Over the holiday break, I finished up Daniel Kahneman’s new and much-praised book Thinking, Fast and Slow. I consider it quite an achievement, and by that I mean both the book itself (a deep, personal, and introspective look back at the career of one of the most important psychologists of our time) and my actually reading it (the book weighs in at almost 500 very dense pages).
One of the many interesting things about Dr. Kahneman is that, as a psychologist, he actually won his Nobel prize in economics. If you are interested in learning more about how that happened, go here.
Over the last few months, Kahneman’s book has been sitting near the new Jim Collins book Great by Choice in the rarefied air of Amazon.com’s top 100 books list (I reviewed Great by Choice a few months back here). So I thought it was interesting that Kahneman challenged Jim Collins and his book Built to Last in Chapter 19. It was a pointed attack not just on Collins but the entire genre of success story-inspired business books.
Since I spend quite a bit of time reading these sorts of books, I was really interested in his viewpoint. I mean, have I been wasting time reading that I could just as usefully spent watching reruns of Tosh.O or Arrested Development on TV? Is there real value in studying successful businesses and leaders or is it just an illusion?
Here’s what Kahneman says:
“The basic message of Built to Last and other similar books is that good managerial practices can be identified and that good practices will be rewarded by good results. Both messages are overstated. The comparison of firms that have been more or less successful is to a significant extent a comparison between firms that have been more or less lucky. Knowing the importance of luck, you should be particularly suspicious when highly consistent patterns emerge from the comparison of successful and less successful firms. In the presence of randomness, regular patterns can only be mirages.”
Kahneman cites Philip Rosenzweig’s book The Halo Effect (which is now on my reading list) and quickly jumps to the punchline of that book:
“[Rosenzweig] concludes that stories of success and failure consistently exaggerate the impact of leadership style and management practices on firm outcomes, and thus their message is rarely useful.”
So are we to believe Kahneman and Rosenzweig? Is there really no value in studying the leadership and management practices of great companies?
Even after reading the whole book Thinking, Fast and Slow and understanding the psychological principles that trick my brain into applying great importance to these sorts of success stories, I still find the conclusion a hard one to accept. And then Kahneman throws the knockout punch:
“Stories of how businesses rise and fall strike a chord with readers by offering what the human mind needs: a simple message of triumph and failure that identifies clear causes and ignores the determinative power of luck and the inevitability of regression. These stories induce and maintain an illusion of understanding, imparting lessons of little enduring value to readers who are all too eager to believe them.”
Okay, I get it. Kahneman views me as a sucker. And who am I to argue with a Nobel Prize-winning psychologist?
But I just can’t help it. I think there is plenty that we can learn from the lessons of innovative businesses like those that Collins profiles in Built to Last. Kahneman may be right that these books suffer from an illusion of academic rigor that breaks down under close study. And yes, they probably need a disclaimer (“The author makes no promise or guarantee that if you follow the principles outlined in this book you will become Google overnight. Individual results may vary.”).
But what these books lack in academic rigor they make up for in one simple area: they inspire people. To not settle for what they see today. To try something new. To learn. To grow. To believe.
They create the possibility of hope. “Others have done it. I could too!”
So in that sense, Kahneman’s critique is somewhat akin to an adult telling a three-year old child that there is no Santa Claus. My view? The analysis is technically correct, but emotionally bankrupt.
Where success story business books fail the analytical brain, they often are just what the emotional brain needs.
So I don’t know about you, but I’m going to keep on reading business books. By constantly refueling my head with new ideas, I’ll always have something to learn and try. I’ll continue to be inspired by authors like Jim Collins, by companies and leaders who have seen great success, and I’ll suspend my academic doubts in the hope of learning new lessons that might just work.
I’d love to hear what you think. If you believe Kahneman’s critique of Collins and the genre is on the money, or if you believe instead that there is still value in sharing and learning from business success stories, let me know in the comments section below.
In October 1969, when experts at the US Department of Defense Advanced Research Projects Agency (DARPA) connected the first two nodes of what has now become the Internet, they probably weren’t considering the ramifications of their actions on future organizational cultures. But while these DARPA folks likely wouldn’t have considered themselves management innovators, the Internet they created has rocked the traditional management science to its core.
Sure, organizations have embraced the technological changes that have come with the Internet (or they have not, and have since disappeared). But fewer organizations have truly embraced or even begun to understand the cultural changes that the Internet has ushered in.
We may live in 2011, but given how many of our organizations are structured, we might just as well be working in 1911.
Fundamentally, traditional management and the Internet are at odds over one simple thing:
Traditional management is designed for control. The Internet is designed for freedom.
That’s why the principles used to manage assembly line workers in 1911 are often rejected in 2011 by a new generation of employees who have grown up enveloped in the freedom of the Internet. To them, the old management model is an anachronism; a legacy system held onto by an aging generation of leaders who are unwilling to give up control because they see freedom as a threat.
In volunteer-based community settings, efforts to exert control are often poisonous. Volunteers will simply quit before being forced to do something they don’t believe in or value. Yet in traditional organizational settings, control—over people, resources, and information—is a fundamental lever.
If you’d like to see your organization become more aligned with the spirit of the Internet than the legacy of traditional management, consider looking for places to replace control-based practices with freedom-based practices.
If you manage people, start thinking of your staff members as volunteers in a community. By giving them more freedom to choose things they’d like to work on while giving them additional say in their own futures, you stand a better chance of keeping them feeling like… well… paid volunteers.
When employees are forced to work on projects they haven’t chosen, and don’t believe in or value, they may not actually quit their jobs, but they will often quit in every other way—doing just enough to get by and keep their job safe, or in some cases even undermining the effort.
Often this is a fate worse than having them quit. They become organizational drones, complacent, indifferent, and dispassionate. They’ll stop contributing ideas because they think no one cares. They’ll stop giving full effort because they think it doesn’t matter.
Replacing control with freedom is a great way to inspire your employees to view themselves as volunteers, deeply engaged in achieving the organization’s goals, rather than drones or mercenaries, who seek only safety and a regular paycheck.
Moving from control to freedom is one of the most difficult transitions an organization (or even just a manager) can make. This transition requires much more than simply a good strategy for change—it requires a will to change. Those in charge—the very people who have the most to lose by giving up control—must make a decision that granting freedom is a strategic imperative. The competitive landscape is littered with the carcasses of formerly successful organizations whose management team did not know how—or didn’t have the will—to make the leap.
The strategic decision to change a control-based culture into a freedom-based culture is not one that leaders should take lightly, and it is not necessarily right for every organization in every situation. But in order to compete with companies born in the age of the Internet, employing the children of the Internet, and built in the spirit of the Internet, in the long term there may be few other options.
[This post originally appeared on opensource.com]
Last week, Google Senior Vice President of Product Management Jonathan Rosenberg resigned after almost 10 years at the firm. While the comings and goings of tech industry executives aren’t typically that interesting to me, I found this news fascinating for a couple of reasons.
First, Rosenberg says that one of the things he plans to do is write a book with ex-Google CEO (and current Executive Chairman) Eric Schmidt. The subject? According to an article in the Mercury News, they’ll be writing about “the values, rules and creation of Google’s management culture.”
Now that is a book I’d like to read. Google is in many ways an ideal case study of the open source way as applied to management practices, and, while many have written books about Google already (notably this one by Bernard Girard and this brand new one by Steven Levy), I’d love to see Schmidt and Rosenberg’s take (and I hope we can corral one of them for a webcast on opensource.com when the book comes out).
I’m especially interested in their view of how the existing Google culture changed (or didn’t change) during their tenure. Especially since it has been reported that Rosenberg’s top-down management style didn’t mesh well at first with the existing engineering-led culture.
But what I find to be the even more interesting question in the short term is, with Rosenberg leaving, who will be the new face of openness at Google?
When I hear people in the technology industry talk about the benefits of open source software, one of things they mention often is their belief that open source software “gets better faster” than traditional software (David Wheeler has done a nice job collecting many of the proof points around the benefits of open source software here). While the speed of innovation in open source is in part due to the power of Linus’s Law (“Given enough eyes, all bugs are shallow”), I believe it also has a lot to do with the way open source projects are managed.
Many of the characteristics of this open source management style apply well beyond making software, and I’m always looking for examples showcasing this in action. A few weeks ago, I wrote briefly about the story in Malcolm Gladwell’s book Blink about (now retired) US General Paul Van Riper.
Gladwell tells the story of how, in an enormous military war game called the Millennium Challenge in 2002, Van Riper took command of the Red Team, playing the role of a rogue commander who broke away from the government of his Persian Gulf country and threatened US forces (the Blue Team). Rather than following standard military management protocol, Van Riper managed his team according to a philosophy he called “in command and out of control.” From the book:
By that, I mean that the overall guidance and the intent were provided by me and the senior leadership, but the forces in the field wouldn’t depend on intricate orders coming from the top. They were to use their own initiative and be innovative as they went forward.
Over the past few months, I’ve started moonlighting as a contributor on the Management Innovation Exchange (MIX), which we’ve featured regularly on opensource.com. My posts on the MIX focus on how to enable communities of passion in and around organizations.
A few months ago, the MIX announced a new contest, the Human Capital M-Prize, which is looking for the best ideas on how to unleash passion in our organizations.
Since this particular challenge is right in my stomping ground on the MIX, and because many people who regularly read and contribute to opensource.com probably know better how to enable communities of passion than almost anyone else in the world, I thought I should highlight the contest in the hopes that some of you might enter.
Details? From the MIX website:
The MIX and HCI are looking for the boldest thinking, most powerfully-developed vision, and the most cleverly-designed experiments for unleashing passion in our organizations. What is your bold new idea or radical solution to the lack of engagement and passion in our workforce? What game-changing story or hack can transform employees everywhere into more engaged, motivated and productive contributors?
If you have a story or hack you think might fit, go here to learn more or enter the contest.
The deadline for entries is January 20th—only about two weeks away.
The grand prize winner will get a chance to present their story or hack to a global audience at the HCI Human Capital Summit in Atlanta in March, and there are other interesting prizes as well. So if this sounds compelling to you, get on over to the MIX and submit your entry.
Make our community of passion at opensource.com proud and let’s show these future-of-management-types that we open source folks know a thing or two about building community.
Last week I received a heads up about a new web application launching today from a company called BetterMeans with an impressive goal: to build the infrastructure (processes, technology, governance, etc.) to make an open organizational structure like we talk about here on opensouce.com a reality.
From their website:
BetterMeans.com is a web platform where people can start and run companies in a new decentralized way.
– Teams self-form, self-organize, and self-manage using an issue-tracking tool
– There is no management class, only natural hierarchies.
– Leadership emerges organically by users earning other users’ confidence
– Compensation is based on contribution
– Strategy and ideas are crowd-sourced
– There’s full accountability and transparency. Relationships are built on trust.
– Ownership is distributed
– Capital allocation and decision-making are decentralized
If a traditional company was a network architecture, it would be client-server.
We’re building a platform for peer-to-peer companies that are more agile, resilient, and innovative.
The video below explains what they are doing and why.
[Read the rest of this post on opensource.com]
My first blog post went up today on the Management Innovation Exchange (MIX).
The MIX is the brainchild of Gary Hamel, author of one of my favorite management books of the last 10 years, The Future of Management, and the guy who the Wall Street Journal ranked as the most influential business thinker in the world.
The thesis of the MIX is that management itself has been a fantastic innovation— the “technology of human accomplishment” to use Hamel’s words. Yet for all management has done to improve the world we live in, it is technology invented over 100 years ago, and old skool management practices are becoming increasingly outdated in the modern world (Gary Hamel explains this all better than I do, watch his short introduction to the MIX below).
The MIX is an open, collaborative effort to reinvent management built around 25 management “moonshots” (see the full list here). In addition to Hamel, there are some amazing folks contributing to the site, including famous visionaries like Terri Kelly of W.L. Gore & Associates and John Mackey of Whole Foods.
But perhaps the most exciting part of the site for me has been to see that it is built as a meritocracy of ideas, where anyone can add a story, a hack, or a barrier. And many do. I’ve seen some amazing ideas as I’ve begun to participate in the MIX over the last few months and can’t wait to point some of them out in my role as a Moonshot Guide.
In particular, I’ll be tackling the moonshot “Enable communities of passion” building on my experiences at Red Hat and here at New Kind as we continue to build a company around the concept of being community catalysts.
So if you have ideas for things you think I should cover, drop me a line, I’d love to hear them.
On occasion I get the opportunity to speak publicly about some of the things I’ve learned over the years applying the open source way in organizations.
In almost every case, when the Q&A session arrives, I’m greeted with at least one question from a poor soul who loves the idea of applying the open source way to management and culture, but doesn’t think it would ever work in his/her specific organization. Usually the comment is accompanied by some horror story about an evil co-worker, hierarchical boss, crappy HR policy, or some other impediment that would cause the open source way to fail.
And the sad truth? These folks are probably right. Many of these concepts wouldn’t work in their organizations.
So why do I waste my time talking about things that may not work in many organizations? Two reasons:
2) the wind
Let me be honest. I’ve never run into a perfect model of the open source way in practice (if you have, please point it out to me!).
There are clearly some organizations that have figured out how to build open source principles into their DNA better than others. Wikipedia is a good example. The Fedora Project is another. Still, my guess is the people who are deeply involved in those projects on a daily basis would probably be able to show you some warts, places where old-skool practices are still evident.
So why not be more realistic? Why not give up and accept that some of these principles work better in theory than they do in practice?
Simple: I have hope.
What gives me hope? Two things. First, I have seen first-hand many examples of great things that happen when open source principles are applied within organizations. From the collaboratively-designed mission of Red Hat to the work of Fedora marketing team, I’ve personally witnessed the power of open source principles in action.
Second, I believe in the pursuit of perfection. Why not aspire to create better companies than we have today? What do we have to lose? I don’t know that we will ever see a perfect open source company. But by pursuing perfection, we are likely to get a heck of a lot closer than where we are today.
[Read the rest of this post on opensource.com]
Maybe some day we’ll look back on the role of the manager in our organizations and laugh.
Such a quaint trend. Kind of like having The Clapper in every room of your house, or wearing multiple Swatch watches, or working out to Richard Simmons videos. Each seemed really helpful at the time, but looking back, we kind of wonder what the heck we were thinking.
OK, I’m exaggerating. After all, the manager/employee trend has been going strong for 100 years or more. But are we seeing enormous changes in the role of managers on the horizon? Signs point to yes.
In some of the most forward-thinking businesses and in many projects being run the open source way, the traditional manager/employee relationship, which looks something like the image above, is being replaced with something much less formal and much more flexible.
I think the new model looks more like this:
[read the rest of this post on opensource.com]
I’ve been toying around with a new hypothesis. Here it is:
Formality in business is dying.
Now I am not talking about Blue Jeans Friday and Bring Your Pet to Work Day all of the sudden cropping up everywhere. I’ve seen very formally-run businesses where people showed up in jeans with their dogs or whatever. So much superficial informality.
What I’m talking about is a fundamental shift of business culture and management practices from formal to informal in many innovative companies. What do I mean? Let’s take a step back.
Here are two of the ways Merriam-Webster defines the word formal.
– relating to or involving the outward form, structure, relationships, or arrangement of elements rather than content
– having the appearance without the substance
That first definition of formality stands out for me as a perfect description of almost every formal business practice I have ever encountered. “Relating to or involving the outward form, structure, relationship of arrangement of elements rather than the content” (emphasis mine).
Organizational charts. Job titles. Performance reviews. Operational reviews. Strategic planning projects.
In your experience, do these things usually reflect the man-on-the-street reality of the business? Or are they an attempt to impose structure on things that do their best to defy it?
The irony is that, while most formal business practices are attempts to manage the complexity of business by defining structure, they usually fail miserably to capture the true complexity of business. They focus on the structure rather than the real content—and they usually don’t even get that right.
In my experience, most business practices that attempt to formalize structure are about as successful as attempts to construct buildings out of clouds. By the time we finish the plan, everything has already changed beyond recognition.
[Read the rest of this post on opensource.com]