Vision Logs – the new way to do mission statememts

Practical steps towards maintaining a dynamic vision

Planning is crucial. Plans aren’t.

In the Management 3.0 paradigm the age-old ‘mission statement’ becomes a thing of the past. Instead you begin with a goal, but you execute with the goal of flowing. This perpetual re-visioning builds the institutional dynamics of resilience and adaptability.

The vision log is a monthly, quarterly, or semi-annual revisit and revision of your organization’s objectives. Here, instead of a static mission statement, you will create a shifting, growing journal chronicling the purpose of your entity’s existence. After every session publish a summary statement to show the evolving vision.

 Think big

Begin with a clear, definitive, and far-reaching description of what you hope to do; th e position you want to take in the market, how you want to impact customers, associates, investors, vendors, etc…

Additionally, write a synopsis of the conditions and issues that are most pressing on your goals. Describe the climate surrounding your endeavor. What are your biggest obstacles, who are your biggest (or most vexing) competitors? Include anything that is pertinent and discuss your plans to overcome these issues.

It is important to make this process an ongoing log, as opposed to a static statement. It will become a monthly journal that tracks the dynamic quality of your vision. The entire work is collaborative, the product of a group-think between principle stake holders.  The team leader can set the tone and parameters that will guide the other participants/owners. But before any collaboration, consider the following guideline for increasing the efficiency of your brainstorming:

Prepping for brainstorming raises efficacy.

Starting a group brainstorm session without doing some preparation can create inefficiency by causing people to fixate on the earliest ideas. Before every brainstorming session, send out a memo explaining the agenda or purpose of the session. Tell each participant to come up with 12 distinct ideas to begin the session. This gives everyone a chance to work alone in their own heads before coming to the group environment and will increase dramatically the number of ideas being discussed.

Dream forward – Design backward

Paint a picture of the future as big and bright as you can imagine. Then look at your available resources and work backwards from those limitations to create your first minimum viable product or service. This is part of the new psychology of business models.  Your minimum viable product  will be your first release; a deployable or demonstrable version of your product or service that you can test in the market place.

Stories in the agile process

From the minimum viable product you begin to develop your user stories. User stories are clearly defined goals from the point of the client/customer/end-user, leading up to the milestones or releases in your vision log. They only need enough detail so that those responsible for making them happen can give an estimate of the time, complexity, and potential problems involved in completing that story. Estimating is done in story points; these are values that indicate the difficulty of each story when compared to other stories on your list (backlog). Over time your organization will get better and better at estimating these user stories

Later in the agile process they you will break then down into the smaller user stories that make up your sprints. This happens in a sprint planning session.

Summary

Overall, let the vision log be a living, breathing, changing chronicle of your organization’s dreams and daring. Instead of being rigidly attached to one course of action, be open to where the flow of ambitions, markets, and reality will take your company.

(Credit for vision log illustration goes to Joe Fleming.)

How to Create Remarkable Teams PART 2 – Collaboration

Great teams are forged by collaboration and self-managementIf You Want Remarkable Teams…  Build for Collaboration

If you want a great race car, you build it for speed. If you want great teams, you build them for collaboration. To get you started I will expand on the list that MIT research scientist Peter Gloor calls the “genetic code” of collaboration: learning networks, ethical principles, trust and self-organization, knowledge sharing, and transparency. All of what I describe here applies to building remarkable teams as well as building a remarkable culture in your organization.

The 5 building blocks of collaboration

1) Create a Learning Environment 

This is quite challenging as it either never feels like there is enough time to dedicate to learning or it feels like an unproductive use of available resources. But, do not underestimate the value of continued individual and team learning. When human learning slows down, people tend to lose creative and problem solving capacity. In team development, research has shown that individual learning works best when accompanied by team learning.[1]

Some examples of shared team learning are:

Regular seminars and guest lecturers: Bring in experts and professors on various topics related to the history, science, or culture of your industry as well as sociologists, anthropologists, and technologists who work in peripherally related fields.

Cross-disciplinary training: On a regular basis have members of different departments lead instructional discussions on their particular specialty. So the designer teaches everyone about UX/AI, the coders teach about their development methodology, the project managers teach about agile protocols, and the sales people describe what it is like in the field.

Cross-cultural stimulus: Whatever field you are in, once-a-month take your team on an educational/cultural outing to do or see something that has nothing to do with thier work. E.g. take a team of developers to tour an abattoir, take the human resource team to a museum exhibit on ancient Egypt, or take legal on an outing to a flower show. It is important to make it a regular outing, and to really explore intriguing, albeit unrelated subjects as a group. The benefit of this kind of team activity, is the opening of one’s mind, and shared creative stimulus, which fosters innovation.

Show and tell: one morning a week, have team members or co-workers bring in an example of counter-culture that they have unearthed. Examples could come from art, comics, film, music, architecture, economics (weird black markets), music, media, etc… Creating opportunities for team members to communicate and share both creatively and intellectually improves team communications and fosters innovation.

These are just a few examples. You can explore and experiment with many other ways to create a learning environment. The key is to develop determination and commitment for the process.

2) Make Virtue an Organizing Principle –

It is essential to build in a framework of virtuous and ethical principles. My work and research has identified two categories of virtuous principles: 1) emotional capacity and 2) interactive capacity:

Emotional Capacity involves:

  • Empathy – the ability to feel what others feel
  • Openness – willingness to explore and to change
  • Emotional availability – capacity to share and express
  • Fortitude – tolerance for stress, uncertainty, or chaos
  • Emotional control – successful anger and/or frustration management
  • Humility – acceptance of criticism and/or direction
  • Consideration – social awareness, compunction, compassion, inclination for kindness
  • Curiosity – inclination to learn
  • Zest – enthusiasm for life, work, learning…

Interactive capacity includes:

  • Mutualism – ability to see your success in the success of others
  • Perspective – ability to see or sense the big picture, long-term thinking
  • Self-sacrificing – willingness to give personal gain for the gain of others
  • Rational capacity – ability to set aside emotional agendas
  • Cooperation – willingness to collaborate
  • Systems intelligence – sensing the big picture and how things connect
  • Benevolence – depth of commitment to not cause pain or suffering
  • Integrity – ability to inspire/engender trust and loyalty

Similar to creating a learning environment, building an organization that not only supports virtuous principles but also causes them, requires you to invest heavily in leadership. Your  dedication to creating a remarkable environment is crucial.

One of the most obvious steps toward creating a virtue-inducing environment is to look at your own level of emotional and interactive capacity. You (and your co-founders) should evaluate yourself using the above list of seventeen principles. Obviously, your behavior is one of the most important influences on your teams and your culture. An honest self-evaluation will tell you where you have to increase your emotional and interactive skills.

Beyond your own comportment, much can be done to induce virtuous behaviors. You begin with a sincere and explicit commitment to the betterment of all stakeholders. This means partners, investors, employees, customers and the greater community. You must have an attitude of, “Everybody wins or the game’s not worth playing.” Even competitors can win in this scenario, because, you set the standards. One way this will affect the competition for the better, is that you will attract the better employees who can bring you better and more customers. The competition then has to come up to your standards or drop out. (This is a bit simplified and is not always the case, but is a pattern we can expect to see increase in the future).

3 steps to building virtue into your organization:

Introducing and executing this commitment to virtue requires you to adopt a consistent, three-stage process of, 1) establishing standards, 2) reviewing standards, and 3) making adjustments accordingly. Here is how it could look:

i. Establish clear descriptions of the type of behavior you expect from everyone. Avoid vague or general expression, such as, “politeness or “integrity”. You should list specific behavior such as:

  • Listening attentively,
  • Asking questions that show curiosity and attention,
  • Being grateful for each chance to explain and clarify your expectations,
  • Expressing a willingness to learn,
  • Discussing persons who are not present as if they were,
  • Looking for opportunities to advance the interests of others-through support, acknowledgement, training, etc…

These are just suggestions to help you to generate your own list of desired behaviors.

ii. Review how well your organization lives up to the established principles. Do reviews:

  • Regularly (once a month),
  • Collectively (involving everyone), and
  • Rigorously (with honesty and diligence).

You may find it necessary to bring in professional facilitation if you are running into excessive resistance or acrimony. But, when you succeed at this step, you will have created a significant shift in your organization’s psychology.  You will have created a culture conducive to collaboration, greater employee engagement and enhanced productivity.

iii. Adjust the established principles as insights from the review process indicated. This is  a responsive process and not about setting hard and fast rules. Establish objectives and use these to assess and improve individual and group behavior in a continuous way.

3) Build On a Foundation of Trust and Self-Organization –

I will be discussing self-organization more explicitly in part 3. So, here, let’s focus on the importance of trust, which is a direct result of yours and your organization’s integrity. If you fail to create an atmosphere of trust you will fail to instill self-organization. Poor organizational trust is also an indicator of lower cooperation, productivity, and sales (Davis, Mayer, & Schoorman, 1995; Davis et al., 2000).

Trust has received attention from social scientists for decades. Like wise men exploring the elephant, each different scientific field describes a different aspect of the animal. Sociologists  (Luhman, Gambetta, Barber, Giddens, Sztompka, et al) are concerned with the position and role of trust in social systems and this sociological perspective has brought important insight into the nature of trust within a system and the differing ways to measure trust among the participants in the system. A quick summary might be: trust is the strengthening and weakening glue of an organization.

Psychologists (Erikson, Deutsch, Worchel et al) focus on trust as an interpersonal experience. In general, psychology explores a range of trust issues: starting from child development studies and continuing to the effect of organizational justice (DeConick, J. B., 2010), and even looking into the impact of facial features (DeBruine, Lisa, 2002). Think of the psychology of trust as: the individual and organizational factors that foster or diminish trust.

Economics and game theory also provide valuable insight into the study of trust (cf. Nash Equilibrium, Pareto Principle). In economics, trust is a mechanism of efficiency. The more trust that exists between players, the more efficiently the system, market, or organization will work. Basically, trust produces efficiency.

My own work brings together all these disciplines together in a management 3.0 model based on:

  • The importance of trust as a precipitator of self-organization
  • The importance of your own emotional state (which affects how others perceive you)[2] for encouraging trust
  • The importance of your organization’s rules and culture in fostering trust

A brief road map for increasing trust in your organization might include:

  1. Analyzing and adjusting your own attitudes and emotions towards others; if you don’t already have it, you must develop a deeply respectful and caring concern for the welfare of others (this applies to all partners and organizational leaders who must also adopt this position).
  2. Finding the right balance between bureaucratic controls (agency) and laissez-faire or staff-latitude (stewardship). To create trust you must give trust. This means you are willing to make allowances for mistakes. You must provide both the boundaries and the support for this.
  3. As the CEO or manager, demonstrate through your questions, actions, and policies, that you understand the interests of your staff and/or team members and that their interests are reflected in the way you make decisions.
  4. Model sincere patience, kindness, and understanding when you are hearing about errors and mistakes, or when investigating a problem. This will encourage organizational members to speak freely even if they are at fault.
  5. It is important to encourage and support even when the creative efforts of others fail. One part of fostering creativity and innovation is to accept the inevitable failures.
  6. Promote the importance of vulnerability by both modeling it and encouraging it through constructive contact. This means being willing to hear and consider the criticism of others. And always be conscious of the way you deliver criticism. Constructive criticism comes from a personal desire on your part to help people do their best.
  7. Involve stakeholders in a participatory way. This means allowing people to influence decisions to the extent that the outcome of a decision will influence them. The more the people you are interacting with feel they have influence over the outcomes of the decisions and actions in your organization that affect them, the more trust they will feel.

All of these directives require a fairly radical reassessment of organizational priorities, as well a will to change. So you must demonstrate very strong leadership.

As for trust building exercises and outdoor adventure weekends, they will provide limited or cost-ineffective value. Only a long-term commitment to maintaining a culture that fosters trust will pay off. In the context of the road map I have described above, it is possible to use “team-building” retreats as a tool in your culture of collaboration.

4) Knowledge Sharing –

In recreating your organization, the way you manage knowledge is crucial. In the past, knowledge management was given scant attention and was basically a default process that arose from other management and sales objectives. Scientific study in the last decade has made knowledge sharing a discipline in its own right.[3]

Some of the more obvious benefits of knowledge management are:

  • Sharing of valuable organizational information throughout organizational hierarchy.
  • Can avoid re-inventing the wheel, reducing redundant work.
  • Reduced training time for new employees
  • Retention of Intellectual Property after the employee leaves if such knowledge can be codified

Additionally, you can improve the overall talent of your teams and improve more abstract capabilities such as innovative thinking and problem solving. Studies have shown that fusing talent management with knowledge management practices can help:

  • Identify key knowledge workers,
  • Improve knowledge creation, as well as,
  • Information sharing,
  • The development of knowledge competencies, and
  • Knowledge retention.[4]

For startups and smaller organizations, the importance of instituting knowledge sharing from the beginning is paramount. It is much harder to install a structurally deep process like a knowledge sharing system once an organization has ballooned in size. The time to start is now or ideally from day one.

A simple way to conceptualize an enhanced knowledge management system is to simply focus on prioritizing knowledge sharing over the knowledge itself. This does not mean that you discount the importance of acquiring knowledge in its various forms. It just means that you value the sharing of knowledge more.

The very act of constructing mechanisms and processes as well as investing time into new knowledge sharing behaviors, changes the underlying dynamics of an organization. If you mange  organizational structure, technology, and expectations with conscious attention to the sharing of knowledge, a knowledge sharing environment will emerge easily. Additionally, the further you press the urgency of sharing knowledge, the more likely that a feedback loop will result. In this situation the collective awareness of the organization fuels an increasing attachment to knowledge sharing.

5) Operational Transparency 

Transparency is organizational honesty. However, because of the way it challenges the egos of founders, CEOs, and upper management, it is difficult to carry out. It takes personal courage to commit to radical transparency. I like to use the word radical because it means, going to the root of something. The value of radical transparency to your organization is manifold:

  • Transparency and organizational honesty fosters trust[5]
  • Improves participation and the quality of decision making
  • Fosters humility in upper management
  • Improves productivity by improving morale
  • Engages workers more constructively when the organization faces challenges.

Radical transparency is a management approach in which, (ideally) all decision-making occurs publicly. Daniel Goleman used the term in his book Ecological Intelligence. Radical transparency goes further than standard accountability. It requires transparent decision-making from the beginning. Accountability, on the other hand, is a process of verifying the quality of decisions or actions after the fact.

Side note: Exceptions to full transparency typically include data related to personal privacy, security, and passwords or keys necessary for access required to carry out publicly negotiated decisions. Additionally, sharing big plans prematurely is not transparency and is potentially counter-productive.

Here are some steps you can take to increase transparency in your organization and in your teams:

  • Make your decisions and the reasons for such decisions available to examination and evaluation by the people influenced by those decisions. The more your decision will influence them, the more access they should have to your reasoning and background surrounding the issue.
  • “Institutionalized self-critique engenders trustworthiness” (Fort, 1996). Do not be afraid to evaluate yourself and your organization publicly. For example, you could keep an edited corporate blog that stakeholders contribute to, logging your victories and your missteps. Everybody knows nothing goes perfectly. Having the humility and the honesty to share your foibles and failures will gain public goodwill and trust. It will also make your successes more meaningful when you publish them.
  • Avoid hyperbole at all costs. Speak in a matter-of-fact or even in a deprecating tone. The more realistic you are, the more trust others will have in you and your organization or team.
  • Ann Florini (1998), of the Brookings Institute, states, “Secrecy means deliberately hiding your actions; transparency means deliberately revealing them”, do not approach transparency as an abstract or general concept. Have a deliberate plan about how you will reveal your actions. This can include: weekly statements, monthly state of the union addresses and published logs as just a few options. Use your imagination and be deliberate.
  • Create a process to check in regularly with yourself and with other partners and team leaders. This is so you can review regularly and with rigorous honesty how you are doing individually and organizationally against the big four issues of transparency (Rawlins 2006):

1. Substantive information – is the information relevant, clear, complete, correct, reliable and verifiable?

2. Participatory environment – do stakeholders feel involved? Are there efficient mechanisms for feedback? Is substantive information easily accessible?  Does your knowledge management help members identify what information they will need?

3. Accountability – are you sharing information that covers more than one side of controversial issues? Do you practice full disclosure even if it might be damaging to the organization? Are you willing to admit mistakes?  Are you holding your organization and your teams to standards well above industry standards?

4. Secrecy – are you allowing yourself or organizational leaders to fall into counter-productive secrecy practices? These can include: behaviors that reflect a lack of openness, lowering the bar for secrecy, sharing only part of the story, using language that obfuscates meaning, and only disclosing when required.

Overall transparency requires that leadership models it. You must exhibit the behavior you hope to inspire in others. Doing so is sometimes uncomfortable but it will make you a better, stronger, more respected leader

Summary of why transparency is so important:

In the new world of management 3.0 inspired business, the best way to achieve transparency is not to do or say anything you are not willing to share with the world. If your business intent is ethical and virtuous, then choose to live in a fishbowl. You will attract better people and keep them longer. You will always be in a better position to handle the inevitable mishaps. And, if you trust yourself to be an open book, your customers will trust you. Living out in the open may take getting use to, but once you do, you’ll wonder why you ever thought the fog of business was the way to go.

In part 3 of this article I will discuss self-organization and what we can learn from insects and cliques.

Stay tuned, comment and share!


(return)
1.
Hirst, Giles; Van Knippenberg, Daan; Zhou, Jing; A cross-level perspective on employee creativity: Goal orientation, team learning behavior, and individual creativity, Academy of Management Journal, Vol 52(2), Apr 2009, 280-293.

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2.
“Just as perceptions about an individual’s ability, benevolence, and integrity will have an impact on how much trust the individual can garner, these perceptions also affect the extent to which an organization will be trusted” From an Integrative Model of Organizational Trust; Roger C. Mayer, James H. Davis and F. David Schoorman; The Academy of Management Review; Vol. 20, No. 3 (Jul., 1995).

(return)
3.
 Morey, Daryl; Maybury, Mark; Thuraisingham, Bhavani (2002). Knowledge Management: Classic and Contemporary Works. Cambridge: MIT Press. p. 451. ISBN 0262133849.

(return)
4.
 Eoin Whelan, Marian Carcary, (2011) “Integrating talent and knowledge management: where are the benefits?”, Journal of Knowledge Management, Vol. 15 Iss: 4, pp.675 – 687

(return)
5. 
Brad L. Rawlins; Measuring the relationship between organizational transparency and employee trust; Public Relations Journal Vol. 2, No. 2, Spring 2008

How to Create Remarkable Teams – Part 1

Atma figured out how to build remarkable teamsRemarkable teams – the Hallmark of Management 3.0

You are making plans for the success of your business. But is building remarkable teams at the top of your agenda? They way you build teams represents an enormous opportunity to set yourself apart from competitors and increase the likelihood of your success.

Over the last twenty years, social scientists have unearthed a mountain of valuable data and insight about team building. This two-part article will introduce you to what I consider the most important and essential ideas. To begin taking advantage of this knowledge, you will need to know two things about remarkable teams: what they look like (this week’s article) and how you create them (next week’s article).

What remarkable teams look like – part one: culture

Remarkable teams are a product of culture and change management. Let’s talk about culture first. Culture represents the environment, ecology, and underlying intentions of an organization. This is why it is such an important topic to organizational psychologists. Simply put, culture is both the cause and effect of an organization’s greatness or its dysfunction.

When it comes to building remarkable teams, culture is the cause on four different levels:

1) Materially, culture is the fabric of the relations between members.

2) Formally, culture represents the mostly unspoken rules that drive the organization, which influence the nature of team building.

3) Culture is also the efficient cause of an organization’s psychology. One way this happens, is when the cofounders, either knowingly or (usually) unknowingly bring in the dynamics that create the company’s overall nature and mood (i.e. the degree of function and dysfunction present). This in turn determines the kind of teams that develop.

4) Culture represents the aims and purposes of the organization. Goals shape the organization by pulling it into existence. This is similar to the way the direction you choose, determines the type of journey you experience.  And so, the way you first think about and start a project or business is of seminal importance. Decisions made early have an exponential impact on later efforts, including team building. The way an organization’s purpose influences its culture is known as the final cause.

Now that I have stated the importance of culture (maybe even overstated 😉 ) what does a functional, team-supportive culture look like?

Inspirational and engaging

Scientists have developed studies[i] around two important characteristics that contribute to functional teams:

  1. Psychological Empowerment- the way the culture supports and inspires the individual team members. [Optimal state: “My company culture makes me feel like I can do this.”]
  2. Affective Commitment – the way individual team members feel about their involvement and the other team members. [Optimal state: “I like my team and feel like a valuable part of it.”]

You can assess your team culture in two ways: first, by the degree to which your staff feels inspired to take part and their confidence for accomplishing their tasks. Secondly, by looking at the way they feel about their role in the team and how their interaction with the group makes them feel.  This means that you need to become very sensitive to your staff’s emotional state. You do this by momentarily setting aside your own emotions and tuning into what those around you are feeling. The information about their emotional state is in their faces, their voices, their body language, and the way they treat each other. With practice you can become better and better at noticing and analyzing this rich stream of data.

What remarkable teams look like – part two: change management

Fixing a less than ideal culture is known as change management. The name stems from the challenge of establishing new protocols and changing an organization’s psychology. As you know, humans tend to resist change. Your job as the leader, is to make change easier.

How to start: assess your ability to meet the following three goals of change management:

  1. Empowering leadership – how well do you encourage autonomy, self-management, collaboration, creativity and group problem solving?
  2. Relationship conflict – how good are you at diffusing and redirecting group tension, conflicts, animosity, and non-productivity?
  3. Personality development – do you personally inspire individual team members to practice functional behaviors such as open-mindedness, humility, patience, etc…? And equally or more importantly  – does your company culture foster these traits?

Taking an honest look at how well you empower teams, manage conflict, and inspire others will give you a sense of where you stand in the pursuit of building great teams.

So far, I have discussed contributing factors to recognizing remarkable teams. So, now the question is, how do you create remarkable teams? The answer is, first you build them to be remarkable, and then you manage them to stay remarkable. And that is the topic of PART 2 of How to Create Remarkable Teams… where I will cover the five building blocks of collaboration and describe how to manage through self-organization.

Stay tuned, subscribe, and share!


[i] Gilad Chen, Payal Nangia Sharma,Suzanne K. Edinger, and Debra L. Shapiro -University of Maryland; Jiing-Lih Farh -Hong Kong University of Science and Technology; Motivating and Demotivating Forces in Teams: Cross-Level Influences of Empowering Leadership and Relationship Conflict, Journal of Applied Psychology 2011, Vol. 96, No. 3, 541–557

The New Psychology of Business Models

Management 3.0 – a psychological shift

You have a great business idea but you are not sure how to develop it. Should you follow conventional wisdom and write-up a thirty-page business plan? No. In my management 3.0 model, startups will have more success if they adopt lean and agile business development principles, where failing fast is the premium strategy and the lean business model reigns supreme.

I first encountered the idea of developing a one-page business model in 2007 when I came across the Osterwalder model on the web. This struck me as an attractive alternative to the starting point for a business instead of, say, a 30-page business plan. What I didn’t understand then, was that the beauty and power of a business model is not that it is just a boiled down summary of a business plan, but rather a way to change my psychological approach to building a business.  Nobody was around to tell me this, so my startup (an early attempt to gamify corporate wellness), died a needlessly slow and painful death.

Fortunately, it all clicked when I encountered the literature around lean startups. In this article, my description of management 3.0 for business models draws on the work of several very bright entrepreneurs and thinkers, including: Alex Osterwalder, Steve Blank, Eric Ries, and Ash Maurya. I include links to their work at the end of this piece. I have also taken ideas from the efforts of Tor Grønsund and Rob Fitzpatrick.

It begins with a different starting point

Now that you have an idea for your business, or perhaps your company has an idea for a new division, or you want to reboot, either way you need a business model. “But wait!” you might say. “What about doing market research?”  Good point. In the management 3.0 process, some market research can still be done during the idea development stage. But things have changed. It is now possible to shift a large part of the market research into the product development phase. You do this by launching sooner than later. And you start by developing the simplest working version of your idea. You call this your minimum viable product (MVP). MVPs, continuous deployment, rapid iterations all represent major changes in growing a business. All of which is possible because of something I call, the collapse of the customer feedback float.

The collapse of the customer feedback float

In 1982 John Naisbitt wrote, in his classic book on future studies Megatrends, about the collapse of the information float. He defined the information float as the amount of time information spends in any media channel. The float was the amount of time between transmission and reception. As technology-satellites, cellular networks, etc…- made the transmission and reception nearly instantaneously, this float collapsed.

Today, technologies such as social media, smart phones, high-speed data mining, ubiquitously networked electronic devices, etc… have precipitated the collapse of the customer feedback float. This float refers to the amount of time it takes a vendor to understand whether their product suits the market’s interests.  As this float collapses, what used to take longer to figure out, costing a great deal, can now be determined faster and much cheaper. This collapse of the customer feedback float becomes part of the new psychology behind the lean business model.

The old school approach to business modeling

To contrast the differences I’ve been explaining, let’s breakdown the old school approach to business modeling (Figure 1 – below). First, you would do market research to gain some insight into a potential market or an underserved market. This would result in a prospective idea/solution. This idea would then be expanded into products/services to address the possible market need.

In this way, the old system would produce a defined solution for a defined problem. From this, a detailed plan for execution filled with scope and projections would rise up out of the business ether like Mount Olympus.  Hopefully, all the expensive market research was right on and success would follow. Unfortunately, most of the time, it wasn’t. What did follow, almost every time, was creeping or even ballooning scope, increasingly large investments to support a lengthy development process with little iterative feedback, and a big resource commitment to create an amazing product or service that the in the end market may not actually want.

The Old School Business Model

Figure 1 – The Old School Business Model

Now let’s consider what the collapse of the customer feedback float makes possible.

When you launch a minimally viable version of your product or service, the current uber-connected market place allows you to get high quality feedback from your potential markets almost immediately. This data can then inform your development process, ensuring that you are building products based on real-time, market demand. Developmental efficiency increases because it comes from shorter, iterative, development cycles that hew more closely to products and services the market actually wants. However, the really interesting benefit to this act-analyze-adjust approach is the way it impacts organizational and personal psychology.

The new lean business model – embracing the undefinable

By moving from a long view of development to an iterative view, you must be ok with not knowing all the answers. This is a psychologically superior position because it allows for greater innovation, resilience and adaptability. The old school methods of long-term planning and development created a false sense of security or pseudo-stability that has long been valued by stifling corporate bureaucracy. Overcoming this tendency gives both the new startup and the rebooting business a big advantage.

So, the basis for the old business model was that market research leads to a defined problem that leads to a defined solution that leads to big scope development which then risk a great deal of resource. So what does a Management 3.0 business model look like?

As a Management 3.0 lean business model entrepreneur you:

1) Take a step back from any pre-defined ideas about a product or service and think about possible consumer pains or undiscovered needs and…

2) Assume that you have an undefinable problem around a general pain or potential consumer need.

3) You then put forward an untested solution for your moving target of a problem.

4) Next you describe your Minimum Viable Product. This is your business hypothesis.

This approach (see figure -2) represents a new psychological positioning for the entrepreneur. The challenge is to admit that you only have an untested solution for an unproven problem. So what is the benefit to taking this position of uncertainty? You can now develop a business model around an evolving hypothesis that is subject to constant testing and iteration. This working hypothesis becomes your minimum viable product.

Figure 2 – a management 3.0 lean business model

The Management 3.0 lean business model canvass (Figure -3)

At this point, you are ready to write a business model around this hypothesis that begins with answering eight questions, and after filling out your lean canvas you begin testing your M.V.P. hypothesis in a cyclical approach.

The cycle is simple:

  • ACT – design, build, code, develop;
  • ANALYSE – release, test, measure, discuss;
  • ADJUST – design, build, code, develop;

Rinse, lather, repeat…

Each newly tested version of your evolving hypothesis – a.k.a. your iterating Minimum Viable Product gets plugged back into your business model. The eight questions can then be revisited and your model continues to adapt to market reality.

Management 3.0 Lean Business Model Canvass

Figure 3 – Management 3.0 Lean Business Model Canvass

The Eight Questions

Four questions expand on the product side (your untested solution) and four describe your approach to the market (your undefined problem). Remember, the undefined status is an asset because it keeps you in a testing, innovating mindset.

Product questions: built around your initial business hypothesis or M.V.P.

1) Outside support – what other businesses and services will you draw on for support?

  • Potential partners
  • Cloud SaaS providers
  • Incubators, accelerators, business networks
  • Investors
  • Marketing partners

2) Development – what tech or other resources will you need to build your business?

  • Open source, SaaS, existing platforms
  • Programmers, UX/AI, MBA, agile product/project manager, other specialists…
  • User generated content, crowd sourcing

3) Key Metrics – how will you get and measure continuous customer feedback?

  • A/B testing
  • Continuous deployment assessments
  • SEO, SMO and other new media stats
  • Landing page conversions
  • New customers acquired
  • Demographic analysis of individuals (potential customers) applying to become customers, and the levels of approval, rejections, and pending numbers.
  • Status of existing customers
  • Repeat behavior
  • Customer attrition
  • Turnover (i.e. revenue) generated by segments of the customer population.
  • Customer lifetime cycle and lifetime value

4) Costs – what is your cost per sale/customer?

  • Pro-rated fixed costs
  • Variable costs
  • What are your economies of scale (how much less will produce more of your product cost)
  • What are your economies of scope (what other products or services can you use offer using your existing structure)?

Market questions: built around your untested solution and who you feel will be interested

5) Target Audience – who will want this product?

  • Define and describe the demographic(s)
  • Psych profile
  • Niche vs. mass

6) Unique Advantage – what makes customers choose you over your competitor?

  • What makes you unique?
  • What do you do that will be difficult for your competition to copy or buy?

7) Customer development – how will you connect to and interact with your customers?

  • Web marketing: SEO, SEM, SMM,
  • Internet advertising
  • PR – blogs, press releases,
  • Events, demos, conventions
  • TV, radio, magazines, newspaper
  • Direct mail, flyers
  • Polls, surveys,
  • Beta testing
  • CRM options (sales force, pipeliner, google apps…)

8) Revenue – how will you make money?

  • Single sales
  • Repeatable sales
  • Subscription service
  • Freemium to premium model
  • Add-ons
  • Advertising revenues
  • Licensing/commissions
  • Sales projections (what are they based on?)
  • Projected customer life cycle and lifetime value

My canvas is one of several iterations based on the original Osterwalder version. All of them have value. Although this one is especially suited for agile development. The important thing is to start with one and begin testing your hypothesis.

A Better Way to Think

Allowing your perspective to shift from a big-plan-specific vision to a fluid-discovery-process is an important part of Management 3.0. Seeing business growth as a series of discrete discoveries instead of an overreaching plan wires your brain for flexibility. This, in turn, will enhance your creativity and your ability to innovate.  As you can see, Management 3.0 is more than just new tools for growing your business. It is a new way of thinking; a clearer, braver way to think.

———————–

Here are some links for more insight into this topic:

Osterwalder’s Business Model
Ash Maurya
Eric Ries
Steve Blank
Tor Grønsund
Rob Fitzpatrick

Looking forward to your comments and please share if you like 🙂

Co-Founder Dating: what you should know

 Looking for business partnersYou Are Ready To Make Your Next Million
You have a great idea for a new business, an invention, an iPhone app, or you are ready to create the next Internet. Now all you need is a partner, or maybe even partners*, to bring your vision to life. How should you go about looking? How can you lower the risk of choosing poorly?
(*Check out this blog on the 4 crucial roles in a start up.

Clarity Improves the Odds of Finding the Right Partner
There are many issues to consider when deciding whom to work with. You have to consider skill sets, experience, availability and ambition. You also must consider the all-important issue of temperament. Someone who has the first four qualifications but lacks the ability to get along and work without undue conflict with others will result in a dismal and often costly counterproductive situation.

One way to learn about choosing partners is from the mistakes of others.  I am currently collecting anecdotal summaries and reports on this topic from those who have experienced the phenomenon and I strongly recommend you do the same. Social science also has much to say about this. Some of the existing research tells us that:

  • Partnerships are not a soft option but hard work;
  • Partnerships take time to develop;
  • Partnerships must be realistic and aim for what can be achieved, not be set up to fail by being too ambitious;
  • Partnerships can, if successful, achieve more than individual agencies working alone.
    (How to create successful partnerships—a review of the literature, Wildridge, Childs, Cawthra, Madge; Health Information & Libraries Journal, 2004)

Among some of my findings on the nature of why partnerships fail  is that people mistake partnerships as something that will make their lives easier. The reality is, that most of the time, partnerships make life harder and the most compelling reason to add such a burden to one’s life is because the two parties (or more) can create something together that they could not create alone. Having clarity about the value of that potential creation is necessary for overcoming the added difficulty of the partnership. 

Allow Patience to Temper Enthusiasm
Many partnerships have begun on the best of intentions based on apparent compatibility among associates and then somehow degraded into conflict and discontent.

One clue is in the concept of “apparent compatibility’. Sometimes this apparent compatibility is actually the product of your enthusiasm. Enthusiasm can mask potential flaws in prospective partners and associates. This also happens in romantic relationships when the initial chemistry fails to reveal psychological differences between partners. In both situations the heady hopes that this person is “the one” clouds your ability to discern.

Sometimes excitement about an idea makes you feel desperate to find someone with whom you can develop the idea further. You may meet someone who seems perfect because of his or her talent or experience but this is where you must learn to exercise patience. Ask yourself how you really feel about this person. If they did have the expertise or resource that is exciting you, consider whether you would want them as a friend? Would you want to spend a lot of time with them? Get the opinion of others who know you and who may have an easier time being objective.

Natural Language Sessions and the Transcript Solution
Dorene Lehavi, Ph.D. (a principal of Next Level Business and Professional Coaching) has talked about the negative impacts of money problems, partners with control issues, and conflict due to changing vision. (http://successfulbusinesspartnership.blogspot.com/)

Part of what contributes to future conflict is the optimism and enthusiasm of a new venture. Filled with hope and aspiration, cofounders, new partners, closely involved investors and principal stakeholders layout a blueprint for the future; one made of projections, business plans, corporate bylaws, shareholder agreements, etc.…  In this prospect filled process, difficult and potentially painful questions go unanswered.

Taking the time to sit together and answer questions that the Atman Approach provides can go a long way to reducing future pain and even untimely death to a viable project. The Atman Approach uses automated (or when possible live) facilitation through questionnaires. Often the process can seem almost like a therapy session. It is not. It is, however, a vital means of uncovering unseen emotional hazards early on and making provisions for them.

Money is usually the biggest cause of future conflict. So in the Natural Language Session we give that issue the most attention. For example the questionnaire takes future partners through a number of scenarios to develop a clear strategy for overcoming such situations.

The process uses natural or conversational language. The whole session is recorded and a transcript is produced. This transcript is then delivered to the attorney for the business entity and a legal document, partner agreement; additions to bylaws, etc.… are drafted. This turns the frank and open-hearted discussion into a far more mature legal framework for the venture. This type of preemptive work has the potential to save money and cut the likelihood of future heartache.

Reminders

  • While part of the issue is choosing well a more significant part to building successful partnership is in the execution of the relationship
  • Refining intuition is possible and when combined with hard data can make you a better judge of character. (Face reading and empathy can help with this.)
  • Seeing people as conscious beings who are struggling due to a misplaced sense of self provides a new platform for understanding emotions and motivational needs
  • Partnerships require resilience and adaptive expectations
  • Pick partners that you like. Are they someone you want to do social things with?
  • Learn more about how face reading can make you a better judge of future partners and employees here.

The 4 crucial roles in a startup

Building your company right – the first time

If you are starting a new company one of the first issues you must face is who will do what? And, what is my role going to be?

Most startup and entrepreneurial pundits list three key roles in the development of a great new company:

Developer – Tech guru (in a media or service company this is the person responsible for creating amazing content or the product).

Designer – UX/AI guru; this is the person who makes you look great and makes the client interaction feel great. They handle all visual, auditory, and emotional interfacing with the clients and other stakeholders; they are responsible for product development and management.

Distributer – Marketing guru; this is the brain behind getting your product or service to the public

What’s often missing from this list is the essential fourth column of support:

Director – the start-up CEO or People guru(description below)

The roles can be loosely mapped to my Management 3.o model of personalities in the workplace (paper available by request). In this model a balanced organizational body requires a:

Doer  (usually a developer, but could also be a designer and/or distributor).

Doers are task agents and finishers who are detailed and disciplined

Social/Seller (the deal maker – sales person).

This is often the distributer (but that doesn’t mean that the developer, designer or even director couldn’t fill this role). The social seller connects people and objects together and is: convivial, open, sharing, communicative, and moves things forward.

Brilliant Bureaucrat (biz dev, and people wrangling; definitely the role for the director).

The brilliant bureaucrat is a rational thinker, analyzes, understands politics and warfare, organizes, plans, and protects.

Visionary (can be any of the previous roles ie. developer/designer/director or be the chairperson, shepherd, holder of the vision, etc… ).

A visionary is the shaper, originator and creative genius; they are intensely curious, risk takers, and highly intelligent.

Remember  the four parts of a balanced organizational body roles can be filled in a number of ways, (the mapping doesn’t have to be one to one if you have people who can fill more than one role).

The importance of a director

As stated above the missing link to a balanced organizational body is often the director. Assuming your developer/designer team is somehow covering Doer and Visionary and your marketing person is covering Social/Seller, then who is your Brilliant Bureaucrat?

Sticking with the alliterations listed above you would be missing a director of operations; a start-up CEO – Your People Guru. It is important to remember that the start-up CEO or ‘early stage CEO’ is different from the second stage or ‘growth stage CEO’. (See my article on The 68 Responsibilities of a CEO.)

In a small company the early stage CEO is:

  • the operations officer ie. designing and developing business operations or the business method – that which produces value for clients and investors
  • responsible for business development ie. developing new opportunities attracting new clients, penetrating new markets
  • senior project manager ie. bridging the gap between projects [ideas] and business operations, and
  • Human resource manager  ie. overseeing recruitment and managing personalities as the company ramps up

He/she is all of the above rolled into one personality designed from the ground up to support all the other members of the team and to help manage the expansion of both staff and clients. But in a startup this role needs to be much more that a good people wrangler, you need a smart business developer.

In the words of serial entrepreneur and VC Mark Suster, “who else is going to get out there and close your big biz dev deals with you? Who’s going to help you with improving your marketing / positioning to become a clear platform category leader like Twilio? A few key people really can make a huge difference…. The reason you’re not getting to the next level is that you’re not prioritizing the precise thing that could take you to the next level. I would say recruiting at least one superstar would be your priorities 1, 2 & 3.”

According to James W. Breyer, superstar VC, and multiple board member (including Facebook),  “Skills, passion, intense curiosity and extremely high IQ are more important,” when asked about the importance of age in an article about start-up CEO’s. (WSJ 010712)

So when you look around at your team, do you have a superstar in each of the 4 columns of support (developer, designer, distributor, director)? Do you have each part of a balanced and functional organizational body (visionary, social seller, doer, brilliant bureaucrat)?

Remember this doesn’t necessarily mean that an individual fills each crucial role. If you are lucky enough to have someone on your team (maybe you?) that can fill two roles that’s awesome. If you have somebody on a team that can fill three roles, that’s Steve Jobs. If you have somebody that can fill all four roles you wouldn’t be reading this blog you’d be inventing the next Internet.

Unfortunately this role of a Brilliant Bureaucrat is often overlooked. What you should be looking for is someone who gets business but also understands the dynamic of all the other roles. you want someone who has a strong MBA mind but is not insulated by an MBA mind set. They need to be able to see the big picture of the vision holders and they need the discipline of a Doer.

How to find the right director of operations

But to attract a Brilliant Bureaucrat you have to speak their language. Don’t come at them with all the sizzle of your dreams; bring them numbers, hard facts, and something that looks like a business plan. Remember that to build a holistic and balanced team you will need members with different personalities. Learn the language and communication styles of those personalities that differ from you.

Another valuable tool you can use in building healthy relationships with future partners is using natural language agreements. This is a model I have designed that uses guided or facilitated sessions that create very thorough dialogs around many of the difficult questions facing partners. These sessions are transcribed and then transposed by a legal representative into a contract or letter of agreement.

Even if you have a great idea you are going to be limited or propelled by your team. It should be your priority to get the right people on the bus. Ask yourself again and again, “do I feel amazing about my team?” If the answer isn’t yes, you need to slow down and regroup. If you are unsure about a possible member use the natural language session as a away to uncover potential conflicts or unspoken concerns. Questioning your team and each person’s fit early on is uncomfortable. This is why it rarely gets done. Unfortunately, putting off a potential disconnect or a personality problem in the near term just leads to painful and expensive adjustments later on. Better to face the difficult questions now.

What is my role going to be?

Be sure you have asked this of yourself after taking a close look at both your personality and the personality of the others on your team.

Assess your team and make sure you have somebody supporting you in all the roles your business requires. And don’t be afraid to cut losses early, if you need to pass on a potentially problematic partner, do it. Don’t hang on to somebody because they are all you’ve got and you don’t know if you will find somebody. The ability to keep looking is a risk and risks are what leaders have to take in order to succeed.

How to hack a management system [brief talk]

[A 5 minute talk given at LA Hackers on April 23, 2011 at Coloft]

My name is Atma

I am an industrial psychologist

That’s kind of like a project manager on academic steroids

I specialize in the psychology of organizations and am currently working on my PhD in this topic

Part of the power of organizational psychology is that it leverages emotional energy.

Emotional energy comes from human desire, those things you want deeply or strongly, and it is a pervasive phenomenon.

Put another way I traffic in disruptive ideas that can make people better, higher functioning, and happier

I do this by focusing on changes in the work environment rather than singling out the individual

Better environments create better humans; better humans create a better society

I believe we can create a better world by changing the way we interact in daily life.

My goal is to teach whoever is ready to re-engineer their business, startup, or organization.

The suite of solutions I work with can be used to make any business or team more effective (consequently more profitable)

Some of the tools in this suite include:

  1. Screening partners, and hires with face reading and other cutting edge profiling techniques including clique psychology
  2. Wiring in innovation as a cultural behavior
  3. Game theory applications – tapping into mutualistic dynamics
  4. Training for charisma, confidence, and presentation skills
  5. Human centric design based on my model of generative grammar in organizations
  6. Hacking your management system
  7. The role of discipline in forging leaders
  8. Training to be comfortable and confident in any social situation
  9. Repurposing stress – training to thrive amidst chaos
  10. Super Group Networks
  11. XY cluster companies – a new  type of agglomeration
  12. Changing the communication model,

Here is a simple example of one way to hack a management system…

To make a meaningful change in the way an organization functions you need to figure out what is the generative grammar of that business or group. It’s like understanding the nature of code at the deepest structural level in a massive program written 30 or 40 years ago. You can similarly assume that your work environment is like an antiquated system riddled with legacy code. Only instead of the byzantine application of a formal language you are dealing with emotional needs, cultural expectations, societal mores, all operating in an invisible and impossibly complex array.

But if you can change the underlying grammar or code you change the way humans behave. This is partly because humans have enormous plasticity or capacity to adapt.

For example say we all worked together and somebody came in and said I will pay each of you a significant bonus for every month you show a demonstrable positive change in your health stats. Now I know from previous studies about how many of you would take advantage of that offer. Often it would be those of you who need it the least.

But let’s say I came in and said I will pay each of you the same bonus for the improvements shown by a randomly assigned coworker, as opposed to your own improvements (which would be tied to someone else’s bonus.)

What kind of shift do you imagine would occur in the way we all interact? Suddenly I have a vested interest in your well being. I will be paying attention to what you eat, encouraging you to be more active, maybe invite you to my gym 3 times a week. And you might be inclined to respond because you are equally concerned with getting your assignee on the right track.

So you see in making one simple adjustment I have altered the generative grammar of our environment and consequently we are all behaving differently.

I am currently involved in a private research project, where I come into small businesses and observe and collect data on the organizational dynamics. It’s free to the company and I always share my findings with them, which is always eye-opening and instructive. If you know any companies that would like to apply for participation please let me know.

My contact information is on the handout I have provided.

Thank you