Disrupt, Disintermediate, De-Layer, Dynamize



by Doug Kirkpatrick, US Partner at NuFocus Strategic Group and Roger Burlton, President of Process Renewal Group


All around us, we are witnessing a rapid disruption of traditional business models. The shift is from fierce individual competitors to those that feature multiple partners playing nicely together in a shared value network for the benefit of customers with fickle loyalties and ready to move to something new, exciting and better. Rapidly disappearing are those companies trying to hang on to control of all the moving parts.

In the new value networks, collaboration among partners is the essence and win-win-win is the payoff. Each player brings optimal capability in its domain of capability and together they develop new operational work streams that can scale fast and earn trust in the marketplace which is essential for the sustainability of their business innovation. Obvious (and oft-cited) examples are Uber and AirBnb, which people may be tired of hearing about but which demonstrate a clear pattern. Such foundational disruptions in any industry will bring both adopters and resistance.

Regulatory and legal challenges threaten to stop them, especially when there are lost or diverted resources involved, but at best these annoyances just slow them down. Like ever-creeping glaciers, resistance ultimately proves futile. There is, of course, collateral damage when these or any economic game changers are introduced. The serious decline of supply and the price escalation of rental housing in many cities because of Airbnb, as well as the taxi revolts and municipal constraints imposed on Uber, are examples. In a short time, however, they get sorted out (even though some will not come out winners).

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The Age of the Self-Managed Organization



Every organization optimizes on something. W.L. Gore & Associates is known as the most innovative company in America. To enjoy extraordinary customer service, customers can call Zappos and chat with a cheerful representative for hours about shoes. Tomato giant Morning Star optimizes on simple core principles.

A principle is a fundamental, primary or general law or truth from which others are derived. Human principles are not unlike physical principles (for example, gravity). Principles exist, and they’re always working. People can choose to align their behavior with fundamental principles or not, but choosing to ignore principles (like gravity) can have serious consequences. Similarly, choosing to ignore human principles (like respect for the voluntary nature of human interaction and keeping commitments) can cause enormous damage. Notorious examples abound, like Charles Ponzi fraudulently promising investors unrealistic arbitrage returns.

While ignoring basic human principles carries serious costs, aligning actions with principles conveys significant benefits.


Self-Management is Fractal Management

The world is becoming more complex. Some reports indicate that human knowledge is doubling every 13 months. Atul Gawande, author of The Checklist Manifesto, writes that with over 13,000 ways for the human body to fail, medicine today is the art of mastering complexity, if it can be mastered at all. Complexity is a constant of modern organizational life.

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Rock the Culture: The Power Chords of Strategic Dialogue

Tin Can Phone


Well those drifters days are past me now

I’ve got so much more to think about

Deadlines and commitments

What to leave in, what to leave out…

–Bob Seger, Against the Wind


Item: Ben Farmer, in The Telegraph (UK), reports on research that shows parents’ immersion in smart phones has left some neglected children starting primary school unable to hold conversations. One head teacher said: “There is limited parent/child interaction. Four year-olds know how to swipe a phone but haven’t a clue about conversations”. Another primary school leader warned: “We are having more and more children entering our early years stage with delayed speech and a lack of school readiness.”


Item: The Pew Research Center reports “the volume of texting among teens has risen from 50 texts a day in 2009 to 60 texts for the median teen text user. Older teens, boys, and blacks are leading the increase. Texting is the dominant daily mode of communication between teens and all those with whom they communicate. The typical American teen is sending and receiving a greater number of texts than in 2009. Overall, 75% of all teens text.”


Item: According to USA Today, a study conducted for online casino Yazino found that one in four people spend more time socializing online, via sites such as Facebook and Twitter, than they do in person. The study also found that even when there is an opportunity to see people face-to-face, on weekends for example, up to 11% of adults still prefer to stay at home and communicate on their devices instead.


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Invite, Include, Inspire





Item: Arvind Suresh, writing in Discover magazine, reports that Jacob Sherson, an associate professor of Physics at Aarhus University (AU) in Denmark, and his colleagues have been working on ways to develop quantum computers by efficiently manipulating atoms with lasers. They are working to transcend the challenge of developing ever-smaller transistors to crunch bits of information in one of two states, 0 or 1. Quantum computers, based on quantum systems (atoms, electrons, photons) allow bits to exist as 0 and 1 simultaneously, allowing for massive, parallel increases in computer power. One challenge in manipulating atoms is “sloshing”, where a sudden move with a laser “tweezer” may cause an atom to slosh in the tweezer and produce calculation errors. Inspired by a Danish tech radio show, Sherson decided to gamify the challenge and invite citizen scientists to find the best solution. The project, Quantum Moves, created games where players manipulated atoms as efficiently as possible. By mapping the mouse positions of successful players, thousands of scientists can solve the problem far faster than one lonely researcher trying to find the perfect algorithm.


Item: Atul Gawande, in The Checklist Manifesto, describes how Peter Pronovost, a critical care specialist at Johns Hopkins Hospital decided to try a radical idea: a checklist for ICU doctors. He created a simple, five-point checklist for doctors to avoid infections when putting in a central line (first point: wash hands with soap!). For one month, nurses observed how often doctors followed each step. In more than a third of patients, doctors skipped at least one step. The following month, Johns Hopkins administration authorized nurses to stop doctors if they saw them skip a step—a revolutionary move in the hierarchical hospital environment. Over the next year, the ten-day line infection rate dropped from 11 percent to zero.


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The Management Span of Uncontrol


According to Deloitte’s Global Human Capital Trends 2016 report, US companies today have an average span of control — the number of people reporting to a supervisor — of 9.7, rising as high as 11.4 at large companies. These findings are congruent with research reported by authors Gary L. Neilson and Julie Wulf in 2012, where they noted that the CEO’s average span of control, measured by the number of direct reports, has doubled, rising from about five in the mid-1980s to almost ten in the mid-2000s.


Concurrently, virtually every survey of employee engagement shows 60-70 percent of U.S. employees are disengaged at work. The Gallup organization reported that a majority of employees, 51 percent, were still “not engaged” and 17.5 percent were “actively disengaged” in 2014. Gallup estimates the cost of disengagement at more than $450 billion per year — a staggering number.


Do managers affect engagement? Victor Lipman, author of The Type B Manager: Leading Successfully in a Type A World, devoted an entire chapter to the fact that people leave managers, not companies. He highlights the centrality of the relationship between manager and employee as a critical factor in the disengagement epidemic.


The troubled relationship between management and engagement begs a question for organizational leaders: how’s all that management control working for you?


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3 Messages From the Workplace of the Future



Like staccato bursts of data from the interstellar spacecraft Voyager, the workplaces of the future are sending new messages to the people that will be soon be joining them (and in many cases, already are). The new messages are replacing the outdated memos crafted for the dawn of the industrial age, when information traveled at the speed of Morse code.


Message 1: We Trust You. This message replaces the standard subliminal workplace meme that “we don’t trust you.” Examples of bad practices abound: absurdly restrictive limits on purchasing authority, elaborate inventory controls on disposable work supplies, ubiquitous surveillance and tracking.


How about giving people the freedom to implement solutions to problems and seize opportunities in the workplace if they are equipped to do so? Brian Carney and Isaac Getz, quoting former Chaparral Steel CEO Gordon Forward in their book Freedom, Inc., describe the current reality as managing for the 3 percent. In other words, creating rules to control the small number of nonconforming employees who might misuse their autonomy, while suppressing the innovation and creativity of the 97 percent who just want to do a good job. Carney and Getz relate the story of the small company CEO who saw a secretary dipping into the office supplies for back-to-school needs, so he banned anyone from ordering office supplies during the summer. That’s the recipe for an engaging workplace!


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The Four ‘Cracies of the Future of Work

shutterstock_180506675Furiously weaving away on a large chunk of the future of work tapestry are four movements ending in the suffix “-cracy”, which comes from the Greek word “kratein”, meaning “governing power”. In the case of democracy, for example, the preceding root word, “demos”, is Greek for “people”. Democracy, therefore, is a state of affairs where the people hold the governing power. Let’s consider these four weavers one by one, in no particular order.


Organizational Democracy. Key Advocate: WorldBlu, headed by founder Traci Fenton. Key Sourcebook: The Democratic Enterprise: Liberating your Business with Freedom, Flexibility and Commitment, by Lynda Gratton.


According to WorldBlu’s website, organizational democracy is a “system of organization that is based on freedom, instead of fear and control. It’s a way of designing organizations to amplify the possibilities of human potential — and the organization as a whole.”


WorldBlu is driven by an audacious vision to have one billion people working in freedom around the world. They hold an annual summit, certify participating companies as freedom-centric workplaces, develop leadership, host a boot camp and conduct research.


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Innovation and Leadership in the Workplace of the Future


There is no shortage of drivers competing to advance organizational freedom and engagement: technological, sociological, generational, philosophical and myriad others. I believe that innovation and leadership economics will vie for the pole position as key drivers in the race.


Gary Hamel has written eloquently about the management tax imposed by bureaucracy. The direct overhead costs of maintaining hierarchies are massive. The opportunity costs are equally compelling. One of those opportunity costs is unrealized innovation.


There are great examples of virtuous innovation practices in vanguard companies. W.L. Gore & Associates, for example, is widely known as “the world’s most innovative company.” At Gore, everyone is free to innovate. The ability to actually lead the development of an idea depends on one’s credibility, which is earned over time. The open sourcing of innovation at Gore led to the creation of entirely new businesses in Elixir guitar strings and Glide dental floss.


Unfortunately, not all companies seem to value innovation everywhere. Ideo co-founder David Kelley, in a brilliant TED talk called “How to Build Your Creative Confidence” that has been viewed more than three million times, talks about dedicating his life to helping as many people as possible regain their thwarted creative confidence, and think of themselves as innovators. In Kelley’s words, to “have people realize that they’re naturally creative, and those natural people should let their ideas fly.” How many organizational leaders actually believe that, and act accordingly?


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Twenty-Eight Keys to Unlocking Organizational Culture



There are myriad reasons to investigate an organization’s culture. Employees may want to better understand the ecosystem in which they work. A job seeker may want to check out a prospective employer. A corporate suitor might perform due diligence for an acquisition or merger. An academic may simply want to do research. Regardless of reason, there are some basic elements to understanding the culture of an organization.

Here are twenty-eight key areas to interrogate in order to develop a useful snapshot of any organization’s culture:



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