There’s always a Plan B

The Business Coach role at Family by Family requires me to find what Steve Blank talks about as a startup: a temporary organization in search of a scalable and repeatable business model.

This should then translate into Execution on a large scale.

And here are his basic lessons:

Great entrepreneurs don’t just have a Plan B, they have Plans B through 

Lessons Learned

  • A startup is initially about the search for a repeatable and scalable business model
  • Most of the time your hypotheses about Plan A, B and C are wrong
  • Searching requires agility, tenacity, resilience, curiosity, opportunism and pattern recognition
  • Execution requires a different set of skills. At times it means bringing an operating executive
  • Operating executives excel at focussed execution
  • World-class technology CEO’s learned how to combine Searching andExecution (Gates, Jobs, Ellison, Bezos, Page, et al)

Speed, Tempo and Decision Making

Steve Blank is a great person to read if you are interested in start ups and working with new companies in order to develop your customer side of the business.

Here, he talks about the kinds of decisions and why speed is important.

Decision Making Heuristics for the Startup CEO

The heuristic I gave my friend was to think of decisions of having two states: those that are reversible and those that are irreversible. An example of a reversible decision could be adding a product feature, a new algorithm in the code, targeting a specific set of customers, etc. If the decision was a bad call you can unwind it in a reasonable period of time. An irreversible decision is firing an employee, launching your product, a five-year lease for an expensive new building, etc. These are usually difficult or impossible to reverse.

My advice was to start a policy of making reversible decisions before anyone left his office or before a meeting ended. In a startup it doesn’t matter if you’re 100% right 100% of the time. What matters is having forward momentum and a tight fact-based feedback loop (i.e. Customer Development) to help you quickly recognize and reverse any incorrect decisions. That’s why startups are agile. By the time a big company gets the committee to organize the subcommittee to pick a meeting date, your startup could have made 20 decisions, reversed five of them and implemented the fifteen that worked.

Tempo = Speed Consistently Over Time

Once you learn how to make decisions quickly you’re not done.  Startups that are agile have mastered one other trick – and that’s Tempo – the ability to make quick decisions consistently over extended periods of time.  Not just for the CEO or the exec staff, but for the entire company.  For a startup Speed and Tempo need to be an integral part of your corporate DNA.

Great startups have a tempo of 10x a large company.

The improvement Kata

 

Mike Rother, the author of Toyota Kata on Toyota’s implementation and improvement methodology. This is the book which made me understand how the PDCA of Deming connects with the Agile/Scrum techniques and how in the end this is the productivity answer to Drucker’s knowledge worker’s productivity challenge.

On the Improvement Kata:

In general, one can say that what is given to employees at Toyota is not solutions but an effective way of developing solutions. At many other companies, it’s the other way around. We decide via a return-on-investment calculation whether to pursue a goal, and make a plan for how we believe we will reach it. The plan lays out steps, and responsibility for those steps is assigned to individuals. People concentrate on the steps assigned to them.

But when we face a challenge, large or small, this approach is a dead end, because it involves deciding and planning based on existing knowledge. How can we know at the beginning what the steps will be that will best bring us to the desired destination? How can we predefine solutions when we do not know what we will encounter after the first few steps are taken? And if that’s true, how can we calculate in advance what the costs will be? Yet we do have time and budget constraints. So there is a paradox, and the improvement kata is designed to deal with that.

To cope with this dilemma and to mobilize the ingenuity of its employees, Toyota teaches an iterative approach. Although Toyota does plan in detail, the plan is seen more as a hypothesis than a decree. Toyota assumes that the path to a goal is largely in the dark, and that there are several as-yet-unknown ways to achieve the goal. Imagine you are at the beginning of a path holding a flashlight, but the light only illuminates part of the trail. When you take a step forward, you may spot things—an obstacle or an idea for a solution—that were not apparent back when you were calculating and planning. Toyota uses what it learns from those discoveries to take steps, if necessary, other than those listed in the plan to reach the goal in a creative manner within the quality, cost, and time parameters.

Drucker on Knowledge Workers

Peter Drucker has been the seminal person in identifying the most important trends that will have the biggest impact on the world. From creating the field of management to drilling home the importance of business tools for the social sector and to identifying that the biggest challenge for the 21st century is the productivity of the knowledge worker.

The one thing that was not clear from Drucker’s writing was how to do it. I think that the whole Agile/Scrum methodology is geared towards knowledge workers (yes, software developers are another kind of knowledge workers) and the Radical management stuff promoted by Steve Denning with a focus on client delight fits very well.

So what does Drucker actually say?

Drucker (1999, p142) describes six major factors determining knowledge worker productivity.

1. “Knowledge worker productivity demands that we ask the question: “What is the task?”

2. It demands that we impose the responsibility for their productivity on the individual knowledge workers themselves. Knowledge workers have to manage themselves. They have to have autonomy.

3. Continuing innovation has to be part of the work, the task and the responsibility of knowledge workers.

4. Knowledge work requires continuous learning on the part of the knowledge worker, but equally continuous teaching on the part of the knowledge worker.

5. Productivity of the knowledge worker is not – at least not primarily – a matter of the quantity of output. Quality is at least as important.

6. Finally, knowledge worker productivity requires that the knowledge worker is both seen and treated as an ‘asset’ rather than a ‘cost’. It requires that knowledge workers want to work for the organization in preference to all other opportunities.”

And each of these aspects are covered through the agile methodology. What is the task? That is exactly what is suggested is clarified at the start of each iteration through user stories etc from the client. Drucker talks about autonomy and this is what is achieved through the use of self-organising teams which decide what they can do in a iteration and how they want to do it. The self-organising team along with sprint planning and retrospectives create the right environment for reflection and continuous innovation.

The absolute need for running a self-organising team is to realise the importance of these individuals and their brain power and that it is the biggest asset of the organisation. How we tap into that will be the key. Focussing the whole aspect of creation on client delight at every iteration makes sure that quality is the name of the game.

In a nutshell,

The principles of Radical Managementsm are: 

- A shift in goal from making money for shareholders to delighting customers through continuous innovation. 
- A shift in the role of managers from controlling individuals to enabling self-organizing teams. 
- A shift in the way work is coordinated from bureaucracy to dynamic linking. 
- A shift in values from a preoccupation with efficiency to a broader set of values that will foster continuous innovation. 
- A shift in communications from top-down commands to horizontal communications.

 

Ofcourse, as a Knowledge worker it is each and everybody’s responsibility to keep learning and growing. And here is where Drucker believes that teaching is the best way to learn something.

Drucker also adds that “…to be successful, the knowledge work must be focused as part of a system, on the needs of the customer and business strategy.” This is clearly achieved through the focus of the ScrumMaster and Product Owner on the needs that satisfy the client the most. This is the pull aspect of work rather than push from a lean thinking point of view.

The stuff on aligning for business strategy is a much larger point and is the role of senior management to make sure that all projects are aligned with the larger business strategy.

Drucker points out “that many knowledge workers have many activities beyond their core task which take up their time and remove their concentration, thereby impacting productivity. He strongly advocates concentration of effort, with other tasks minimised or delegated.” This has been clearly suggested in various ways in the agile literature through the use of Kanban techniques or the need for no interference in a sprint etc.

Working at Families SA I have realised that social work, residential work, psychologists etc are nothing but knowledge work. It is absolutely the same regarding TACSI. I have never seen this work being identified as such. Once we do that then it becomes clear what the next step is. It is to start creating the management structures, incentives and work environment that is suitable for knowledge workers.

What is quite fascinating for me is the clear alignment of the agile methodology along with the explanations of Steve Denning and their answer to Drucker’s questions. This is exciting.

Drucker puts a lot of responsibility on the knowledge worker to manage his time, to learn continuously, to learn how to work in a team and to determine what makes them tick. It is a lot of responsibility and Drucker has some great answers for that. That will be a another post.

Innovation and small companies

Big companies are much more dogmatic about their approaches. A small company with less to lose has a better chance at building something new. It’s almost more likely that new solutions for problems come from smaller, newer companies.

— Joshua Schacter, creator of Delicious, speaking to the NYT’s Jenna Wortham about the post-Yahoo prospects for the company, now that it’s been acquired by Steve Chen and Chad Hurley’s Avos

Delicious was my favourite bookmark company which brought in the tags revolution and Joshua built it from a small company to selling it to Yahoo for $30 million. And what did Yahoo do? Nothing.

For the economy as a whole (profit and the social sector alike) an important aspect to create innovation is by providing the environment for more entrepreneurship to flourish and then to create the opportunities for innovation to happen at large organisations.

This year is going to be interesting as I will be working on both the versions through Families SA and TACSI.

I am currently reading the Leader’s guide to Radical Management which is showing a way to create innovative teams in large and knowledge based organisations. A big part of that idea is Agile or Scrum management methodology. I am attending the Certified ScrumMaster program through the Scrum Alliance in Sydney this week to understand its implementation better. I have a really strong feeling that Scrum/Agile type thinking will be the key for both of my roles.

 

 

 

Business Coach

I wrote a few days back about MBA and Social Change and discussed the idea of how we need all the four aspects of

ResourcesExpertisePassionsContribution.

to create successful change.

At What Matters website from McKinsey there is the same discussion with some vibrant comments.

Matthew Bishop writes:

Different skills are required at different stages along the way—from the single-minded determination of the entrepreneur with an idea to the visionary and organizational capacities of the CEO leading a large corporation. Those like Bill Gates who make it all the way from the garage to the corporate boardroom as the head of their firm are remarkably rare.

Contrast this with the social sector, where the praise and reward always seems to be focused on innovative new ideas rather than the boring challenge of taking these ideas to scale. Social entrepreneurs are rightly celebrated, but we should also celebrate the social bankers, social venture capitalists, social equity investors, and so on. This is why I’m excited by the influx of suited MBAs into the world of doing good. And why, more generally, I think that those who want social change need to embrace the language and methods of business.

This is exactly my new role as Business Coach for the Family by Family project in Adelaide. FbyF has been innovatively developed by The Australia Centre for Social Innovation or TACSI based here in Adelaide. They are one of the few people I know in Adelaide who understand the need for business tools and frameworks for social enterprises.

They have created a new model of supporting @risk families to go over the hurdles by being mentored by a Sharing family. My role is to make sure that in the next year we have an evaluation of the intermediate outcomes and long term impacts, test the viability of the business model, create systems for scaling and getting the project ready for a a greater impact across Australia and may be on day across the world.

I have been lucky enough to work in my current role at Families SA and work part-time at FbyF as a Business Coach. One of the first things that has changed for me is that I have started blogging again after a long hiatus and that is a good thing.

Check out this video on the 7PM project.

Family by Family on TV from TACSI on Vimeo.

California as a Design Problem > Projects > D:GP The Center for Design and Geopolitics

Quote

California is home to many of the world’s most inventive scientists, engineers, companies, studios, philosophers, entrepreneurs, writers, activists, artists, creative and technological talent, as well as an unparalleled diversity of natural and demographic resources. From the Spectacle to the Singularity, it could be said that California’s culture and economy invented the second half of the 20th century.

As globalization is driven by the continued emergence of sub-national, post-national and supra-national politics, some as small as a data-packet and others as large as an climatic system, California’s status as the richest non-Federal jurisdiction in the world, its complex national and international borders, it’s pivotal location among European, Latin and Asian economies, (as well as its exemplification of dysfunctional self-governance), makes it a critically important laboratory for redesign and redevelopment. If necessary restoration, revitalization and reinvention doesn’t happen in California, it might not happen at all.

via California as a Design Problem > Projects > D:GP The Center for Design and Geopolitics.

The United States of Design

Teddy Cruz likes architecture that tells a good story. When some teens wanted to build San Diegos first skate park in 1999, the police shut them down. So, says Cruz, “the teenagers organized and went through a complex process, gaining control of the site.” The result, Washington Street Skatepark, became a way to collectively rethink development. Cruz brings intelligent architecture to disadvantaged communities. “Im interested in the construction of community,” Cruz says. “How does one design the interface between people, programs, and spaces?” His breakthrough housing projects in downtrodden places, including several neighborhoods near the San Diego-Tijuana border, emphasize “the construction of synergies, allowing people to move to the next level in terms of jobs and forming communities.”

via The New Masters | Fast Company.

Acumen Fund: 10 years of patient capitalism

Acumen Fund was started 10 years back in 2011 as an investment model to fight poverty around the world. It is a great model to initiate social enterprises and social entrepreneurship around the world.

These are the ten things they have learnt in the last ten years. According to them in the last 10 years more and more organisations have come up in the “impact investing” sector and they are now about 1999 as of 2010.

So the lessons learned:

  1. Dignity is more important to the human spirit than wealth
  2. Neither grants nor markets alone will solve the problems of poverty
  3. Poverty is a description of someone’s economic situation, it does not describe who someone is
  4. We won’t succeed in the long term without cultivating local leaders, local money and strong communities
  5. Great people, every time, no exceptions
  6. Great technology alone is not the answer
  7. If failing is not an option, you have ruled out success as well
  8. Governments rarely invent solutions, but they can scale what works
  9. There is no currency like trust, and there are no shortcuts to earning it
  10. Patient capital investing is built upon a system of values; it is not a series of steps to be followed

Jacqueline Novogratz founded Acumen Fund and she has written about the background and growth of the sector in her book, The Blue Sweater.

From the Economist:

In “The Blue Sweater”, her recently published autobiography, she describes her past frustrations working in such pillars of finance and development as Chase Manhattan bank, the African Development Bank and the Rockefeller Foundation. She found them bureaucratic, distant and condescending to those they sought to help. So in 2001 she set up Acumen Fund, a “social venture capital” outfit, to promote what she calls “patient capitalism”. Acumen is an odd mix of charity and traditional investment fund. It takes donations from philanthropists in the usual fashion, but then invests them in a businesslike way, by lending to or taking stakes in firms. The recipients—private ventures aiming for profits—must serve the poor in a way that brings broader social benefits. Acumen goes to great lengths to measure those benefits, and thus the efficiency of its work.

Acumen’s charges are a diverse bunch. In India, Drishtee runs a network of internet kiosks in rural areas, while LifeSpring runs low-cost maternity hospitals. A to Z Textile Mills, a manufacturer of antimalarial bed nets, has grown to become one of Tanzania’s largest employers. Some ventures, including a Pakistani mortgage provider and an Indian pharmacy chain, have flopped. But many others manage to repay their loans (granted at below market rates) or generate dividends. Acumen reinvests its profits in other companies, thus stretching the initial donations further.

[...]

Ms Novogratz dismisses those such as Jeffrey Sachs, an influential economist, who think that the bottom billion are too poor to be treated as consumers, and should sometimes receive handouts instead. “When Jeff Sachs says every poor person should receive a free bed net, I agree—but in reality many end up not receiving one,” she says. “And I don’t live in a world of shoulds.”

 

 

 

MBA and Social Change

Charles Cameron asks a good question over at Social Edge:

What exactly is a social enterprise?
Is it a business? Is it a business, plus? Or is it something else entirely, something new, perhaps even something not yet defined?
The question we’re looking at this week echoes one that came up at a recent career development session at the Haas School of Business at the University of California, Berkeley.
The coach for that session made an interesting observation: that students in the liberal arts believe their careers should leverage their appetite for passion and contribution (to the world we live in, and the world our children will inherit) while MBA students believe in the importance of resources (read: dollars) and competences (read: expertise).
Two groups, two streams of students who will shortly be entering the workforce -and four significant considerations that motivate their career choices:
Resources. Expertise. Passions. Contribution.
There are some interesting discussion on the topic there but as an MBA and somebody interested in social change here is my take.
Passion is critical for personal satisfaction satisfaction and big success. I say big success because a lot of things can still be achieved in the world through hard work. However, in the start up world where you are creating something from an idea without many resources etc, passion is critical. A social enterprise is like a start up for me. In order to get it started we need to do all the things that work in silicon valley. Contribution is absolutely critical to the whole social enterprise area. No doubt about it. That is critical in how we define social change. For more on this check A Path with a Heart on my MBA blog.
In my experience working in the government and not for profit areas, these things only matter to a limit. Unless you have the capability in terms of resources and expertise to convert that social change idea into meaningful change on the ground it is practically useless.
All contribution is what makes a difference on the ground, to people. Does it need a MBA? It will be helpful but that is not the only way. The important thing is that passion and contribution can get you started but it will not let you scale and make a difference. Isn’t making a difference the point of social change?