Today I would like to follow up my last post on measurement by introducing you to two of my new friends Marty Goldberg and Todd VanNest. I have never met these guys, we have connected through LinkedIn and I have been lucky enough to have them comment or critique my perspectives. One of the cool things about the social network is, if you are open to it, you get really interesting and intelligent comments that may not agree with your perspective, but cause you to think. That is what these guys have done.
Todd VanNest
"I wouldn't be so quick to pooh on your friend Steve's perspective--you and he are not so different in viewpoint. I call the breakdown you highlight in org structure, measurement & reward the great curse of 100 Years of "Management Science." Of course, if we wallow in that and reward related behavior for years, it only serves to LIMIT what we can achieve through organizations and tends to make us extremely LAZY (if not outright neglectful) over time--Change this course and managing for optimal growth and profit DOES require heavy lifting"You are right Todd, Steve and I don't really disagree. It doesn't really matter what the cause of this superficial, knee jerk kind of management response, but without good metrics you are flying blind. What I am trying to do through this blog is to add my piece to the creation of the new management sciences.
Now that leads me to a very different comment coming from Marty...
Martin Goldberg
"First, I've been increasingly struck by the unreality of the commonly expressed view that 'if you can't measure it, it isn't real (or it isn't manageable).' What a silly--and, counter-productive, and simply wrong--concept if innovation is the aim. Clearly, all great breakthroughs may have milestones of a sort associated with them (the Manhattan project was a huge example of complex collective effort of sophisticated knowledge workers searching for something new and practical--and highly scientific and mathematical to boot), but "metrics" of the sort that people in organizations normally speak of would have been absurd--and in fact precluded the kind of expansive, creative thinking and interdisciplinary dialogue needed for the task. I'm inclined to see metrics as helpful for operational disciplines and activities, but not for truly innovative, inventive, or creative tasks. These require a certain freedom that belies metrics--certainly as customarily practiced--and what they seek to "reify."Can I both agree with Marty and at the same time disagree? God help me, I am becoming a politician. But at times like this it is always good to focus on real life cases. To do that I would like to spend a minute looking at the 3M corporation.
For those of who have been following my posts you will note that I have a strong admiration for former CEO of General Electric, Jack Welch. After Jeff Immelt won the top job, James McNerney who was I believe one of the 3 finalists, was quickly snatched up by 3M.
McNerney was the first outsider to lead the insular St. Paul (Minn.) company in its 100-year history. He had barely stepped off the plane before he began driving the kind of change GE and Jack Welch had become famous for. McNerney axed 8,000 workers (about 11% of the workforce), intensified the performance-review process, and tightened the purse strings at a company that had become a profligate spender. He also imported GE's vaunted Six Sigma program—a series of management techniques designed to decrease production defects and increase efficiency.
McNerney jolted 3M's moribund stock back to life and won accolades for bringing discipline to an organization that had become unwieldy, erratic, and sluggish. Then, four and a half years after arriving, McNerney abruptly left for a bigger opportunity, the top job at Boeing.
Now his successors face a challenging question: whether the relentless emphasis on efficiency had made 3M a less creative company. That's a vitally important issue for a company whose very identity is built on innovation. 3M was touted in the 1994 best-seller Built to Last by Jim Collins and Jerry I. Porras as the compay capable of sustained growth.
However, it has been a long time since the debut of 3M's last game-changing technology: the multilayered optical films that coat liquid-crystal display screens. At the company that has always prided itself on drawing at least one-third of sales from products released in the past five years, today that fraction has slipped to only one-quarter.
"Invention is by its very nature a disorderly process," says current CEO George Buckley, who has dialed back many of McNerney's initiatives. "You can't put a Six Sigma process into that area and say, well, I'm getting behind on invention, so I'm going to schedule myself for three good ideas on Wednesday and two on Friday. That's not how creativity works." This of course is Marty's point.
BUT, I think this presents a different problem. It is not a surprise that Six Sigma negatively impacted innovation. This reminds me of the old adage that if the only tool you have is a hammer, everything looks like a nail. The issue isn't to say measurement doesn't work.
The problem is how do you drive corporate value by measuring and driving innovation, which of course is Todd's point. One thing I can say for sure is that while Mr. Buckley has removed the ineffective measures, he and his management team are struggling with the development of a new set of performance metrics that will drive the value of the company.
The point of this is value creation happens many different ways and for an organization to survive it has to create more value than it loses... a very simple equation. Since value creation changes, look at IBM, the issue becomes how do you continuously create value.
Let me tell you about another friend of mine I just spoke to today. His name is Gautam Mahajan and he lives near New Delhi. If you get a chance read his book Customer Value Investment. He had an interesting perspective.
"We send all these bright young people to schools to become the next generation of manaagers and when they graduate we give them a Masters Degree in Business Administration. Administration? What we need to do is create a new course on creating business value and give these people a Masters of Value Creation for Business".I am a great admirer of Sun-Tzu the great Chinese General, who is considered one of the greatest strategic minds of all time. His book is a primer in all military colleagues and most graduate schools for the development of strategy. (Given some recent wars, you have to wonder if the current Generals slept through this part of the curriculum.)
It seems that at this point of my journey it might be appropriate to use some of his enlightenment. To Sun-Tzu, the foundation of any strategy comes from information...you must know both the enemy as well as your own strengths, weaknesses, desires, timeframes and vision. He used spies to evaluate his enemy and he created a formal structure to provide him with information on his own capabilities. He also imposed a level of discipline that most modern organizations would envy.
Sun – Tzu…
- If you know the enemy and know yourself, you need not fear the result of a hundred battles.
- If you know yourself but not the enemy, for every victory gained you will also suffer a defeat.
- If you know neither the enemy nor yourself, you will succumb in every battle.
The Art of The Bull's Eye is a metaphor for continuous learning in our quest to achieve perfection.
To achieve a bull's eye requires the individual mastery of...
- both the perspectives of art and science;
- finesse and strength;
- the capability to both adapt to various conditions and yet be extremely decisive;
- the practical applications of mathematics through the understanding of wind, barometric pressure and heat;
- the discipline to keep refining the process and a feedback mechanism to drive the refinements.
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