Join the Queue!

[caption id="" align="alignright" width="300"]simple system Queueing for the Proms 2008 on the south steps of the Royal Albert Hall (Photo credit: Wikipedia)[/caption]   I’m sitting on the steps outside the Royal Albert Hall in London. Fortunately today it isn’t raining, but even if it was, I needn’t worry. These days the Proms have an excellent system for managing the queue – rather like the ones on the deli counters in supermarkets. When you arrive, you are given a numbered ticket, which guarantees your place in the queue. Once you have your ticket, you can wander off for a coffee or a snack, or take shelter if it rains, knowing that everyone will be admitted in the order they joined the queue regardless. It is not particularly sophisticated – but it is a simple system, and it works. Simplicity is hard-fought-for: it does not happen by accident. Once a complex process or system is in place, changing it to remove unnecessary complexity is hard, just as all change is. Even stopping a simple system getting more complicated needs constant vigilance: otherwise, it is likely to gather exceptions and special cases, as well as extra checks that seem important, but which have a cost which is frequently overlooked. Just as nature dictates that the disorder of the Universe (or a teenager’s bedroom) increases with time, and that this can only be reversed by the input of work, so it is with organisations. Why does it matter? Because a simple system is inherently more efficient and less error-prone. Have you tried to explain your organisation’s processes to a new joiner? If so, how easy do you find it to explain the judgements required if the process has branches (if this, then that, but if not, then the other), and how quickly do people learn to make them properly? Good governance depends on people following the rules. Complexity makes it more likely that people will make mistakes, and also makes it harder to spot when people deliberately try to get round rules. For an extreme example of what happens with complexity, think about tax codes: with complex rules and many special cases, expert advisers earn a good living, which must be at the expense of either the tax-payer or the tax-collector or both. While that is good for the experts, does that not make its complexity bad for the rest of us?

Be prepared!

interview A few years ago I needed to hire an assistant. I’d fixed an interview, and everything was organised. It was five minutes before the time the candidate was due, and I was just collecting my papers and my thoughts. At that moment, the din of the fire alarm started up. There is – of course – nothing that you can do. Down the concrete back stairs, and out round the back of the building to the assembly point, into the London drizzle without a coat, while I imagined my interviewee arriving at the front. I had left all my papers on my desk in the dry, and had no other record of his contact details, so I had no way to suggest an alternative plan. A little while later, my mobile rang. Having arrived and been barred from entry, he had managed to track down my mobile number himself, and we were able to arrange to carry on with the interview while we dried out in a local coffee shop. Needless to say, his resourcefulness impressed me and he got the job. Despite the unhelpful circumstances of the interview, he was one of my best hires ever. Life has a habit of not going the way we plan it. Unexpected circumstances can often be turned to our advantage though, if we grasp them rather than trying to stick to the plan, and often the results are better than you could possibly have expected.

8 reasons to review your governance

[caption id="" align="alignright" width="300"]review your governance English: Corporate Governance (Photo credit: Wikipedia)[/caption] All organisations have to find an appropriate balance between central control and local freedom to act. Governance provides the framework and checks and balances within which this is established and managed. It ensures that the process by which decisions are made is appropriately managed. It allows them to be seen to have been taken in the best interests of the shareholders, taking account of all the demands on the organisation, the risks, and the information available at the time.

Review your governance

If several of the following statements are true of your organisation, it may well be a good idea to review your governance arrangements.
  • The governance structure (meetings and delegations) does not constitute a simple hierarchy underneath the Board, with clear parent-child relationships and information cascaded up and down the hierarchy
All authority derives from the Board (or equivalent), and no-one has any authority (including the authority to sub-delegate) unless given it explicitly or implicitly by the Board. Consequently all delegations and sub-delegations should form a tree structure with the Board at the top. Any structure which does not follow this rule will create confusion about where authority lies. Decisions and issues for escalation, and reports of lesser decisions taken, should flow up the tree. Policies, strategies, decisions made, etc, should flow down. This is not to say that the structure has to be complicated or bureaucratic – every organisation has to find the balance that is right for it.
  • The governance structure is not clearly documented (e.g. including a consistent set of Terms of Reference), communicated and understood
The governance structure exists to serve the organisation. It can only do this if people in the organisation understand it. Clear documentation that resolves any apparent ambiguities is an essential starting point, but this then needs effective communication.
  • People do not have clear written instructions as to the limits of the authority that they have been given, or these are ignored
This is part of the essential documentation of the structure. Without a clear statement of what they should decide for themselves and what they must refer elsewhere for decision, unhelpful deviations from intentions (in both directions) will occur. In one case senior time is wasted, in the other unintended risks may be taken. Naturally the limits specified need to be appropriate. Compliance must be monitored and enforced.
  • Committees are allowed to approve their own Terms of Reference and/or memberships
In order to ensure that the governance structure retains its integrity, any ‘parent’ body making delegations must retain control of the terms of the delegation. Approving ToRs and committee memberships are the primary ways it can do this. A committee approving its  own ToRs is like someone signing off their own expenses.
  • Governance meetings happen irregularly, or with papers which are poor quality or issued late
Unless meetings are irregular because they are only arranged when needed, irregularity makes it very difficult for those requiring decisions from the meeting to plan. That in turn leads to papers which are of poor quality or late, and so to delayed or riskier decisions.
  • Senior staff are allowed to ignore the rules which apply to others
Governance, like the law, only works properly if everyone plays by the rules. If the CEO believes it matters, he or she will be willing to set a good example by sticking to the rules themselves, and will expect other people to do the same. If the CEO does not think it matters, and is not willing to do this, it will be very hard to make other people do so.
  • Decisions are often taken late because of papers missing submission dates, inadequate information, wrong attendance, submission to the wrong meeting, unexpected need for escalation, etc
There are many reasons why a decision may be reached later than it was really needed. Sometimes the request may have been made to a meeting which did not have authority for that decision, perhaps because the value was too high, or because the decision was out of scope. Sometimes a critical expert is absent from the meeting. Sometimes the supporting paper does not contain, and the presenter is unable to supply, information the committee regards as essential. Mostly, however, these come down to poor planning, often driven by poor understanding.
  • There is a feeling that the governance process is too bureaucratic
If the system has been well-designed, this should be a rare complaint. Most commonly, it occurs for one of two reasons: levels of delegation have been set lower than the people concerned are comfortable with, or there is a reluctance to engage with the hard thinking required to make cases concisely but effectively. If significant, it probably indicates a mismatch - in either direction - in maturity between the staff concerned and the governance arrangements. Contact Ottery Consulting if you would like some independent help with to review  your governance arrangements.

If it isn’t broken, why fix it?

innovation Let's face it, if innovation isn’t change, what is? So in thinking about why change is difficult, and how to overcome the challenges, thinking about how to make innovation successful may help. A frequent characteristic of innovations is that the needs they address, or could address, are not recognised. History is littered with examples, from Marshal Foch’s view that aeroplanes were of no military value to Thomas Watson’s famous assessment that there might be a global market for at most 5 computers. Most people have heard the saying “build a better mousetrap, and the world will beat a path to your door”. Innovations still fail, though, because the world didn’t know it needed a better mousetrap, and so it wasn’t listening. Before you can even start to persuade people to adopt your innovation, you may have to help them to recognise that they have a problem it can address. Change initiatives are no different. I was recently helping an organisation plan a major change. I believed that the change would have consequences for other aspects of the operations, and that these consequences needed to be planned for too. Although I made several attempts to explain this to the CEO, I failed to convince her. Needless to say no such planning was done, and so I shall not be surprised if there are later problems requiring emergency solutions. A pity, but you can’t win ‘em all! How do change initiatives start? One or a few people have an idea about how to do things differently. Sometimes there may be a widely-recognised problem, but even then it may be a big step to create the link to the proposed solution. Often most people – even management – have not yet recognised that there is a problem, and before they will consider any change, they need to be persuaded that the need is real. Change initiators are often the people who are able to see what will trip up the organisation before others can, but that means that they also have the challenge of helping others to see what they see. Think of the lookout on a boat – their vantage point means they can see rocks ahead before anyone else, but before they can get the boat to change course they have to be believed. The power of the human mind to cling on to existing beliefs, for example that the rocks are miles away, is very strong. So change management starts with taking the time to educate people about the problem that needs to be addressed. Until they believe that there is a problem – that there are rocks ahead – trying to persuade them to accept the change required to address it is likely to be wasted breath. If you need help seeing the rocks, or persuading people they are real, do get in touch.

Which matters more, the path or the goal?

goal “Many are stubborn in pursuit of the path they have chosen. Few in pursuit of the goal.” Friedrich Nietzsche Why does that matter? Because as circumstances change, the path has to change. Your objective, your destination, remains the same, but the path you need to take to get there has to take account of unforeseen obstacles, newly-visible short cuts, etc. Obstinately pursuing the original path may lead you into unnecessary difficulties or delays, or even to somewhere different altogether. Of course that assumes that you knew where you were going in the first place. In my experience, often people are unwilling or even unable to define their goals really clearly. If you don't do that, all you have left to cling to is the path you have chosen - even when it is leading you to the wrong place! I’ve been told that, faced with an impending pile-up on the road in front of you, you are most likely to avoid it if you keep your eyes on the space you need to drive into, not on the car you are about to hit – but to do so is very hard! Similarly, being flexible enough to adapt the path you take through change, while keeping your eyes on the ultimate goal, is most likely to deliver what you wanted. Most of my work is concerned with 'soft' projects where the ability to flex when circumstances change is key. Nietsche captured the problem beautifully.

To Plan B or not to Plan B? That is the question.

how do we deal with risk The other night I was meeting a friend for dinner in town. You know how sometimes when you get down to the tube platform it feels wrong? It felt wrong. Too many people, milling about with resigned looks, not purposefully waiting. Then the public announcement: “the Victoria line is suspended from Victoria to Walthamstow Central. There is a shuttle service operating between Brixton and Victoria.” No train. No boards telling you when the next train is coming either. I have a choice: I can take the chance of waiting, hoping that if a train does come soon I might still be on time – but it might be ages; or I can go out and catch a bus – I will definitely be a bit late, but I know it will definitely come?

How do we deal with risk?

It’s a nice example of how we human beings deal with risk. I don’t know about you, but my thought process goes something like this. First I will take the higher risk option – perhaps partly because it is where I am.  As I wait, and nothing happens, I weigh up how late I am going to be if I catch the bus. At some point (if I am still waiting) I decide to cut my losses – either way I’m going to be late, so I opt for the more certain course and catch the bus.  This time, I waited 10 minutes before changing to Plan B, and was 20 minutes late. If I had changed immediately I would only have been 10 minutes late. It’s not very rational – the sensible thing surely is to take the low risk option as early as possible, minimising the lateness, rather than just hoping that Plan A will avoid us being late at all, and then finishing up being later than we needed to be. But it seems to be human nature to take the optimistic view like this. Usually when we have to deal with risk there is some kind of pain threshold we have to exceed before we are willing to consider an alternative course, even though the sensible point to do so may have been much earlier. I don’t know how much unnecessary pain we suffer as a result, but I suspect it is significant! Do you need help identifying the change options you have to deal with risk? Please get in touch.

No such thing as a free ride?

change and freeriding I was prompted to think about change and freeriding by Seth Godin's blog post: Seth talks in his blog about how ‘freeriding’, although usually considered reprehensible, can in some circumstances be a good thing.  In many cases – for example, not paying taxes, not vaccinating children – freeriders who get the benefits of everyone else’s compliance without paying the price themselves are rightly criticised.  However, in other cases, such as using Google, Wikipedia or TripAdvisor, those who pay for their benefits (perhaps through advertising), and so make providing the service worthwhile for the provider, actually benefit more (or even entirely) because of the many ‘freeriders’ who get a smaller benefit but pay nothing. Typically in these cases spread of information and access to new ideas is involved. Why do they work? In part because the information is seen as being unbiased (although of course that appearance can be abused).

Change and freeriding

Now think about change management. What is change management about? Getting people to willingly accept and even embrace new ideas and ways of doing things as quickly and easily as possible. When management tries to sell a change, there is a natural suspicion that the message is not all it seems, even when, if taken at face value, it appears to be beneficial. It’s like a restaurant review purporting to be independent when it is obviously a paid-for entry. On the other hand, when peers pass on the same idea, an objective judgement seems much more likely. Similar processes to ‘freeriding’ seem to be involved. So how does ‘good freeriding’ work?  There are three groups of people involved: those who benefit enough to pay, those whose benefits are free – and the facilitator who connects them. That suggests that it may help if the facilitator (change agent) is seen as having some independence, and not simply being one of the managers. Secondly, giving the ‘freeriders’ – those whose environment is being changed - the opportunity to be engaged meaningfully, if they want to be, is likely to help. By analogy, the lesson for those seeking the benefits of change (normally the managers) is that listening well to the people the change affects may well increase the value of the change achieved. If you would like to talk about how to deliver a strategic change effectively, please contact us.

A mug’s game?

informing board members I’m on my way to a Board meeting. My job as a Board member is to turn up about once a month for a meeting lasting normally no more than a couple of hours to take the most important decisions the company needs – decisions which are often about complex areas, fraught with operational, commercial, legal and possibly political implications, and often with ambitious managers or other vested interests arguing strongly (but not necessarily objectively) for their preferred outcome. Few of the decisions are black and white, but most carry significant risk for the organisation. Good outcomes rely on informing Board members effectively. This is a well-managed organisation, so I have received the papers for the meeting  a week in advance, but I have had no chance to seek clarification of anything which is unclear, or to ask for further information. In many organisations, the papers may arrive late, or they may have been poorly written so that the story they tell is incomplete or hard to understand (despite often being very detailed), or both. The Board meeting, with a packed agenda and a timetable to keep to, is my only chance to fill the gaps. I have years of experience to draw on, but experience can only take me so far. Will I miss an assumption that ought to be challenged, or a risk arising from something I am not familiar with? If that happens, we may make a poor decision, and I will share the responsibility. In some cases – for instance a safety issue - that might have serious consequences for other people. It’s not a happy thought.

Informing Board members

In order for a Board (or any other body) to make good decisions, it has to be in possession of appropriate information. These are some of the rules I have followed when I have set up arrangements to promote effective governance.
Good papers
Good papers tell the story completely and logically, but concisely. They do not assume that the reader knows the background. They build the picture without jumping around, and make clear and well-argued recommendations. They do not confuse with unnecessary detail, but nor do they overlook important aspects. As Einstein said, “If you can't explain it simply, you don't understand it well enough." Provide rules on length, apply (pragmatic) quality control to the papers received, and refuse to include papers if they do not meet minimum requirements (obviously it helps to be able to give advice on how to make them acceptable). You must of course choose a reviewer whose judgements will be respected. This may well result in some painful discussions, but people only learn the hard way.
Timely distribution
If members do not have time to read the papers properly, it does not matter how good they are. If I am a busy Board member, I may need to reserve time in my diary for meeting preparation, and this is a problem if I cannot rely on papers arriving on time. Set submission deadlines which allow for timely and predictable distribution, and enforce them. Again, be prepared for some painful discussions until people learn.
Informal channels
Concise papers and busy Board meetings are never going to allow for deep understanding of context. To overcome this, I have organised informal sessions immediately preceding Board meetings, over a sandwich lunch if the timing requires. Allocate a couple of hours for just two or three topics; bring in the subject experts, but spend most of the time on discussion. Not all Board members will be able to attend every session, but in my experience not only have they found them hugely valuable in building their wider knowledge of the business, but the opportunity to meet more junior staff has been appreciated all round. There are many other ways that informal channels could be set up. Different things will work in different organisations. Key to all of them is building trust: informing Board members properly means allowing them to see things “warts and all”, and trusting a wider group of staff to talk to them.
To do all of these things effectively, you need to have someone (or in larger organisations a small secretariat team) whose primary objective is to deliver them. This is not glamorous stuff, however important, and it easily gets put to the bottom of the pile without clear leadership. Finally, remember that nothing will happen unless the importance of this is understood at the very top.  If the CEO does not set an example by sticking to time and quality rules, no one else will.

Castles in the air

selling a vision A few years ago, I spent a fascinating week travelling around Europe. I was trying to put together a consortium to bid for funding from an EU industrial research programme. I was selling a vision. It was one of those “if its Wednesday I must be in France” trips, where after a couple of days my brain’s language processor gets so confused it just gives up attempting anything except English. Fortunately (but as usual), my hosts all put me to shame by speaking excellent English to me. This trip taught me a very important lesson about selling a vision which I have used many times since. No organisation wants to be the first to commit to partnering when all they have is an outline description of the objectives of the partnership. They feel they need to know who else will be a part of it, and what the content of the programme will look like. Without this, they don’t even really want to share their ideas of what they might contribute or what benefits they might receive. On the other hand, until they do share their ideas it is impossible to put together a realistic programme. So where do you begin? I describe what I did as “Castles in the air”. Think of the project as a fairy-tale castle floating above the ground. You have to be able to describe in some detail what this castle looks like from a distance. Of course, no-one can actually get to it to look inside, so much of the detail does not need to be filled in, but the description has to be convincing enough that everyone believes it is a real castle, not an illusion. In particular, they must never think that there is nothing holding it up!

Selling a vision

Putting that into project terms, there has to be a clear vision of what the project could do, broadly who may be involved and how they will benefit, even though none of it is agreed, and you have to feel and sound confident about it, just in order to get people talking about how they might contribute. Once you can get possible contributors to engage, they will help you fill in the detail, adapt the vision and underpin it with the foundations, until the whole project is solid enough to stand up by itself. The same principles apply to any situation where you need to influence many different people to  win their support for the same idea. Unless you can describe your “castle in the air” with confidence, as though it were real and solid, it will be very difficult to get a hearing at all. The more people listen and contribute, even if they are not yet fully convinced, the easier it gets to win over others.

The price of bananas is bananas!

the right price I have recently moved house. I moved from a small and very ordinary town in Oxfordshire to a bustling area of London. What a contrast! From largely white to multi-cultural, from sleepy to vibrant, from staid dormitory to entrepreneurial. One of the big differences is shopping. In Oxfordshire, there was little choice but to buy all your groceries from one of the big supermarkets. When I first lived there, there were many butchers, greengrocers and bakers. Over the years they have all shut up shop, unable to compete with the demand for the convenience of "all I need under one roof" and "open when I get home from work", even if supermarket prices can be high. Here I am spoilt for choice, especially with butchers, fishmongers and greengrocers. What a delight to be able to wander up and down the stalls, with the noise of vendors shouting out offers, with the bright colours of peppers, tomatoes, oranges and lemons and the indefinable smells, looking for the freshest, the fattest, and (wishfully) the tastiest.

The right price

One thing though took me by surprise. The price of bananas. Most of the market fruit and vegetables are good value by comparison with the supermarkets. But bananas? I’d guess the market price is about double the price in supermarkets! What is the right price? What is going on? The big chains compete with each other, not with market traders. If one shop puts a price down, the others pretty much follow suit. If one decides that bananas are to be a loss-leader, probably the rest do too. And this sort of pricing is like a ratchet – if it becomes established, it is very hard to move it in the other direction. The supermarkets may paint themselves into a corner. Pricing matters – and not just because companies exist to make a profit. Price sends a signal about what something is worth. “You get what you pay for” as the saying goes. Paradoxically, you may get more people coming to an event for which they have to buy a ticket than will come to one that is free, because the free event is not valued. Needing an income, I once took a job which paid considerably less than I had previously been earning. Result? I got very bored because no-one thought to use my higher skills. I was pigeon-holed by my price, and I left as soon as I could. Pricing that does not match value may serve a necessary short term purpose, but in the end it serves no-one very well. The right price matters.