Intrapreneurship: Designing sustainable innovation ecosystems! – New Executive Webinar Series in Oct/Nov 2017

Intrapreneurship: Designing sustainable innovation ecosystems! – New Executive Webinar Series in Oct/Nov 2017

Register now for my new Intrapreneurship series of Executive Webinars starting in October 2017 and powered by Ijona Skills:

  1. The Power of Intrapreneurship – an Introduction
    Online only (recording available) – October 15, 2017
  2. “Where to start?” – Designing a sustainable innovation ecosystem in a large company for exponential returns
    Live online (recording available) – October 31, 2017
  3. “Against all Odds” – Implementing a sustainable innovation ecosystem in a large company
    Online only (recording available) – November 15, 2017

The three webinars build upon each other and provided maximum value when attended in this sequence (they are being recorded, so no you can catch up if you missed one)

VASA’s historic project management lesson

Vasa’s historic project management lesson
Building a ship is a huge project today as it was hundreds of years ago.  Yet, as project managers, do we learn from the past or stumble into the same pitfalls over again? ‑ Learning from the ‘Vasa’ project disaster, the grandest battleship of its time sank just minutes into her maiden voyage!

Sweden’s Great Power period

In the 17th century, Sweden was on the top of its game.  It emerged as a leading power in Europe during the so-called ‘Great Power period’ (1561–1721) characterized by a constant state of war with its neighbors in the Baltic Sea.

King Gustav Adolphus of Sweden
King Gustav Adolphus of Sweden

When King Gustavus Adolphus (1611-1632) inherited the Swedish throne, he was out to change naval warfare entirely earning him the later title “father of modern warfare” for revolutionizing naval tactics.

In those days, boarding was common practice, i.e. pulling side by side to an enemy ship, enter it, and fight man-to-man to take over the ship.  The King found this tactics outdated.  It was time for a new era of large battleships, which demand the enemy’s respect, serving as firing platforms for mighty cannons to fight from a distance, and project Sweden’s power even beyond the Baltic Sea.  The firepower of its guns would now decides the outcome of the battle at sea and bring victory.  Thus, the ambitious Gustavus Adolphus needed a new class of heavy ‘ships-of-the-line’ to exchange devastating salvos from afar.

Setting sails to a new era!

After severe setbacks in the war with Poland, Sweden’s naval superiority in the Baltic Sea was in jeopardy.  In 1625, the King commissioned the Royal War Ship ‘Vasa’ as the first and grandest of four ships of the new era.  The Vasa was planned with an overall length of 69m (226ft), 1,210 tons displacement, 10 sails, a total of dozens of cannons and the capacity to hold 450 men (150 sailors and 300 soldiers).  It was a bold statement:  the Vasa was the most powerful battleship of its time, no expenses spared!

Vasa model
Vasa model

Spoiler alert, the unthinkable happened:  Three years later, on 10 August 1628, the Vasa sank just minutes and a mile into her maiden voyage with over 100 men aboard; over 50 sailors perished.

Putting on the Project Manager’s hat

From a project management perspective, building the Vasa was the most expensive project ever undertaken by Sweden and it was a total loss.  – What had gone wrong?

Humankind throughout history has undertaken large and innovative construction projects many times and with success.  It is safe to assume that the people in charge applied the best project management practices known at the time to increase the likelihood of project success, i.e. delivering a product to the sponsor’s satisfaction.

Naturally, it is easy for us standing on the ‘hill of the presence’ and look back down into the ‘valley of the past’.  Today we have access to sophisticated and detailed procedures for project management, which are generic and serve as a guide to run projects of any nature and size successfully.  For example, the Project Management Institute’s Body of Knowledge,  PMI’s PMBOK is such a general and proven framework that everyone can learn and follow.

Starting a project

In my experience, it is important for a project manager to have strong sponsorship commitment and ability to control the project scope.

The king himself was principal stakeholder and sole sponsor of the projects to construct the Vasa and the other three ships to follow with all power and wealth concentrated in the sovereign’s hands.  What a great prerequisite to get the project moving!  On the downside, however, this powerful sponsor can also take more influence on the project than is good for the end product, the Vasa.

Therefore, managing the scope is crucial.  It includes clarifying the project scope upfront and controlling possible changes to the scope throughout the project.  Controlling scope does not mean that no changes are possible after the project starts – this would be unrealistic.  It means that foreseeable risks and impact on resources, time, quality and other factors need to be evaluated and made transparent to the stakeholders for their approval.  It means avoiding ‘small’ changes finding their way into the scope without evaluating risks and adjusting for impact. This communication is a major aspect of the project manager’s job.

As a rule, changes late in the project increase cost dramatically, so avoiding ‘scope creep’, i.e. uncontrolled changes late in the game, is a crucial.

Stakeholder influence and Cost relation
Stakeholder influence and Cost relation

Scaling up

In January 1625, King Gustavus Adolphus commissioned four new ships over the next years in two sizes, the longest keel length measuring 41m (135ft) and shorter one still an impressive 33m (108ft) keel.  He entrusted Admiral Fleming to oversee this program, as the King himself chose to tend personally to the ongoing wars abroad instead.  Hybertsson, a competent and experienced shipbuilder was put in charge to manage the Vasa project as the first ship to be built.

The wood for Vasa had already been cut to size when a devastating storm destroyed 10 Swedish ships.  Facing his losses and struggling to fill the gap, the King changed his order:  He now wanted the smaller ships first to replenish his fleet faster.

This way the Vasa started out to as a smaller ship with a 33m/108ft keel in 1625 but -as we will see- became as a scaled-up vessel again with a long 41m/135ft keel over the course of the project.  This was just the first of the King’s frequent and profound design changes during the construction phase and after the keel for the Vasa had been laid.  Like the foundation for a house, the keel is a most critical part for a ship’s design; it sets and limits many following structural and other technical characteristics.

Building up to the tipping point

Time pressure from the King and a constant stream of significant alterations continued.  Hybertsson did not seem to find time to get the plans for the ship adjusted and re-drawn every time anymore.  With the ship’s dimension increasing again over time and adding innovative specifications, Hybertsson left his known terrain and ventured into the unknown of ship-building.  Faltering under time pressure, the layout for a smaller ship was simply scaled up to become a larger frame to house the newly specifications. Changes hardly found their way into documentation anymore.

The changes affected not only the length but also the width of the ship.  It had to be widened to accommodate more superstructure, another innovation that shifted the ship’s critical center of gravity higher making it less stable at sea.  Given the original shorter keel layout, there was simply not enough space to add ballast to give the ship the stability it needed to counterbalance its increasingly heavy top.

Bringing in heavy artillery

The situation got worse.  Sweden struggled to win the upper hand in the ongoing war when news arrived that rivaling Denmark planned a large battleship too.  The King swiftly ordered adding a second gun deck to triple the armament from initially 24 to now 64 heavy guns plus some smaller guns!  The center of gravity rose even higher with the second gun deck, the widened hull, and the added weight of the heavy cannons.
Only 48 of these guns were on board during the maiden voyage ‑ because the gun manufacturer was running behind schedule as were the shipbuilders.

Next, the King ordered hundreds of artisan outfitting sculpted in heavy oak wood and painted lavishly to impress with splendor.  It made making the Vasa not only the most impressive and expensive ship of its time but also added more to its instability at sea.

In summary, frequent change orders were issued under time pressure.  Changes remained undocumented and without deeper consideration of their consequences.  The project schedule and milestones slipped, while the Vasa became larger and heavier than her layout could safely support.

From bad to worse

By now, the project was in serious peril.  ‑ But wait, it gets even worse!

One year before completion the shipbuilder Hybertsson fell ill and died.  His assistants, Jacobsson and Ibrandsson, would share responsibility to continue but only after a period of confusion on who was in charge and direction the workforce of now 400 men.  The project management was already poor but suffered even more in the vacuum of accountability and the continued absence of reliable plans and documentation.

Stability is critical for the seaworthiness of every ship.  Unfortunately, knowledge and underpinning for reliable calculations for stiffness and stability were not yet developed.  The only way to find out if a ship would heel over and sink or not was to try it out in as so-called ‘lurch’ test:  30 men ran from one side of the ship to the other back and forth to make it rock.  It took only three runs for the Vasa to rock so violently that the ship risked tipping over – the test was discontinued.

Now, due diligence was obviously applied as good as possible by conducting the stability test as an experiment with observable outcomes.  – Having a previous post in mind, “How to apply metrics?”  this experimentation deserves a heartfelt “Bravo!”

The circumstances of the test, however, also tell the story of lacking communication and coordination within the project team and with stakeholders: While Admiral Fleming and Hannson, the future Captain of the Vasa, were present during the test, while the shipbuilders, Jacobsson and Ibrandsson, were not present.  They were not even informed about the outcome!  It raises the question if the builders even knew the test was conducted in the first place.  Yet, the Admiral insisted the ballast was too heavy, as it pulled down the hull with the gun-ports coming dangerously close to the water line.
Modern calculations confirmed that the ballast was only half of what was needed to stabilize the ship, but proper ballast would also have drawn the lower gun-ports under water.

The impatient King did not come in person to inspect the Vasa project progress (or its issues) but simply demanded challenging results from afar:  He set the deadline for the Vasa launch to late July 1628 and threatened subjects who would not comply with his royal demand ever increasing the pressure.

Bitter end of a prestige project

The day of the maiden voyage came in mid-August 1628, several weeks after the King’s final deadline had run out.  The outcomes were horrifying for the King’s prestige project:  Just a mile or so into her voyage a light gust of wind caught the sails.  The Vasa heeled over on its side and water poured in through the gun-ports.  The mighty ship sank on the spot in Stockholm’s harbor ‑ a total and tragic loss of ship and lives.

Vasa capsizing
Vasa capsizing

From a project manager’s perspective, just about every error imaginable was made over the course of this doomed project:  ‘Scope creep’ from frequent change requests, no process to address the consequences of the changes, a distant yet overpowering sponsor, intense time pressure on the project schedule, poor communication all around, a lack of documentation, unclear responsibilities, ignorance of risk and impact of unfamiliar innovations, disregarding (or covering up?) results from the failing stability test, and so forth.  The absence of project documentation leaves many details in the dark to date.

Following our human nature, when ever a project fails the search for a scapegoat begins: Captain Hannson was jailed immediately.  However, the following investigation concluded that nobody was to blame!  No reasons were specified for the sinking of Vasa.  Perhaps even more interesting, the question was never raised during the investigation why Vasa became top-heavy.  It reflects a negligence to learn from past failures for future success, so the fate of ships and crews were left to trial-and-error.

Scope, change and communication

Coming back to the earlier discussion on what is most important to control as a project manager, major issues in the Vasa project arose specifically from:

  • Stakeholder (dis)engagement – The stakeholder’s perception from afar is prone to dis-align with the situation the project manager faces on the ground.  This gets amplified easily by poor communication between sponsor/stakeholders and the project manager, whose primary task is actually communication over anything else – quite contrary to common belief.
    The King gave orders from afar without visiting the construction to connect with key players and make more informed decisions; apparently, also his communication with the Admiral, the King’s representative ‘on the ground’, was not effective either.
    Admittedly, in those days consequences for failure could be severe and go far beyond what we can imagine today in a corporate environment.  The pressure felt by the Vasa‘s project manager and reluctance to speak up may be hard to fathom today.
  • ‘Scope creep’ – The project plan for Vasa was established with a schedule and a projected timeline by when the product would be available; in this case, when the Vasa would swim and be ready for battle.  Typically, early estimates found on or favor best-case scenarios.  They are outdated only a few weeks into a project of the Vasa size.  They need to get updated periodically taking account of changes requested and unforeseen obstacles encountered.  An specific finishing date should not be offered at the beginning of the project without careful communication about the associated risks, so not to nurture unrealistic expectations by sponsor and stakeholders.   It needs to be closely managed, adjusted and communicated transparently by the project manager.
    The King demanded significant changes throughout the project’s duration that translated into time and money lost.  Bear in mind that the King does not know every task that goes into each change and the risks it induces.  It demonstrates even more the importance of a controlled change management process that reflects the impact of each change transparent and realistically.  This gives the sponsor or stakeholders a chance to reconsider whether the change should then be approved or not.  As an iron rule, you cannot have it all:  cheap, fast and with high-quality, so it is important to choose accordingly.
  • Unrealistic expectations – The common belief prevailed for several hundred years that a bigger ship, tall and impressive, carrying more guns, etc. would also be ‘more indestructible’.  – Too much ambition and the deceiving belief of ‘too big to fail’ sank also another world’s largest ship marking a superlative disaster in 1912: the Titanic.
    Nowadays, a project management office (PMO) can help to define project management standards and processes to achieve consistency across projects, which also helps to educate the sponsor on risks and help them setting expectations realistically.

After the Vasa disaster

Today, scientific methods as well as refined and formalized project management methodologies exist, such as the PMI’s PMBOK, which prepare project managers to deliver the project results reliably and with satisfying scope, time, and quality.  However, there is no silver bullet for project success since we are all humans prone to make mistakes often based on assumptions, beliefs, and unhealthy ambition.  Even the best method is only as good as the degree to which it is applied and enforced!

In the end, large and heavy double-deck gunships were built and launched successfully.  They ruled the seas for a long time, among them the USS Constitution.  This ship was launched in 1797 with firepower comparable to the Vasa but nearly twice the displacement of 2,200 tons.  This well-measured ballast made the ship safe, seaworthy and successful.  With reconstruction completed in 1995, the USS Constitution is on display in Boston today as the world’s oldest commissioned naval vessel still afloat.

USS_Constitution
USS_Constitution

The Vasa today

The Vasa lay in the shallow waters of Stockholm harbor for centuries.  Early attempts to salvage it remained fruitless.  The wreck was located in 1956 and finally raised in 1961, a full 333 years after Vasa sank.

Usually, organisms such as worms eat away the wood of ships over time but not so the Vasa.  It remained in the same condition it sank due to the inhospitable waters off Stockholm.  The adverse environment preserved the Vasa so well that it was even able to float with its gun-ports sealed and after water and mud were pumped out of the hull!

Vasa salvaged
Vasa salvaged

The Vasa is on now display in Stockholm and housed in a dedicated museum specially built for it.  Around 30 million people visited the Vasa as one of Sweden’s most popular tourist attractions – a late glory for the grandest battleship that never saw a battle.

Build ERGs as an innovative business resource!

The proposed business model for ERGs forms a foundation for continued innovation, strategic alignment and measurable results. It turns an ERG into a true and sustainable business resource for its members as well as the hosting organization.

Summary – The increasing diversity of employees at the workplace led to employees gathering along affinity dimensions like birds-of-a-feather to form networking groups within organizations. The next step goes beyond affinity and establishes employee resource groups (ERGs) strategically as business resource and powerful driver for measurable business impact and strategic innovation bottom-up.

Limited to social?

Employee resource groups (ERGs) emerge for various reasons. They tend to start with a social underpinning that naturally unites and organizes like-minded employees. ERGs come in different flavors mostly along the traditional lines of diversity characteristics such as ethnicity, skin-color, age, gender, physical (dis)ability, sexual orientation, military veterans, etc.

For ERGs, a ‘social stickiness’ is important and can be the key integrating factor of employee populations within organizations. It may also influence the choices of ERG goals and activities to a large extent. This may result, however, in possibly limiting the ERG and its members to be seen as a ‘social club’ of sorts by others. Management, in particular, may not see the direct (or even indirect) positive business impact that an ERG can have.

This is where ERGs can fall short: when they fail to tie a strong business-focused bond that ensures continued support by leadership that in return ensures the ERG can sustain and proper for the better of its members as well as the hosting organization.

Becoming a business resource

From a management perspective, ERGs can provide social ties within the workforce that are mostly seen favorable ‑ at least as long as it does not affect the employee performance; whether perceived or real.

Better off is the ERG that demonstrates an unambiguous contribution to the bottom line. A clear business value proposition sets a solid foundation that makes it easy to communicate with and convince executives securing their continued support. The company benefits from positive business outcomes as a direct result from the ERG activities, while it engages employees broader and deeper. This uses more of the employees’ true potential to ‘maximize the human capital’ as an important element also of employee engagement, development and retention.

This approach serves not only the company but has advantages also for its employees and the ERG in return. The ERG members benefit directly in many ways such as by interesting work outside the immediate scope of their job, by developing new skills and by increasing their visibility within the organization and continued ‘employability’, i.e. their personal market value as an employee.

So what is the key to success, how do you ‘build’ an innovation-driven and business-focused ERG?

A ‘business model’ for ERGs

My proposal is to establish the ERG as a self-propelling and sustainable system, an ongoing process that continues functioning quite independently from changes in the ERG leadership and consistently delivers innovations. Individual leaders are important for operations and make valuable contributions, but the ERG must be able to continue functioning even if key players become unavailable and replaced.

The following dimensions are generic and apply to any organization. Here, we use them to describe a general business model for the ERG:

1.       Strategy

2.       People

3.       Processes

4.       Organization

5.       Metrics/Rewards.

Dimensions of a business model
The five dimensions of an ERG business model

To illustrate the model and making it more tangible I use a generic example. It is based on NxGen (for: Next Generation at the Workplace), a generational-oriented and business-focused ERG that I founded. NxGen was recognized in early 2010 as a best-practices approach by the National Affinity Leadership Congress (NALC).

1. Strategy

The strategy brings to the point the ERG’s goal and objectives. A well thought-out value proposition is the foundation for the ERG.

For example, NxGen is a forum to develop leadership skills, networking and problem-solving that aims to open up cross-functional/cross-disciplinary opportunities for its active members through strategic business projects with measurable results. As a goal, NxGen aims to become a sounding board for management as a valued business resource.

2. People practices

People, active volunteers, are the life-blood of every ERG. Staffing and selection are crucial and continued activities to induce fresh ideas and prevent burn-out of established ERG members. What you are looking for are active volunteers who are passionate and energetic. You want members who become active change agents, role models, within the organization. Value a diverse set of backgrounds and capabilities that can complement another.

Rather than trying to recruit new members, focus on how to attract new members to engage and actively participate (in contrast to the ones signing up to receive email updates or a periodic newsletter, which is a passive form of membership). NxGen membership is open to all employees.

There is a broad range of benefits for active ERG members that can include (but are definitely not limited to):

  • Insight and work in other business functions and departments
  • Members lead a relevant project possibly in another business function
  • Experiment and learn in a safe and nurturing environment
  • Develop and apply skills like leadership, consulting, problem solving
  • Build an open and supportive network with members coaching each other
  • Increased visibility within the organization
  • Potential to open new career opportunities
  • Making a measurable change in the organization here and now.

At NxGen, we see that younger employees (primarily Generation Y also called Millennial, born after 1980) tend to drive the ERG activities most. The explanations I offer is that GenY’ers, in particular, enter the workplace as well-educated professionals, optimistic and motivated to make a difference. GenY was brought up to believe they can achieve anything and are interested to explore lateral career moves. They are used to collaborating in teams to overcome obstacles and network while leveraging technology effectively to this end. At the workplace, GenY typically is not (yet) part of the decision-making bodies due to their junior positions ‑ but they do want to be heard (and should be listed to given their increasing numbers in the demographic shift of the population that has reached the workforce).

3. Processes

The ERG acts through business-relevant projects. At NxGen, the member ‘grass-roots’ identify otherwise un-addressed or under-served business needs that the ERG chooses to pursue. Based on a clear value proposition (return-on-investment, ROI) for the organization the ERG seeks executive sponsorship for each project. The executive sponsor ensures strategic alignment with the organization’s goal, expertise in the functional area, political support and funding for the project (since the ERG has no funds of its own).

The project scope often lays outside of the immediate job description of the ERG-appointed project leader allowing for broader hands-on learning opportunities. Applying professional project management methods to all projects ensures the projects deliver the specified deliverables.

The ERG core team steers and administrates the ERG project portfolio which is documented in an annual business plan and shared publicly. As resources are limited, not all imaginable projects can be conducted at once but are staged. Projects can build upon and leverage each other while making use of synergies when ever possible.

In the beginning it might be challenging to find meaningful projects that make best use of the ERG’s resources and capabilities with favorable business impact. It takes time and persistence to develop a trustful relationship with executive management and to gain credibility as an ERG to attracts more complex and important projects from management in return.
NxGen works and communicates openly, it acts transparently and leverages (social) media to inform and connect with its members and non-members displaying operations and result of the ERG’s work.

4. Organization

The NxGen ERG operates within a general framework set by a company’s office to ensure all ERGs abide the company policies. This office also provides an organizational home for ERGs within the company. It generally coordinates and supports the different activities across ERGs and ensures each ERG has a distinguished executive sponsor to connect the ERG with senior management.

A charter defines basic roles and processes of the NxGen ERG in more detail and is posted publicly. A core team of active members guides the ERG activities and ensures ERG operability. The core team is lead by the ERG’s elected chair and co-chair(s); it further comprises the project leaders, distinguished role-holders and liaisons to key functions in the organization. The core team members support and advise each other. The ERG provides a safe and social environment that relies on trust among the members to connect, to build relationships, to network and to run projects.

NxGen actively reaches out to other ERGs, innovative groups within the organization but also other operating units and companies to cooperate, share, benchmark and collaborate on common goals.

5. Metrics and rewards system

How do you measure success, i.e. the effectiveness of an ERG? An annual business plan covers the portfolio of ERG projects. It serves as an instrument to measure the ERG performance across all ERG activities that the ERG chair is held accountable for.

What are the rewards for active ERG members? Besides the benefits listed in section ‘People’ above, accountability and success for individual members derive from their projects or their input to other ERG activities that all have clear objectives and a success metrics attached. Driving the change and making a difference is a reward in itself.

NxGen and individual members received several awards and recognition for their work inside and outside the company which the ERG celebrates in public. Some members list their ERG involvement and experience proudly on their résumé which is an indicator that the ERG’s value proposition is effective for its members, i.e. the members value the ERG membership, projects, recognition and awards as means of their ‘employability’.

Building the ERG as an innovation incubator

The business model positions the ERG clearly as a powerful business resource for the organization but it can be even more. The ERG can serve as an ‘innovation incubator’ by combining an attractive system with creative space in an effective governance framework. The processes create measurable value for the individual and the organization that can significantly contribute to process innovation and also drive product innovation.

In an empowering bottom-up movement the ERG directly connects its active members from any level of hierarchy with the decision-makers high up. This bears the potential to cut right through established or perceived boundaries such as hierarchy, bureaucracy and red-tape or functional silos that may severely limit the effectiveness and innovative effectiveness of other units that were created top-down within the organization.

Herein lays the deeper potential of ERGs as a true business resource and going beyond possible self-inflicted limitation to social affinity. ERGs can well be the means that contribute to driving future success of an organization for an organization that understands and value how ERGs open opportunities to tap into its workforce and unleash hidden potential.

Additional reading