Reflections on how and why…we work and live.
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Why read business books?

August 28th, 2014 | Posted by admin in Book reviews | Management - (0 Comments)
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“Life is not so much about beginnings and endings as it is about muddling through the middle.” – a forgivable, I hope, paraphrase of Anna Quindlen.

This is my last book review for Manufacturers Alliance. It’s been fun. In particular, I’d like to thank Vickie Parks for her support, her insights, and her additions to my fiction reading list.

As I sit here on the porch enjoying one of those perfect Minnesota summer mornings my first thought is to use this last missive to write about my favorite books–or maybe the books that have influenced me the most. In the end (or perhaps the muddling middle) I realize that I’m probably misconstruing how that sort of influence really comes about. Even if I had the inclination I couldn’t sort it all out – and why should I?

So I’ll take the self-indulgent route and just ramble on a bit.

Maybe the first question is why read business books at all? Given the choice between Mike Rother (whose business writing is pretty good) and Carl Hiaasen (whose non-business writing is hilarious) I would pretty much always choose the fiction. Even good non-fiction (harder to find) is more fun than business books.

For me there are two answers: First, I’m just curious about how organizations work (or don’t work) and second, I keep hoping against hope that we’ll all be able to find meaningful work in humane settings with people we enjoy. Work so good that we have trouble imagining what it would feel like. It is, in fact, that very particular lack of imagination that most distracts me when I think about business and leadership today.

There are, of course, outliers. My recent review of Rich Sheridan’s book, “Joy, Inc.” describes a case in point. But even Sheridan felt compelled to subtitle his book “The business value of joy.” Why does joy need to have “business value” in order to justify it as a workplace attribute? Or perhaps more to the point, why would we purposefully create organizing principles that made joy so difficult to find? Other people have written eloquently (Matthew Crawford and Kathy Davidson come to mind) about the historical origins of our institutions of work and school. All of which is fascinating and, at the least, serves to suggest that we built these institutions to serve a different time and a different perspective – they’re not inviolable.

Still, organizations are made up primarily of two things: people and relationships. Understanding organizational relationships is difficult. Understanding people – at least as individual collections of behaviors and beliefs– is impossible. At one point I looked up “biases in judgment and decision-making” in Wikipedia. The list ran to 168 items.

“So what?” you may fairly ask. Life’s complicated. You’ve got a business to run, bills to pay, a payroll to meet, strategy to craft, markets to expand. How can you be expected to take responsibility for the inner life of the people who work for you? I understand the question–I just think it’s the wrong one.

Here’s the better one. What sort of organization do you secretly dream of working for? Would bright, energetic, creative people–if they had the ability to choose to work anywhere they wanted to–choose to work with you? Are you sure?

It’s been fun. Thanks for reading. I’m off to the bookstore to roam the racks – a real bookstore with old-fashioned books where literary serendipity is still possible. The last time I went looking for Christopher Moore I discovered Susanna Moore – a lovely happenstance. This time I’m thinking about picking up Christopher’s latest novel – it seems that the lust lizard of Melancholy Cove may have been spotted in the canals of Venice. I love sea monsters.

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What Matters Now

April 23rd, 2014 | Posted by admin in Book reviews | Management - (0 Comments)
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“What Matters Now – How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation” – ©2012 Gary Hamel, Published by the Jossey-Bass

“If I can’t dance, I don’t want to be part of your revolution.” – Emma Goldman

There’s something discouraging about the subtitle of Hamel’s book: “Relentless”, “ferocious”, “unstoppable”. Those are not adjectives that I’m eager to spend my days worrying about. But his “How to win..” teaser disguises the larger question he raises: What does “winning” really mean in the 21st century? His answers are as much a sociological insight as a business one.

I don’t want to draw too undisturbed a line between Goldman’s political anarchism and Hamel’s management anarchism but there are some intriguing parallels. While Goldman believed that capitalism was incompatible with human liberty, Hamel insists that embracing freedom and self-determination is crucial to the management view he advocates. But both issue forceful challenges to the status quo. Goldman said, “I want freedom, the right to self-expression, everybody’s right to beautiful, radiant things.” Hamel speaks of “mending the soul…ensuring that management serves a higher purpose” – finding ways to rouse the human spirit at work.

Hamel describes himself as a “committed capitalist” and like other defenders of capitalism from Adam Smith to Ayn Rand he believes individual self-interest can feed the common good. Unlike many other modern-day capitalists he insists on one key caveat­–the linchpin of his entire argument:

“Like nuclear fission, self-interest works only as long as there’s a containment vessel– a set of ethical principles that ensures enlightened self-interest doesn’t melt down into unbridled selfishness.”

And he is not kind, to say the least, to a certain brand of capitalists:

“Unfortunately, the groundwater of business is now heavily contaminated with the runoff from morally blinkered egomania. …we must all shoulder the responsibility for protecting capitalism from ethical vandals.”

(For another sobering view of this contamination, see Thomas Piketty’s important new book, “Capital in the Twenty-First Century.”)

Ethics is the philosophical thread that weaves its way through his pleas to rethink the fundamental assumptions of management. The stories he tells about companies stuck in the past and those experimenting in the present all pivot on how leaders regard their relationship with and obligation to the people who work for them.

Hamel’s book is divided into the five categories of things that he says “matter now”: values, innovation, adaptability, passion, and ideology.

His discussion of values is first an angry denunciation of the people responsible for the banking crisis and the “blow up” of the American economy, and second, a polemic against the moral decay he sees at the root of the crisis. Not a failure of capitalism but a failure of ” the custodians of capitalism.” And while he doesn’t have a grand plan for the “moral renewal of capitalism”, he does insist that we must face up to capitalism’s shortcomings “as currently practiced.”

There are, perhaps, some unexpected companies in the section on innovation: Procter & Gamble, IBM, Ford – and Whirlpool. See, in particular, Nancy Tennant Snyder’s book, Unleashing Innovation, “essential reading”, according to Hamel.

But the real rabble rousing comes in the latter half of the book as Hamel challenges the entrenched ideology of management and the relationships in the modern workplace. As he says, “bureaucracy and control have had their day.”

In an earlier work Hamel created his “Hierarchy of Human Capabilities at Work”:
Level 6: Passion
Level 5: Creativity
Level 4: Initiative
Level 3: Expertise
Level 2: Diligence
Level 1: Obedience

 His contention is that in today’s economy it’s the capabilities at the top of the list that create the most value. But there’s the rub. Telling someone to be creative or passionate won’t do much good. People choose each day whether or not to bring those gifts to work – and as Gallup, among others, have shown, mostly they choose not to. The challenge then, is not management getting employees to better serve the organization, but rather creating organizations that deserve the gifts that people can bring to work. Putting individuals ahead of the institutions. It’s not a common view:

“Managers the world over have spent the last decade wringing inefficiencies out of their operating processes. Now they need to face the fact that management itself is a swamp of inefficiency.”

The last section of the book is titled, “Aiming Higher.” Hamel chides us for being too easily satisfied, for not being incensed by “poisonous politicking, squandered creativity, debilitating cynicism, ignoble values, ethical shortcuts, executive egomania…”

In an effort to inspire management innovators he offers 25 “moonshots”, intended as a set of grand challenges – management’s equivalent to eradicating malaria – a collection of big issues that can inspire innovation and focus action. Hamel’s final question: “Who’s going to lead and who’s going to follow.” Aim higher.

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Gary Hamel (his web siteis the founder of the California-based think-tank The Management Lab. Since 1983 he has been on the faculty of the London Business School, where he is currently Visiting Professor of Strategic and International Management. Hamel is a co-founder of The Management Innovation eXchange (The MIX)– a groundbreaking open innovation project aimed at “reinventing management for the 21st century.”

 

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“Joy, Inc. – How We Built a Workplace People Love” – ©2013 Richard Sheridan, Published by the Penguin Group

“I never did a day’s work in my life. It was all fun.” – Thomas A. Edison

I apologize. This is not really a book review. It’s a plea. Put duct tape over the title if you must, but take Richard Sheridan’s book seriously. There may be something in “Joy, Inc.” to be critical of but I have no idea what it may be.

If you go buy this book (and you most certainly should) you’ll probably do so without telling anyone and without leaving it in plain sight on your desk for everyone to see. Rich explains why in his introduction:

“Joy in business sounds ridiculous. Perhaps that’s why, early on, I hedged on writing about building a culture of joy, why I was tempted to equivocate. Joy is a pie-in-the-sky, cymbals-clanging, music-playing, radical dream.”

But he also knows why we picked up his little book and brought it home anyway:

“It’s because you are hoping, somewhat beyond hope, to bring joy into your own workplace. Deep down you know that there is a better way to run a business, a team, a company, a department. You’ve always known it.”

Sheridan’s company, Menlo Innovations, is a custom software design and development firm in Ann Arbor, Michigan. The company name is a nod to Rich’s childhood hero Thomas Edison and his Menlo Park laboratory. Sheridan’s company is populated by Menlonians, a quixotic, talented, persistent, and relentlessly joyful group of presumed Earthlings. Their mission is “to end human suffering in the world as it relates to technology.” I imagine there’s a little tongue in their cheekiness, but all of us have our own stories of suffering the impertinence of bad software.

Menlo Innovations has won five Inc. magazine growth awards and was named one of 2013’s twenty-five most audacious small companies. People come from all over the world just to see the Menlo culture firsthand. In 2012 alone, they hosted 241 separate tour groups, totaling 2,193 visitors. All of which is impressive but not really the point.

As I read Sheridan’s stories and began to imagine I knew something about what Menloworld must be like to live in, I was struck by how much this narrative reminded me of my first exposure to the Toyota Production System and Lean Manufacturing: engaged people doing interesting experiments and improving their workplace. They even make good use of Post-it notes and visual management.

But I also realized that I was making the same mistake of getting caught up in Menlo’s interesting implementations and not paying enough attention to the radical thinking that gave rise to their unique structure and culture.

The fact is, if you look at John Shook’s (LEI’s CEO) YouTube video on the Lean Transformation Model you’ll see that Menlo’s creation fits right into his model. What’s different is how Rich and his Menlonians have answered the key questions of purpose (Shook’s “True north”), the role of leadership, and the fundamental assumptions that underlie their particular transformation.

And if you revisit Mike Rother’s “Toyota Kata” you’ll see that Menlo Innovations also uses his “Kata Code” to drive improvement and avoid falling into an implementation rut.

What is so beguiling about the Menlo story is they see joy as an end in itself. The fact that it has turned out to be a competitive advantage is almost regarded as incidental. One of the most telling stories in ‘Joy, Inc.’ talks about the largest bonus checks ever given to Menlo employees. The founders were feeling gratified, but an awkward conversation with one of those employees gave Rich the uneasy feeling that he was missing something. He later learned that the woman he was talking to had been promoted to a senior level by her peers on the same day that the bonus was shared. The bonus was, in her words, a “momentary thrill.” Being made a senior by the people she considered her extended family was “…the most meaningful raise I had ever been given. Joy.”

But don’t get the idea that this book is simply a collection of stories and philosophical asides. Sheridan has crafted a rigorous defense of his worldview and offers a structured way forward for those audacious enough to try.

Rich Sheridan is a wise and usually self-aware leader. We all have much to learn from him and his Menlonians. Treat yourself to a guilty pleasure, read “Joy, Inc.”, visit Ann Arbor, help spread the joy. Then do something very important and very difficult, build your own culture of joy.

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Richard Sheridan is the CEO, co-founder, and Chief Storyteller of Menlo Innovations, an Ann Arbor-based software development company. On their website  you can find additional resources, including white papers, tours, workshops, reading lists, and examples of their work. Go there. Nose around. Heal thyself.

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“Shop Class as Soulcraft – An Inquiry into the Value of Work ” – ©2009 Matthew B. Crawford, Published by the Penguin Group

“The truth does not reveal itself to idle spectators.” –Matthew Crawford

My first thought, as I ponder how to begin this review, is to remind myself that it’s not the goal here to get you to read this review instead of the book. Thus I can, without too much guilt, admit to you that I have no idea how to do justice to this reflective little book.

Crawford’s writing, like Robert Pirsig’s “Zen and the Art of Motorcycle Maintenance” weaves its way in and out of many layers of philosophical abstraction – within, not perhaps coincidently, a story about restoring vintage motorcycles.

It’s difficult, and unfair to Crawford, to try to distil “Shop Class as Soulcraft” into some tidy phrase that can describe what he’s created here. It is certainly, as his subtitle says, an inquiry into the value of work. But his extended descriptions of “work” and “value” are at the heart of his observations and he writes at length about them because his intent requires it.

Crawford’s story moves back and forth between observations of the work of the individual and observations of the larger economic context. One of his central tenets is that thinking is inherently bound up with doing, and to the extent that the modern workplace separates the two it does violence to our sense of agency, our sense of community, and the satisfaction we derive from, in his words, “rational activity together with others”. In the end he describes a “humane economy” as one in which “the possibility of achieving such satisfaction is not foreclosed ahead of time for most people.”

Part of what Crawford celebrates is the particular sort of intelligence required in what he calls the “stochastic arts” – those endeavors that have both clear evidence of success (my motorcycle runs) and uncertain paths to that success (the problem – and the solution – are not always known ahead of time). But this insight does not come without mastery and mastery does not come without experience or without failure.

Crawford’s own path to these insights is a circuitous one. He’s worked as an electrician, a technical writer, the executive director of a think tank, a motorcycle repairman, and is currently a research fellow at the Institute for Advanced Studies in Culture at the University of Virginia.

One of Crawford’s observations is that the invention of the assembly line and the parsing of craftsmanship into small, standardized chunks of largely mindless behavior served the interest of capital but did damage to labor – psychic as well as economic damage. He also asserts that managers are caught impossibly between the competing interests of capital and labor. As the source of our work becomes more distant from its uses, we lose our sense of community, become less engaged, and less fulfilled by our work.

Crawford sees an important role for the local entrepreneur in those niches that are relatively immune to the labor advantages of globalization. In his argument against the concentration of capital he says, “It is time to dispel the long-standing confusion of private property with corporate property.”

What this implies for the future remains uncertain. Crawford himself registers “a note of sobriety, as against hopes for transformation.” His council is to “seek out the cracks where individual agency and the love of knowledge can be realized today, in one’s own life.”

In Gallup’s recent “State of the American Workplace” report, Minnesota ranked last in the percentage of “engaged workers” – 26%. This book review won’t give you much insight into engaged workers, “Shop Craft as Soulcraft” might. Don’t be an idle spectator.

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This book review was written for Manufacturers Alliance – www.mfrall.com

“How to Measure Anything” – Douglas W. Hubbard    2nd edition published April 2010

“It’s better to be approximately right than to be precisely wrong.” –Warren Buffett

Douglas Hubbard’s underlying philosophy about “measurement” is that, in his own words, “…it never really meant an exact quantity.” That perspective begins to pry loose some of the skepticism that the title of his book, “How to Measure Anything – Finding the Value of Intangibles in Business”, invites. In a manufacturing world where the precision of six sigma seems pervasive, his idea of the “quality of information” is appealing, if sometimes confusingly recursive – a measurement of a measurement. Still, there is much to reflect on regarding Hubbard’s views of collecting and using information.

Hubbard is the inventor of something he calls Applied Information Economics (AIE), a counter view to traditional accounting-style risk/benefit analysis that focuses on measuring risk and the monetary value of information – a topic we’ll return to. He is the president of Hubbard Decision Research and the author of several books and numerous articles on risk analysis and information modeling. Much of his early work centered on quantifying the value of large IT projects. His web site, http://www.hubbardresearch.com/, offers additional information and downloadable samples of material referred to in his book.

“How to Measure Anything” isn’t really about measurement, it’s about making better decisions. The title of his book may beguile executives and managers, but to actually read it requires either the mindset of a statistician or an acceptance that getting the gist of things will have to suffice. I relied mainly on the latter.

The book is broken up into four sections. The first section deals with the concept of measurement itself and maps out the basis for what is to follow. The second section has insights into what to measure, and the third section talks about how to measure. The final section, entitled “Beyond the Basics”, ventures into interesting territory, including a chapter where he talks about “homo absurdus” and behavioral biases any application of measurement results must deal with.

Hubbard’s view is that the most valuable use of measures is to reduce uncertainty in the service of making better business decisions. Questions with high levels of uncertainty (many of the “intangibles” referred to in the title) are often susceptible to simple techniques to reduce that uncertainty. If one thinks about measurements in terms of ranges of values within a “confidence interval”, the link between “intangible” and “immeasurable” begins to seem less inevitable.

It’s generally accepted among statisticians that almost any model is an improvement over expert human decision-making, and using multiple models provides even further improvement. Hubbard makes a crucial argument that “expert opinions” can be calibrated and usually improved. In his book are several practice examples to demonstrate how you can calibrate your own “90% Confidence Interval” and get some practice improving your application of the concept.

Perhaps the most revealing aspect of Hubbard’s experience is his reflection that business leaders seldom ask the right questions or measure the right things. What gets measured tends to be what has always been measured or what’s easiest to measure in traditional ways. One of his primary tenets is that it is imperative to quantify the value of the information you’re trying to capture as well as the cost of capturing it. Once you’ve determined if the value of the information is worth the effort, careful analysis reveals that most of that value can be realized via one or two key measures – often not the measures initially assumed as most valuable.

If you tend to get excited by z-scores, regression analysis, Monte Carlo simulations, and Bayesian inversions, you’ll find much to keep you up late at night reading “How To Measure Anything”. If your interest falls more towards the bottom-line effect of informed decision-making, you’ll get to sleep earlier but you’ll still find much to challenge your existing worldview of what can and should be measured within your organization.

For most, Hubbard’s book is more of an uncomfortable paradigm shift than a simple how-to manual. It’s an important work that deserves serious reflection. As in many areas of inquiry, the right answers are often simpler to find than the right questions.

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