How to grow innovation elephants in large organizations
Driving innovation in large organizations is like herding elephants. Big and small elephants. – How so?
Big Elephants in the Back-Office
In large organizations, departments gravitate to sub-optimize their core business. Silos form under local management to run their department more efficient – following the old mantra: do more with less.
(Read more about silos forming at Leadership vs Management? What is wrong with middle management?)
Although all business functions are affected, corporate Information Technology (IT) departments often lend themselves as best examples for a “big elephant” world: they are critical enablers in a pivotal position of every modern organization. Even though the success of practically every business function hinges on IT, also IT is not immune to this silo-forming phenomenon in large organizations.
Over time and with ‘organizational maturity’, the IT department tends to end up focusing on what they do best: large back-office projects that cannot be funded or run by any business function in isolation, since they span across disciplines or impact the entire enterprise. Just one examples for a “big elephant” project is implementing a comprehensive Enterprise Resource Planning (ERP) system across multiple locations internationally.
This is the back-office domain and comfort zone of IT with technology know-how, big budgets, long duration, high visibility, rigid governance and clear processes to follow.
Small Elephants in the Front-Office
In contrast, the front-office typically comprises Marketing, Sales and Product Development. Here, a small tweak or agile change (that requires some IT input) can go a long way and have significant impact on organizational effectiveness and business results. – These micro-innovations are “small elephants” as recent Gartner research coined them.
These little disruptions to the slower-moving big elephant world easily trigger the “corporate immune-system” that favors large elephants and suppressing small emerging ones.
Typically, most projects in large organization aim to reduce cost in some way. Only a minority of projects address new business and growth opportunities that tend to come with uncertainty and greater risk.
While big elephants are typically incremental improvement project to save cost, it’s the small elephants that are more likely to be disruptive drivers of growth and future business opportunities: the much needed life-blood of sustaining business and future prosperity.
Barriers in the Big Elephant World
IT departments tend to struggle the farther they move away from their ‘core competency’ meaning leaving the big-elephant back-office and dealing with the myriad of small needs of the customer-facing units in the small-elephant front-office.
Many reasons contribute to say “No!” to emerging small elephants:
- Small elephants are disruptive to the big elephant world, perhaps even threatening to the establishment
- It is hard for the back-office to accept that there cannot be much standardization around these small small elephant solutions by the very nature of their scope and scale
- It is cumbersome to plan and manage resources scattered across small projects that pop up left and right without significantly impacting big elephant projects. Unfortunately, pressure to save cost only fuels the focus on fewer, bigger elephants.
Gartner brings the dilemma to the point: “[..] the focus on optimization, standardization and commoditization that underlies IT’s success in the back office is contrary and even detrimental to the needs of the front office.”
- Insights in front-end processes and customer needs are essential (and not usual IT back-office competencies) to seize small elephant opportunities, which are often disruptive and driven by the agile intrapreneurial spirit that makes full use of the diversity of thought and understanding customers deeply.
– See also The Rise of the Intrapreneur
- On top of it all, the challenge for IT is to understand the potential and pay-off for initiatives that rely on IT in a domain outside of IT’s expertise: In the mature world of big elephants, ROI projections are demanded upfront and based on models that apply to mature organizations. These models typically do not apply well to measure project ROI in the emergent worlds of small elephants, which puts the small elephants at a disadvantage; another disconnect that easily leads big elephant organizations to reject proposed small elephants.
As a bottom-line, for large IT departments it is simple and convenient to say ‘No!’ to requests for “micro-innovations” coming in from employees scattered across the front-offices. And, sadly, often enough this is exactly what happens. Despite the lasting impact of “No!” (see also How Intrapreneurs avoid “No!”), turning ideas and proposals down too fast also leaves out opportunity for huge innovation potentials (see also 10x vs 10% – Are you still ready for breakthrough innovation?).
What happens to IT without small elephants?
Ignoring the need for micro-innovations and not supporting them effectively will not serve IT departments well in the long-run. With only big-elephant focus IT departments are at high risk to lose sight of the needs of their internal customers. Consequently, IT undermines and finally loses its broader usefulness, acceptance and footing in the business functions they intend to serve.
When small elephants are neglected or blocked, it practically forces the front-office to look for other resources sooner or later in order IT-services providing resources to get their needs taken care of. Over time, the big IT department drifts to become more and more obsolete, and finally replaced by agile and responsive agencies and contractors that deliver on their front-office customer needs.
After all, IT’s general role is one of an enabler for the core businesses rather than being perceived by its customers as a stop-gap.
How to raise Small Elephants
So, what can a mature yet forward looking IT organization do to support micro-innovations – or ‘balance the herd,’ so to speak, to include a healthy number of small elephants in the mix?
- Brad Kenney of Ernest&Young recommends limited but dedicated resources (including time) for micro-innovations in Ernest&Young’s 2011 report “Progressions – Building Pharma 3.0”;
for example, dedicate 10% of the expert’s time to implement micro-innovations
- Test changes in emerging markets first, if possible, where agility is high at a lower risk of jeopardizing the bottom line or threatening the established organization and its investments in mature markets
- Establish effective collaboration platforms that make it easy for employees to openly and conveniently share content among each other as well as with external parties.
How Intrapreneuring helps
A systematic approach to Intrapreneuring can go a long way to help move these micro-innovations forward. It starts with systematic intrapreneurial skill-building for employees across all levels of hierarchy and includes:
- Understanding how innovation happens in large organizations, i.e. large and small elephants and the need for both to exist
- Helping employees become aware of and overcome their own mental barriers and silo-thinking
- Attracting, inspiring and engaging employees to take their idea forward knowing there are obstacles in their way
- Training skills that help to frame, develop and pitch ideas to potential supporters and sponsors
- Building and presenting a business case for review and improvement by peers and management
- Enabling and empowering employees to bring their small elephants to life and sharing the story of their success to inspire others
- Working to gradually change the mindset of the organization, its culture, as needed, to become more balanced on the elephant scale, to unlock the resources within the own workforce and to seize opportunities for growth and the future of the business.
Just as out there in the wild, without raising small elephants the life-span of organizations with only big elephants is limited.
What makes us happy
Some years back I read a book by two researchers in search of what makes people happy. Beyond general curiosity, my motives were somewhat selfish: I wanted to find out what the secret to happiness so to apply it to myself and be happy.
Finding the “happy people”
I still remember the researchers approach. It was different from what I expected and has stuck with me since then: they did not come from a nerdy angle that started with lengthy definition for “happiness” along with complex parameters and complicated metrics as you may expect. These two researchers went out to find “happy” people by hearsay and then interview them to identify commonalities or factors leading to their happiness – and the very secret to happiness I was after.
Looking back, the researchers used the power of crowd sourcing (long before it became a household buzzword) to find those happy people. In this practical yet somewhat fuzzy approach, they asked broadly who knew people that were “happy”. Then zeroed in on those reportedly happy individuals that several others pointed to. It may not be the most “scientific” approach I ever heard but intuitively it made sense enough for me to accept it and read on.
What happy people have in common
The researchers found and interviewed, asking if these people felt truly happy and to found out what exactly made them so happy.
The responses surprised me. Most of them, as I recall, did not consider themselves “happier” than others in a particular way despite the many people around them believing otherwise. Of these presumable happy people, most appeared modest and content with their lives. Their happiness came from within and somehow ‘radiated’ out to others.
Overall, they were happy with what they had and not driven by the longing for things they did not have. It seemed they were more resilient or less tempted in what is advertised and suggest making us more beautiful, happy, smart, sophisticated, loved, needed, sexy, admired, or whatever once we buy this or that.
No problems in life?
It got even more interesting for me when the researchers got to the real ‘meat’ probing the million-dollar question: where does this inner happiness come from? Was there an event, experience, or cause? Were these people luckier in life than others, did they win the lottery? Did they not face the same obstacles that most of us encounter; did they not experience pain or feel despair as much?
The answer was a surprise, again, from what I had expected and consistent across responders. What these reportedly happy people had in common were traumatic life experiences, some of the saddest I have ever heard. They had suffered the most painful challenges a human can ever go through; heart-wrenching life stories full of grief with loss and pain on every level imaginable. They had faced certain death, lost loved ones or their health, survived war, crime, assault or terrible disasters. They had lost everyone and everything important to them, everything that they had considered the center of their life at that time.
What they also had in common was a deep gratitude for having overcome these major losses and crises. They were grateful for what they had today starting with their own life. Their happiness truly came from within. They did not crave getting the newest gadget first or show off status symbols of sorts. They were happy being with their friends and family, and going about a simple life they enjoyed every minute. They found beauty again in a flower and took the time to sniff it when others rushed by.
As a learning from these ‘happy’ people for myself, their happiness resulted from enduring a deep and meaningful suffering, overcoming a life-changing trauma and then to truly appreciate that you survived or made it through in the end to live another day.
It even reminds of Dante’s “Divine Comedy”, where to protagonist need to descend to Hell (suffering) and work its way up through Purgatory (transformation) to reach Paradise (happiness).
To this day, it serves me as a reminder to value and cherish what I have and can do, and not to become obsessed with what I do not have.
Looking into the abyss
Now we could leave it here to sit back, smile, and cozily reflecting on our lives feeling good for a little while. But why not take it further and ask the ultimate question: looking back when I die, what would I have done different, what would have made me happier?
Obviously, we do not want to wait to find an answer before it is too late. So, let’s crowd-source again and learn from other people at the end of their lives looking back. Thankfully, an Australian nurse recorded the regrets of the dying she worked with over a 12-year period. (The Guardian, Top five regrets of the dying, February 1, 2013)
Here are their top five regrets:
- I wish I’d had the courage to live a life true to myself, not the life others expected of me. – This was the most common regret of all.
- I wish I hadn’t worked so hard.
- I wish I’d had the courage to express my feelings.
- I wish I had stayed in touch with my friends.
- I wish that I had let myself be happier.
Read the list again. Take a minute and think about it. – Do any of these regrets resonate with you? What would be your greatest regret?
Now that you know what these soon-to-die people wished they had done differently in their lives, what will you do in the time you still have?
But how does this all come together? What is the change within us that in the end made the ‘happy people’ happy? I was still looking for answers, for a pattern and an explanation to this phenomenon.
Let’s take just one step back to look at the bigger picture and combine the path of hardship to happiness by the ‘happy people’ with the regrets of the dying. Is there a general formula that we can apply to ourselves to be happy?
Attempting an explanation
I don’t claim to have scientific evidence, nor did I mull through endless scientific literature, or study medicine or psychology; to me the answer I found appears quite apparent and not new either. It is known as “post-traumatic growth” in the medical world and defined as “a positive change experienced as a result of the struggle with a major life crisis or a traumatic event.”
A change takes place in individuals during post-traumatic growth that transforms mind, attitude, and behavior:
- Priorities change – they are not afraid to do what makes them happy
- Feeling close to others – they seek and value closeness with people that are important in their lives
- Knowing oneself better – they are awareness of their own needs and limitations
- Living with meaning and purpose – they enjoy each day to the fullest, carpe diem!
- Better focus on goals and dreams – actively seeking to making changes
This transformation changed the ‘happy people’ consciously or unconsciously, and it is this behavior and mindset that others see or sense, which leads them to the conclusion they are happy.
How to be happy
Now, wouldn’t it be great if you could replicate this this transformation and become happy without having to go through the hardship and suffering these happy-after-tragedy people all had to go through? – The good news is you can!
From what I learned from Jane McDonigal, a famous game designer, the favorable result of post-traumatic growth can build four specific individual changes:
- Physical resilience – to not give in to sedentary behavior, meaning to get up and active, physically move!
- Mental resilience – build up your willpower to persist in reaching for your goals
- Emotional resilience – provoke your positive emotions to offset negativity (ideally in a ratio of 3:1, no kidding!)
- Social resilience – draw strength from other people; as a practical approach, genuinely thank one person a day or touch another person for at least 6 seconds.
Everyone can benefit for this simply by choosing to do so. It gets even better: over 1,000 peer-reviewed studies confirm that applying these changes can prolong your life by up to 10 years! Amazingly, not only are the ‘happy people’ obviously happy, they also live longer!
So if you are in search for your happiness, as I was, chose to make these personal choices and start your transformation to happiness today!
VASA’s historic project management lesson
Vasa’s historic project management lesson
Building a battleship 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 at 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.
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 these 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 decide 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, 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!
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 the 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 getting the project moving! On the downside, however, this powerful sponsor can also take more influence over the project than is good for the end product, the Vasa.
Therefore, managing the scope is crucial. It includes clarifying the project scope up front 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 will increase the cost dramatically, so avoiding ‘scope creep’, i.e. uncontrolled changes late in the game, is crucial.
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 of 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 completing, the shipbuilder Hybertsson fell ill and died. His assistants, Jacobsson and Ibrandsson, would share the 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.
The 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.
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, whenever 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. A specific finishing date should not be offered at the beginning of the project without careful communication about the associated risks, so as 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 set 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.
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!
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.
Leadership vs Management? What is wrong with middle management?
Is ‘middle management’ to blame? About the differences between managers and leaders, two conflicting roles that are both needed in an organization.
What is wrong with middle management?
Listen around, ‘middle management’ gets blamed all around for many things and even more so, for the big disconnect between executives and the staff and managers in the trenches.
A colleague just asked me again today – what is wrong with middle management?
Is there a systematically flaw that affects so many organizations?
Management versus Leadership?
The confusion originates from a lack of clarity over the roles: We need to look first at what the difference is between a manager and a leader: Is there one at all and are these roles exclusive or do they overlap?
Don’t be mistaken, significant differences exist between managers and leaders; yet an organization needs both, managers and leaders. It is necessary to distinguish these roles, since their focus and goals are quite different. Not only can they conflict to some degree, they actually have to for the better of the effective organization overall. ‑ Let’s take a close look at both roles:
A manager typically supervises a unit that produces an output consistently (such as a product or service). The manager’s job is to improve the input (resources) and output (deliverables) and make tactical adjustments. Most changes are moderate and of an evolutionary character focused on optimization by refinement of the here-and-now.
Given their tasks and responsibility, managers do have a professional tendency and even obligation to resist changes that disrupt their well-oiled and optimized “machine” whose output is also their immediate measure of success in most organizations.
For an effective manager it is all about “doing-things-right”. The ways often get documented in procedures to solidify and guard the established processes to guarantee the reliable delivery of results. Focused on preservation and functional optimization, managers can also easily fall in the trap of judging too soon and then making an adaptive decision too late.
In contrast, a leader takes a step back and looks at the bigger picture that aims strategically at the organization’s future. The effective leader shakes up the established structures and “does-what-is-right” by bringing about change that will position and optimize the organization for future success through transformation. (Read more on Innovation Strategy: Do you innovate or renovate?)
Leaders must stay flexible and willing to deviate from the current path to drive the needed change to successfully shift or even turn the course of the organization. Consequently, the leader must take into account major disruptions of otherwise smooth and sub-optimized operations. (Read more on How to become the strategic innovation leader)
The farther a leader is removed (usually way up in the hierarchy) from the level where the output is produced, the more abstract the work appears. It becomes easier for leaders to make game-changing decisions flexibly that may turn out unfeasible on the factory floor or other real-life business settings or that confuse the staff.
A good leader follows guiding principles and keeps the staff in the loop to prepare them for upcoming changes. Removing elements of surprise where possible is an effective early step of successful change management when it comes to implementation.
We need both!
The goals of leaders and managers conflict and create a constant tension field. It requires active balancing and healthy negotiation to prepare the organization for the future while not sacrificing the ability to deliver results reliably as the organization moves ahead on the bumpy road of change and uncertainty. (More on Mastering the connected economy – key findings of IBM’s 2012 CEO study)
This makes clear that an organization needs both, effective managers and visionary leaders. It also makes clear though that both roles may not be best united in one person to avoid a conflict of interest that compromises best results for the organization overall.
Where middle management gets stuck
As you move farther down in a hierarchy from the leadership level and closer to operations, the harder it becomes for managers to balance the high-flying leadership vision with the demanded production or service targets on the ground.
So here is where you find the clash and overlap between leadership and management: The middle management gets caught in the middle, literally!
Middle management needs to bridge the gap even for self-preservation by negotiating and brokering between the workers and the leaders. It’s a tough job! Middle managers deserve some sympathy as they get torn by the conflicting needs of the organization every day and often enough not fully included by leaders while yet having to make sense of the dilemma and translating it for their staff.
Can’t do without…
Thus, there is no ‘systematical flaw’ but only the reality of conflicting needs of an organization that requires both, effective managers and visionary leaders. This comes with accepting the entailing tensions and conflicts to deliver results reliably and consistently while readying the organization for meeting the challenges of the future – which puts the middle management in the hottest spot!
Fear of change?
Do people fear change? I doubt it. See how fear relates to ‘change’ and how to harness it.
Fear of change?
An interesting discussion I got involved in recently is about ‘What gets in the way of embracing change?’
It quickly revolved passionately around whether employees like change or not.
People love change!
From my experience, people love change! – Not convinced? Look around you: People love fashion, wearing different clothes and hair styles, driving a new car, using gadgets with cool new features (look at the success of iPhone, iPad, etc.!) and so on. These are all changes we embrace all the time!
Obviously, ‘change’ as such is not the issue; so what is?
Angst or fear?
‘Angst’ describes “an acute but unspecific feeling of anxiety”. There is no specific source, however, so angst is based on the abstract, the unknown.
In contrast, ‘fear’ is anxiety about a “possible or probable situation or event”. Strangely, fear of change hints at something specific and not at some unspecific angst the general term ‘change’ leads up to. Nobody seems to use the term angst relating to change. – So what is the mix-up about?
When it comes to fashion or hair styles the fear is not about the new color or cut but about how others will respond to it and how this will affect me.
Will the person I fancy secretly finally notice me and be attracted to me? Will I appear more daring, more professional or more ‘me’ branded – or what ever else it is you wish to symbolize or achieve through the change that you initiate.
People fear uncertainty of the consequences!
What people fear are the consequences for them that the ‘change’ entails and even more so if they have no control over the change. Translated into the workplace this comes down to what changes for the individual employee: First of all, their gotten-used-to equilibrium gets disturbed by an outside force – not by free choice of the individual. This type of change typically induces much uncertainty for an individual with little or no control over how it will play out for them. Instead, the well-established and familiar routine stops. It is replaced by something different, possibly something they don’t know or understand fully.
Now, where the fear comes from specifically for the employee is that one day the employee is competent in doing their work and delivering results, while the next day (i.e. when the ‘change’ takes effect) they may need to learn, adapt, give up comfortable routines, figure things out the hard way, may not know how, fail and struggle ‑ and be inhibited during this period to produce results again so this comes with a lack of satisfaction and appreciation or other forms of acknowledgment.
Other colleagues may adapt better, learn faster and surpass them in the ability to the work done in the new way. Then, the employee may find they got left behind and may no longer be needed by the new organization. This potential lack of professional competency is the origin of the fear possibly combined with loss of certain perks or proprietary knowledge acquired over time that helped them staying afloat and ahead of others in the good old days.
Ask yourself if you would like to be surprised today with a major reorganization, for example, that let’s you hanging in the limbo with uncertainty about your fate within the company for months or by a new process thought out in some remote ivory-tower that is unlikely to work in the reality of your workplace…
This is where the major opposing force to effective change comes from: the employee resistance. If resistance is high also the chances are high that the change will not be implemented effectively, not efficiently or not even at all.
Change as an equation
Change can be expressed in an equation called Gleicher’s Formula (after David Gleicher and Richard Beckhard, 1969). Several variations of the equation exist but they all include the same three factors, which multiplied need to exceed the amount of resistance (=cost) on the other side of the equation for the change to be implemented successfully.
According to the streamlined formula (by Kathleen Dannemiller, 1992), change (C) is the product of
- The dissatisfaction with the status quo (A),
- The desired state (B) and
- The practical steps taken towards the desired state (D).
These factors multiplied must outweigh the amount of resistance represented here by the cost of change (X). Here is the formula: C = (ABD) > X
In practice, there must be significant pressure present from dissatisfaction with the current state (status quo), a clear description of what the new state should look like in the future (vision) and effective measures taken to get from the current to the desired state (action plan).
Overcoming resistance in the change equation
Resistance may include different elements but a major contributor is the resistance originating from the people affected by the change. It is crucial for reaching sustainable results to keep this friction low by engaging these vital stakeholders actively and early on where possible.
What it comes down to in practice is having a sound plan and excellent execution of change management together with the people affected by the change. Include them to work issues out as they arise early on when alterations cost little and to buy in to the change and drive it. Don’t underestimate the impact and potential of employee empowerment and the pay-off that it can have for the organization that does it right!
Including and empowering employees effectively in organizational and procedural change projects becomes a powerful differentiator between an effective change implementation and a costly disaster.
‘Complexity’ is the 2015 challenge! – Are leaders prepared for ‘glocal’?
In IBM’s 2010 CEO study, the high-profile interviews revealed a game-changer for the next 5 years: mastering the increasing ‘complexity’. Yet, less than half of all CEOs feel prepared for the challenge! – Read what is meant by ‘complexity’ and what the CEOs look for in successful future leaders!
‘Complexity’ is the 2015 challenge! – Are leaders ready for ‘glocal’?
What is the key challenge in the coming years and how to prepare future leaders.
IBM released its high-profile annual CEO study with interview results from 1,541 CEOs worldwide. The focus is on ‘complexity’ as newly identified challenge that CEOs face increasingly over the coming years.
(Note: the study results are no secret and available in the public domain: http://www-935.ibm.com/services/us/ceo/ceostudy2010/index.html)
Complexity is what develops when a company tries to make their product and services easier to use for their customers and clients. – Why? Look at what we customers expect of the products that we buy these days:
Example – let’s take cars: New cars these days are highly integrated products that go far beyond only ‘taking you from A to B’. As added features we find WiFi and DVD players installed for entertainment. The radio receives traffic reports feed into the car’s navigation system to guide you around heavy traffic. There are distance sensors that automatically sound alarms and engage the brakes should we get too close to an obstacle too fast. Collision detection systems adjust your seat belt and deploy airbags to keep you safe and then call help through the car’s mobile phone system automatically while directing emergency rescuers to the car’s crash scene.
Integration entails inter-dependencies
These technological marvels in a car are integrated to run smoothly ‘behind the scenes’. They also pose significant challenges for the manufacturer that needs to keep the features as easy to use as possible for the customer or run even completely invisible to the customer. Nonetheless, all these components must work together seamlessly in an integrated way that create complex inter-dependencies among them.
This requires the manufacturer to integrate services and products outside their typical ‘automotive’ spectrum and ability. They need to collaborate with other suppliers that may not even have established ties to the car industry.
Note that the traditional product ‘car’ has undergone change to become an integrated ‘mobility and lifestyle’ product.
This increasing technological complexity at an increasing speed translates into the manufacturer’s organization and challenges its leadership.
Is there a ‘magic bullet’?
“The vast majority of CEOs anticipate even greater complexity in the future, and more than half doubt their ability to manage it.” – This fundamental statement strikes me most IBM’s 2010 CEO Study though it does not hold true though for a minority of outstanding organizations, which found ways to deal with complexity and produce 20% profits over their competitors nonetheless!
The ‘magic bullet’ facing unpredictable uncertainties seems a mix of
- Creativity (it’s the highest ranked leadership quality by all CEOs!) that allow to react fast to a changing environment
- Integrating customers into their processes
- Simplifying what organizations do and produce.
Perspective of CEOs in Life-Sciences
Now, how does this translate into our daily work? Most of my professional life I spent in different areas of the Life-Sciences industry in Germany and the USA that I chose as an example. What caught my eye here are the responses by CEOs from Life-Science organizations in Germany and the USA in comparison. – How do they rate the upcoming complexity challenges, how prepared do they feel and what do they look for in future leaders over the next few years?
The 3 Needs
US CEOs (86%) more than German CEOs (81%) expect higher complexity in the years to come but only 45% (in both countries) feel that they are prepared to cope with this new challenge successfully. This opens a larger-than-ever ‘complexity gap’ reflecting the uncertainty on how to operate in the volatile and murky waters of the new business environment.
Interestingly, the German CEOs rely confidently on creative leadership making decisions quickly (over thorough decisions) in the future by 18% above all CEOs sampled. The US CEOs, in contrast, seem more pessimistic by relying on quick decisions slightly less that CEOs overall. Both, the German and US CEOs equally make integrating customers to better understand the customers’ needs their highest priority
The CEOs take different approaches to how and how much to simplify: While the Germans seem more radically simplifying products and operations more than CEOs overall, the US CEOs focus on reducing fixed costs willing to increase variable costs to allow for up-scaling ability as need arises.
3. Focus in Emerging Markets
The study including all CEOs proves that 76% aim at the rapidly developing markets. It is not surprising that market factors is their #1 external focus followed by technological and macro-economic factors.
Key Attributes of Future Leaders
What kind of leadership we need to manage complexity successfully over the next 5 years?
The CEOs agree on the following three attributes:
- Creativity (60%) ranks highest overall followed by
- Integrity (52%) and
- Global thinking (35%).
What CEOs are looking for are leaders that understand and collaborate closely with the customers, show strong people skills and have a deep business insight with intelligence data.
The future leaders are innovators able to think on their feet and open to experiments when speed needs to rule over correctness. The capacity to simplify for the customer is crucial. This entails reducing the resulting complexity by stripping what matters down to the core and focus on that. Sound planning may have to give way to situational yet strategic management to avoid information paralysis and gain competitive advantage. – The coined term ‘glocal’ means to integrate globally using all resources available worldwide while doing locally only what is necessary.
What do you think – are we ready for the complexity challenge? Any suggestions how to prepare?
How to approach ‘metrics’?
There is confusion around why, what and how to measure. Resistance to measuring also seem to originate from a too narrow interpretation of the term ‘measuring’, a fuzzy approach and a lack of creativity on how to measure what. Douglas W. Hubbard offers guidance by asking powerful questions.
How to approach ‘metrics’?
There is much truth in the saying that comes in many variations: “What gets measured gets managed”, “Everything that can be measured can also be managed” or even “What isn’t measured can’t be managed”. ‑ If you don’t measure progress or success, how would you know you reached the goal?
Now, there is much confusion around why, what and how to measure as well as resistance to measuring that seem to originate from a
- too narrow interpretation of the term ‘measuring’
- fuzzy approach
- lack of creativity on how to measure what.
Some people associate ‘measuring’ with lab coats, values with many digits behind the decimal point or requiring complicated formulas and ways to produce valid results. This –typically- does not reflect reality nor is complexity always necessary.
There also seems misconception that measuring has to eliminate any error and that there simply is no metrics possible for less tangible problems like ‘employee engagement’, ‘employee satisfaction’ or ‘strategic alignment’ just to name a few.
It becomes much easier if you understand measuring as a means to reduce uncertainty. When stakes to fail are high in an environment with much uncertainty, then reducing uncertainty is worthwhile, as it reduces risk and provides a quantifiable value. Even a very simple metrics can often help to answer the critical question.
When it comes to how to a systematic approach to measuring, here are some guiding questions that I found in a book of Douglas W. Hubbard; find specific answers before you measure:
- What is the decision this is supposed to support?
- What really is the thing being measured?
- Why does this thing matter to the decision being asked?
- What do you know about it?
- What is the value to measure it further?
(Source: “How to Measure Anything – finding the value of intangibles in business” (p.43) by Douglas W. Hubbard; www.howtomeasureanything.com)
If you take a sharp look around, you may find that many things are being measured without adding any benefit. For example: no decisions being made based on a measurement, such as a periodic report or detailed survey results.
Other things aren’t measured but should. For example: what business value does an ERG add to a company?