews, allowing more time for manager-employee interaction. Training costs are reduced and HR is freed from policing the process.
Tony O'Driscoll on Learning in Virtual Social Worlds
Tony O'Driscoll is Lead Learning Strategist with IBM's Center for Advanced Learning. A few months ago, he put together the video below as a summary of how virtual social worlds such as Second Life can be used for training.
You can read in more detail about the ideas O'Driscoll presents in his video in an article he co-authored for eLearn Magazine with Jay Cross of the Internet Time Group and Eilif Trondsen of SRI Consulting.
There are various ways you could describe what a culture of trust1 within an organization consists of. I was drawn to the list of characteristics Dianne Durkin offers in an article in the November issue of Chief Learning Officer because she begins with the quality I put at the top of my own list:
Straigntforwardness: Expectations are clear, disagreements are discussed and resolved and individual performance is discussed and agreed on.
Durkin specifies three other characteristics:
Openness: Employees feel they can exchange information and discuss their feelings and opinions, and they do not keep secrets.
Acceptance: Employees are respected for the contribution they make, differences are valued and leadership is shared.
Reliability: Employees can count on one another for support, keep commitments and strive for excellence in everything they do.
The outcome of cultivating a culture of trust is a high level of employee engagement, empowerment and loyalty.
__________ 1 In a glossary of terms relevant to ethics and law, the University of Nebraska Medical Center offers this definition: "Trust is confident reliance. We may have confidence in events, people, or circumstances, or at least in our beliefs and predictions about them, but if we do not in some way rely on them, our confidence alone does not amount to trust. Reliance is a source of risk, and risk differentiates trusting in something from merely being confident about it. When one is in full control of an outcome or otherwise immune from disappointment, trust is not necessary. It is, of course, possible to rely on other people or on circumstances simply because one lacks other options."
As explained in his blog, about a year-and-a-half ago Daniel Gilbert, a professor of psychology at Harvard, was
struck by the intractable nature of this conflict [in the Middle East] — by the seemingly endless cycles of attack and retaliation. No one knows what it takes to break this kind of recursive loop, but psychologists have learned a few things about loops and cycles that I thought might be worth sharing. So I wrote the following essay, which appeared in today’s New York Times. [link added]
The crux of the matter:
... research shows that while people think of their own actions as the consequences of what came before, they think of other people’s actions as the causes of what came later.
Gilbert points out the research results in question are an outgrowth of "two innocent facts":
First, because our senses point outward, we can observe other people’s actions but not our own. Second, because mental life is a private affair, we can observe our own thoughts but not the thoughts of others. Together, these facts suggest that our reasons for punching will always be more salient to us than the punches themselves — but that the opposite will be true of other people’s reasons and other people’s punches.
Examples aren’t hard to come by. Shiites seek revenge on Sunnis for the revenge they sought on Shiites; Irish Catholics retaliate against the Protestants who retaliated against them; and since 1948, it’s hard to think of any partisan in the Middle East who has done anything but play defense. In each of these instances, people on one side claim that they are merely responding to provocation and dismiss the other side’s identical claim as disingenuous spin. But research suggests that these claims reflect genuinely different perceptions of the same bloody conversation.
...
Research teaches us that our reasons and our pains are more palpable, more obvious and real, than are the reasons and pains of others. This leads to the escalation of mutual harm, to the illusion that others are solely responsible for it and to the belief that our actions are justifiable responses to theirs.
Just as I found the body of Gilbert's essay illuminating, I found the conclusion resonating with my own views, based on my own experience:
Until we learn to stop trusting everything our brains tell us about others — and to start trusting others themselves — there will continue to be tears and recriminations in the wayback. [The last bit is a reference to Gilbert's inevitable escalating squabbling with his brother when they were children riding in the rear of the family station wagon during a long trip.]
Without pretending that you don't need to look for evidence that people are acting in good faith, I echo Gilbert's advice to consider the possibility that what an "opponent" is telling you reflects their true view of whatever situation is in dispute and of what should be done about it.
I've always been fascinated by the question of how people learn to improvise — to produce and develop fresh performance ideas in real time. The video below, an edited interview with pianist, composer, and teacher Alan Pasqua, provides some insight.
One intriguing point Pasqua makes is that someone preparing to improvise on a song should ask himself, "What makes this song the song?" The musician can then address the follow-up: "How can I elaborate on what's unique in the song?"
Pasqua emphasizes the importance for improvisation of learning to view a piece of music in a different way from what one's accustomed to. This practice — starting by first refreshing one's perceptions of the piece to be embellished — can be a model for developing creative ideas in nonmusical situations.
P.S. Pasqua's anecdote about the piano teacher whose one and only lesson for him was to repeat that "the piano is a wind instrument" starts at 9:17 in the video.
Center for Entrepreneurship & Executive Development
The Center for Entrepreneurship and Executive Development (CEED), co-founded by the US Agency for International Development (USAID) and the Small Enterprise Assistance Fund (SEAF), a US venture capital fund focused on small and medium-sized enterprises (SMEs) in eastern and southeastern Europe, started up in Bulgaria in September 2005.
CEED has since expanded to Romania, Slovenia, Montenegro, and Macedonia and also cooperates with the Center for Entrepreneurship (CFE) in Russia. The plan is eventually to be up and running in all the countries of southeastern Europe.
CEED's goal is to help SMEs grow faster through three types of assistance:
Training of entrepreneurs and their management teams
Networking. Entrepreneurs can share ideas, and experienced entrepreneurs serve as mentors to those in the early stages of building companies. Networking events connect entrepreneurs with potential investors, potential local and international business partners, the media, and academic experts.
Disseminating know-how on accessing global markets.
The guiding aims of CEED's training are to:1
Target entrepreneurs’ specific growth needs, concentrating on local case studies
Use entrepreneurs as trainers, so participants are learning from people with firsthand business experience
Foster discussion of common issues, providing the opportunity for interaction, networking, and peer learning
Deliver content in short, practical courses that fit into busy schedules
The flagship CEED training program is Top Class, in which successful businesspeople "transfer their knowledge and experience to younger entrepreneurs with a high potential of growth and in this way help develop a new generation of successful internationally oriented entrepreneurs."
You can get an idea of the content of a Top Class program by looking at the calendar of events for the 2006-2007 program in Slovenia.
It should be noted that CEED views entrepreneurship "as a positive value which can contribute to the development of more open, flexible and creative companies" and takes as part of its mission "to promote entrepreneurial values and culture in the broader society."
It remains to be seen how readily and how well this perspective takes root. In Macedonia, the country I've looked at most closely, the government has been instituting policies to make it easier to do business in the country. This suggests alignment with the CEED philosophy. (See the World Bank's "Doing Business" findings on Macedonia, described here and summarized here.)
