How to Handle Grumblers? Fukuda’s Parable in the Age of AI (part 2)

 

So how should we handle Grumblers? Some years ago, I introduced a transformation metaphor in a book called Andy & Me. The metaphor & underlying principles hold true & help us navigate intense turbulence. 

The Most Common Mistake

Grumblers comprise 10 to 20% of the organization. They cross their arms & resist any change. ‘This is sure to fail,’ they mutter. ‘The old way was perfectly fine.’ Common mistake: paying attention to Grumblers, giving them a platform or trying to understand or change them. The truth is, you can almost never change them, and if you do, it’s rarely worth the effort. [Caveat: on occasion, you’ll discover a Grumbler who is capable & cares deeply but has been thwarted by poor management. Such people can be diamonds in the rough.] How to manage Grumblers?  Here are noteworthy approaches.

Steve Jobs, Jack Welch & Toyota

No bozos ever! Steve Jobs’ wise & witty aphorism informed Apple during its glory years. The key, Jobs suggested, was to screen Grumblers & other bozos in the recruitment phase. (‘No bozos ever’ is a robust philosophy in all areas of life, no?)

Cull the bozos! Jack Welch’s philosophy centered on candid feedback, aggressive talent differentiation (the "20-70-10" model), and empowering CHROs to act as the "Head of Player Personnel" to build winning teams. Welch famously declared that CHROs were as important as CFOs.

Everybody deserves a chance. This is Toyota’s philosophy, which I absorbed as a young manager & engineer. This can work well if you have an excellent recruiting, training & development systems, as well as a fair process for culling Grumblers.  (Companies with strong team cultures often let teams handle difficult internal issues & generally support the team’s personnel decisions.)

My Preference: Ignore the Grumblers

My preference is to ignore Grumblers. Do not try to argue, understand or provide them with a platform. This may seem counter-intuitive.  (Shouldn’t we fix our weak points?) Grumblers are an energy & creativity sink. Focus on developing & rewarding your Rowers.

Proviso: If a Grumbler is actively sabotaging your transformation efforts, you must act.

Grumblers in the Age of AI

Here’s a common scenario: We’re working on a major improvement or Innovation project. We have access to AI agents & related tools, but a minority resist new ways of working.  Some are overt in their resistance.  (I have a PhD in marketing. What is this Growth Hacking stuff?). They’ll openly argue & actively resist any change.

Other grumblers are more subtle and play various destructive power games. Here are a few:

·       Blame game – (See what you made me do!)

·       Scapegoating

·       Withholding information

·       ‘Silly bugger’ (British slang) – wasting time, fooling around, or acting in an annoying way.

World class management systems make What is Actually Happening visible. (This is one of my priorities in any mentoring engagement.) You can run but you cannot hide.  Grumblers, game-players, fakers and the like are quickly exposed.

I advise my mentees to create stages, forums, and ‘shows’ wherein your stars can shine. These can be Shark Tanks, Innovation Councils, Pitch Competitions, Problem Solving Fairs and the like.  The point is to provide a showcase for your best and brightest. And added bonus is that Grumblers are exposed & usually neutralized by the bright light of reality.

More to come, stay tuned.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Ambidexterity – How Do I Engage Our Board & What’s Their Role?

Building a two-gear organization (aka ambidexterity) is the senior leader’s Job One. Can we both protect the core business with OpEx/Lean AND ignite new Growth with digital methods? So, how do we engage the Board and what’s their role?

Doing nothing is our riskiest option...

Let’s start with the second question. The role of the Board includes:

• 1.     Oversee strategy.
• 2.     Oversee risk management.
• 3.     Assess the CEO and plan for succession, and
• 4.     Develop & oversee executive compensation plans.

The purpose of a high-performance Board is to secure & sustain the creation of value and prevent the destruction of value. Ambidexterity is a core element of risk reduction, and therefore of strategy in the 21^st C. Ambidexterity inoculates us to our era’s dark triad of risk – obsolescence, ceaseless turbulence, and Black Swans.

The Board, therefore, must ensure the company’s winning logic & strategic plan explicitly address ambidexterity and commit to developing the needed capabilities. The Board must also a) ensure the annual business plan translates this into concrete action & metrics, b) align incentives, and c) monitor & assess progress.

Doing Nothing Is the Riskiest Option

How do we engage the Board in our quest for ambidexterity? Board members usually come from areas like Operations, Finance, and Engineering, and have deep insight in how to protect the core business. But they’re usually less familiar with the methods & mental models of disruptive innovation.

So, Board members are at a distinct disadvantage when asked to assess, say, a portfolio of innovation initiatives. All the usual indicators – Market Share, Revenue, Profitability, ROI, CAGR and the like – are zero. By contrast, the existing business portfolio, even if it’s in decline, reliably generates measurable value. So, the Board member’s mind & gut say, “Stop!”

But shooting down innovation initiatives is our riskiest option. How will we grow? How will we learn? How will we build our muscles for the daunting challenges ahead? Some Boards are committed to growth through M & A. Nothing wrong with a well-planned & executed M & A. But if our organization fails to embrace disruptive innovation, how will our new acquisition grow? In my experience, the new unit absorbs the mindset of the mother ship – and adieu, innovation.

So, how do we help the Board understand disruptive innovation? I’m partial to Executive Forums, Learning Expedition, and Board mentorship. I’ve addressed that last one in earlier articles.

Executive Forums

My colleague & co-author, Laurent Simon, has organized a series of Exec Forums in Singapore in partnership with our joint alma mater, INSEAD (‘Business School to the World’).  Our idea is to connect senior executives with a) peers from other industries facing the same challenges, and b) talented ecosystem practitioners who can demonstrate both what’s happening, and what’s possible.

Learning Expeditions

These entail visits to an innovation hot spot and the leading industries therein over three or four days. Each attendee accepts a specific learning objective & must report out what they saw & what it means at a structured debriefing. (No corporate tourism). Learning Expeditions are a major undertaking, but tremendously valuable. A high-performance innovation team in the midst of a splendid sprint is hard to forget!

In summary, the Board has a leading role in Strategy and Risk Management. By educating the Board on the methods & mindsets of disruptive innovation, we can help them understand ambidexterity. And that doing nothing is our riskiest option.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Business Ambidexterity – Where Do We Start?

 Ambidexterity is the senior leader’s Job One. Can we 

1. Protect the core business with OpEx/Lean, and
2. Ignite new Growth using the Digital methods

 Let’s imagine our C-suite & Board are aligned. ‘We need to do this. Where do we start?’

Our mantra is ‘Thing big, start small and scale fast’.

Think Big

Think big means defining your Aspiration & Winning Logic. For example: We want to be the best (fill in the blank) in the world. And here’s our overall approach:

1.     Take out the waste & variation

2.     Get close to the customer, and

3.     Get Digital to the core

Each of these elements must of course be translated & deployed as concrete activities at each level using our management system & the disciplines of Strategy Deployment. Constancy of purpose provides a ballast during the inevitable rough patches.

Start Small

Start small means building a Lighthouse (aka Showcase) project that proves ‘this thing actually flies’. Our showcase project typically entails levelling up a critical customer journey or creating & launching an entirely new offering. Our showcase is also a space – physical, financial, strategic and cultural – wherein a kick-ass innovation team can work in a new way, protected from organizational blockers. Typical goals: 50%+ improvement in launch lead time & cost, customer satisfaction, and profitability. Prerequisites: executive air cover, otherwise the proverbial corporate ‘antibodies’ will shut you down. 

‘New ways of working’ means daily huddles around a team board (either analogue or virtual or both), visual management, weekly planning & review, and data-based decision-making.  No HIPPOs or ZEBRAS[1]. New ways of working also means bi-weekly playbacks for senior leaders, and bi-monthly report outs to a ‘Shark Tank’ who will continue to fund the project (or not) based on demonstrated traction.

How do we pick our Lighthouse (showcase) project?  Start with an internal audit of your core management systems:

·       Voice of the Customer

·       People system

·       Work system, and

·       Management system

Where are the biggest gaps? Which of the candidate projects can help fill these gaps?

Then apply a strategic filter: Is this project aligned with our Aspiration & Winning Logic?  And then or course, do an Ease/Impact assessment.

The Lighthouse project will likely follow the proverbial ‘hockey stick’ curve illustrated above. We need to pass the following tests:

1.     Does it wow? (If not, why build it?)

2.     Can we make money? (Kind of essential)

3.     Does it work?

The third questions entails two levels of scaling Can we scale our showcase across the target markets? Can we scale our new ways of working across the organization?

Best wishes,

Pascal    E: pascal.dennis@leansystems.org

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[1] Highest paid person’s opinion; Zero expertise, but really arrogant.

The Ambidexterity Challenge – What’s Our Overall Approach?

Ambidexterity is the senior leader’s Job One & entails developing the ability to both:

1. Protect the core business with the proven methods of OpEx/Lean, and
2. Ignite new Growth using Digital methods & thinking

It’s an immense challenge for senior leaders and the Board. Let’s imagine they're are fully aligned & agree to move forward.   What’s our overall approach?

Based on our experience in multiple industries, the following generic logic is a good starting point: 

1. Take out the waste & variation, 
2. Get close to the customer, and 
3. Get Digital to the core

You'll of course tweak, refine, and adjust what you emphasize based on your business situation, but you can’t go wrong if you start with this overall logic.

Take Out the Waste & Variation

It’s not unusual to do dozens of process improvement events (PIEs) in the first few years. OpEx/Lean principles have made major inroads the past few decades but companies that practice them consistently are in the minority.  Bluntly stated: OpEx/Lean is hard. Much ink, tears & vitriol have been spilt debating why this is so. 

Please note that I’ve included Variation in the formula.  Variation degrades the management system. In fact, W. Edwards Deming called it a ‘virus’ that infects everything. PIEs must not devolve into mere ‘scavenger hunts’ for waste – that’s comparatively easy. The challenge is finding the root causes of both waste & variation and eliminating them with OpEx/Lean basics (including standardized work, visual management, quality in the process).

Get Close to the Customer

This is where things start to get interesting. In my experience, many companies believe they know the customer even though they have little direct contact or knowledge of him or her.  For example, an otherwise capable & thoughtful senior leader team comprising predominantly male, Gen Y, English-speaking Engineers & MBAs living in Chicago confidently proclaim this or that about a female, Gen Z, Chinese-speaking and deeply Buddhist persona living in a small east Asia city.

How do they know who she is, what she values and why she buys or does not buy their offering?  ‘We hired a local marketing firm to do a series of focus groups’. Good luck with that. This is where Growth Hacking & other elements of 21^st C marketing comes into their own.  But it’s a very different way of thinking & behaving for most organizations.

Get Digital to the Core

This means embracing so-called ‘exponential technologies’ like AI, Data, Cloud, RPA, AR, VR, Drones, and Blockchain. It also means embracing Digital methodologies like Agile Ways of Working, Design Thinking, Lean Experimentation, and the afore-mentioned Growth Hacking. Here’s the challenge: how to turn these methodologies into an integrated way of working?  One that makes sense for the business challenges you’re facing. Otherwise, you risk getting lost in a forest without a compass.

Each step of course, lays the foundation what follows. For example, if you digitize bad processes you will, as an RPA & Agentic AI executive told me, ‘create garbage at the speed of light’. And the three steps are cyclical, not linear. As your business challenges evolve, you’ll have to keep cycling back to step one.  As the poet said, ‘Rust never sleeps.’ Next time, I’ll talk about the nature of the journey.

Best wishes,

Pascal    

E: pascal.dennis@leansystemss.org

Space - Battles We Have to Win, part 5

 Ambidexterity is the leader’s Job One and comprises: 1) Protecting the core business with Lean/OpEx, and 2) Igniting new Growth using Digital methods. Ambidexterity does not come easy. Here is the 5^th in a series on the battles we have to win.

The five blockers are a syndrome - each reinforces the others.

The deadly risks of our day are Volatility, Black Swans, and Obsolescence. Doing nothing is our riskiest option. When the ocean is in furious flux, alertness, agility and speed are of the essence, and ambidexterity is their clearest expression.

Ignorance, Fear, Scatter, Guesswork and Space. These are the ‘battles’ we have to win. Today I’ll talk about Space, summarize key lessons in the series.

Space

Whether we’re protecting our core business with Lean/OpEx, or igniting new growth with Digital, we have to make space for transformation – physical, temporal, financial, strategic, cultural and psychological space. Otherwise, corporate antibodies are likely to shut us down.  Indeed, (infamously) between 70 to 90% of both Lean/OpEx, and Digital transformations fail to meet their targets. If we do not create space for change, the blockers usually win. If we do not protect that space, the blockers always win.

Physical, Temporal, and Financial Space

A core element of my innovation work (aka ‘Smart Growth’) entails building a ‘Showcase’ wherein a selected, capable, motivated, 3H team of high achievers demonstrates a new way of working – and produces kick-ass results. And so, we need a dedicated physical space (aka Maker’s Space, Learning Lab, Incubator, Accelerator, Innovation Hub) wherein the team & the rest of the organization can learn by doing. We also need to carve out time, and a dedicated budget. For example, Lean experimentation & growth hacking entail landing pages, ads, explainer videos and the like through which we test & validate our hypotheses. Building an ecosystem of providers is in my experience the best, quickest & most effective way to doing so.

Strategic, Cultural, and Psychological Space

Strategic space means our strategy and its physical expressions (Obeya, Control Tower, Team Boards and so on) explicitly outline our Innovation targets and activities. Our visual expressions of Strategy reflect our commitment to ambidexterity: the is dedicated space for 1) protecting the core business, and 2) igniting new Growth.  The latter usually entails visual management showing the purpose, and status of our Innovation portfolio.

Cultural and psychological space means that senior leaders and the Board tirelessly express their commitment to working in a new way. DBS Bank (often cited as the ‘World’s Best Digital Bank’) is a good example. The bank’s Board & CEO, Piyush Gupta, have been the living expression DBS’ winning logic: Close to the customer; 30,000-person startup; Digital to the core. I can confirm that team members across the organization understand & accept the winning logic.  (I’ve randomly asked a few dozen of them over the years)

Transformation Blockers are a Syndrome

Our five blockers comprise a ‘syndrome’, in other words, a pattern of symptoms that reflect a specific pathology. Each blocker reinforces the others, making change particularly challenging. For example, Ignorance triggers Fear, which triggers Guesswork, which triggers Scatter. And these in turn compromise the physical, temporal and financial space needed to work in a new way. And that’s why 70 to 90 percent of transformation efforts fail to meet their objectives.

It's a heck of a problem, but it can be solved. That’s why I’m writing these articles.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

In case you missed earlier blogs... please feel free to have another look….

Transformation - the Battles We Have to Win - Ignorance
Transformation - the Battles We Have to Win

Guesswork – continued

 In the 21^st century, ambidexterity wins. We must both protect the core business with Lean/OpEx and ignite new Growth using Digital methods. Here is the fourth in a series on the battles we have to win.

Dangerous corporate animals

Ignorance, Fear, Scatter, Guesswork and Space - these are our blockers. Today I’ll talk continue talking about Guesswork. The remedies I discuss apply to both protecting the core business with Lean/OpEx and to igniting new Growth.

Guesswork

Guesswork entails jumping to conclusions in the absence of data or expertise. Direct causes include a lack of data, and cultural or leader arrogance. Last time I talked about how to fill the data void with YODA. Today, I’ll talk about cultural or leader arrogance.

HIPPO & ZEBRA Management

I’m the highest paid person in the room. What I say goes, and everybody knows it. That’s the HIPPO’s mindset. Data, who needs it? Facts, eye-witness accounts, I don’t care. World War I generals like Douglas Haig, John French, and Luigi Cadorna are among history’s most infamous HIPPOs. Each has a room in the Military Hall of Shame, and each valued their self-image more than the lives of their troops. Do their descendants not afflict us still?

I have zero expertise but I’m really adamant (or arrogant). That’s the ZEBRA’s mindset. Some company cultures value brashness and aggression. Oligopolies and other protected sectors are immune to the consequences of disastrous decision-making, not unlike WWI generals.

Fake it till you make it has become a cultural meme. The idea is that if you act confident and competent in a situation, even when you don't feel that way, you will eventually develop the actual desired skills and qualities. Such a mindset that can help you push past self-doubt and help you grow. But at some point, it becomes outright dishonesty. And left unchecked, ‘fake it till you make it’ creates a Guess work culture - phony, superficial, and prone to disaster.

There are other dangerous animals in the corporate menagerie including Seagulls, WOLFs, YAKs, and RHINOs, but you get the picture.

Building Your Culture’s Immune System

‘No bozos, ever’ was a Steve Jobs mantra. I’ve been lucky enough to work with some uniquely successful executives, and their common refrain is ‘You have to get the right people on the bus.’ That’s a polite rephrasing of Jobs’ mantra, no? A company’s Human Resources team and system has two essential & related roles: 1) to hire, engage, develop, reward, and retain good people, and 2) to identify & remove HIPPOs, ZEBRAs, and other dangerous corporate animals.

Company culture is the responsibility of senior leaders and the Board. Radical transparency means we leave our rank at the door. Facts trump opinion and hearsay. No facts? Sit down, and do not come here unprepared again. Working in a great organization is like playing hockey in the NHL. If you can’t skate, pass, and shoot, you won’t be on the ice. But if you’re humble, tenacious, and love the game, great companies will help you grow and succeed.

In my next article, I’ll address the fifth deadly blocker: Space.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Guesswork – Battles We Have to Win, Part 4

 In the 21^st century, ambidexterity wins. We must both protect the core business with Lean/OpEx and ignite new Growth using Digital methods. Here is the fourth in a series on the battles we have to win.

'Keep pressing buttons – something’s bound to happen."

Ignorance, Fear, Scatter, Guesswork and Space - these are our blockers. Today I’ll talk about Guesswork. The remedies I discuss apply to both protecting the core business with Lean/OpEx and to igniting new Growth.

Guesswork

Guesswork entails jumping to conclusions in the absence of data or expertise. Direct causes include a lack of data, and cultural or leader arrogance.

Filling the Data Void with YODA

How do we gather complete, end-to-end, and high-quality data in large complex organizations? YODA - we have to learn how to generate ‘your own data.’ Our management system is the key. Elite Lean organizations derive YODA from the daily, weekly, and monthly routines of Team Leaders, Group Leaders in operations roles, supplemented by capable support staff in Logistics, Finance, Quality and HR. The daily standard work (or ‘operating rhythm’) of a front-line Team Leader in a top-shelf Lean site will include regular walks around the zone with a checksheet generating the day’s Safety, Quality, Delivery and Cost data. This information flow animates the entire management system, including the senior level Obeya (‘Control Tower’), and is a thing of beauty.

Useful data is also available through connections with key support groups. For example, in a hospital critical infection rate data is obtainable from the Laboratories. (What’s frequency of these infections in the sample we send you each day? What other insights do they provide?’ Can you provide us with a regular report?). Similarly, in a complex logistics system, product damage can be tracked at critical loading and unloading locations. (Here’s our box damage checksheet. We’ll train your operators in how to use them, and what to look for). Technology such as sensors, drones, data analytics, and AI will augment our ability to develop YODA.

In the world of innovation and smart growth, we must learn how to develop YODA around our core customer journeys. Rapid, inexpensive experiments are the key, both digital (landing pages, ads, explainer videos) and analogue (e.g. Discover & Validation interviews, mashups mash-ups, pop-up stores).

A common failure mode is depending on a centralized, expensive, complex data system. (If we’re lucky we get some data at month-end). Is such data complete, high quality, and end-to-end? I don’t want to be misunderstood – such systems can be valuable, provided the IT & Operation teams work closely to confirm the data satisfies the user’s needs (what data, how often, to what users, through what user interface and so on). But can centralized data systems match the quality, insight, and timeliness or data gathered by people in the Gemba observing action in real time?

In my next article, I’ll address another key cause of Guesswork – cultural and leadership arrogance.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org