Running With Slack vs. Running Overheated

Would you run a train network at 100% capacity all the time? No - I don't think you would. There's no slack. If one problem occurs then there's no room to manoeuvre. There'd be a crisis, a meltdown.

In fact - that's one of the problems with London Heathrow airport. It runs at 98% capacity. When bad weather hits, big delays ramp up quickly unless some scheduled flights are cancelled. 

So, it stands to reason that as managers we shouldn't try and run our people at 100%. If we do, a crisis will easily happen. We'll then be firefighting instead of growing. 

Or - maybe not. The counter view is this: if we are running at less than 100%, we are doing everything with time to spare. Some of that work is less important than the rest. If we say no to things, let's say no to the least important things. If you're saying yes to everything you're not prioritising. 

One way to navigate this dilemma is to make a distinction as follows...

Does all the work have to happen within a fixed time frame. Or not?

Predicable fixed tasks with defined time frames - these are best run with some slack capacity to allow for unforeseen circumstances.  

Transport and logistics would fit this model. Or fixed deadline civil engineering projects. 

Unpredictable tasks with non-defined time frames - these are best queued in order of priority. They can then be worked through at 100% capacity taking a new task from the top of the list as soon as another is completed. If there's a problem, simply pause until the problem is dealt with and then get back to the high priority work. 

Software development and creative work might fit better with this model. 

Of course, there's no right and wrong here. I'm just highlighting that there are benefits to running with slack and benefits of running with no slack. 

Ultimately it boils down to a simple question, "what would happen if we can't complete this by a certain time".

As a startup you're usually running at way above capacity simply because the answer to that question is the amount of cash you have left.  At some point however  you might need to design slack in your system to avoid a crisis.

International Growth - 4 Questions To Help Choose Between Buddism or Catholicism

I was having coffee this week with a CEO of a marketplace business and we were discussing the ways in which he could organise his international expansion.

Do you create local teams that are independent, can act fast and adapt well to the local culture etc. Or - do you do as much as possible from HQ and have as few people as possible on the ground locally?

The truth is, there isn't a simple answer to this question.  Either methods can and do work. 

I've had this discussion many times over the years and seen different ways of doing it first hand. 

The way I see it there are a range of functions which are more suited to being centralised and a range which lend themselves to being more localised. 

Finance for example, needs a centralised team. There may be local bookkeepers in each country but usually in finance you'd have as much as possible in one location. Reason; governance and control. 

Same with tech. Having a multitude of tech solutions for similar problems means you end up with a spaghetti like mess of code to unpick down the line. Unless there's a business case to say otherwise, tech, design and product tend to stay centralised. 

Sales, marketing and customer service are the areas which sometimes can be done centrally, sometimes they need a local presence. There's no "right" answer here because it depends entirely on context. 

What I can suggest are 4 questions to ask which might help you decide...

1. Do you need an entrepreneurial mindset to launch in the territory?

If success requires a local entrepreneurial leader to build relationships locally, they will need to be empowered to move fast and independently.  They'll need more sales, marketing and customer service resources that they can call on at will. Shackle their ability to move quickly and they will fail. 

Later, once a local business is up and running you may choose to start standardising things across territories by sharing best practice but to start with it could make sense to just go hard and fast with an entrepreneurial approach and less standardisation. 

2. Do local conditions change the proposition, revenue model or distribution channels used?

If you can use exactly the same methodology in several markets to succeed, much if what is done can be centralised and shared across territories. If it's a very local play with local relationships and local adaptations needed, the set up will be less centralised.

3. Does the business run on policy or principles?

Policy driven companies can be dogmatic and have very specific controlled ways of doing things. Success requires rolling out a template systematically to create a predictable experience for suppliers and customers. (e.g. a hotel booking website)

Other companies can achieve the same results by basing their decisions around a  set of guiding principles and giving more autonomy to a local team. (e.g. a recruitment agency). 

The difference between these two approaches can be thought of as a "Catholic" versus "Buddist" approach. Great examples can be found in the recently published "Scaling Up Excellence - Getting to More Without Settling For Less" by Robert Sutton and Stanford colleague Huggy Rao.

4. What are the risks of giving up central control?

If a business has developed strategies to reduce risk (e.g. Health and safety risks reduced through certain processes or controls), to allow a local method to manage these risks may not make sense

Finally...

These 4 questions might be a good place to start. 

Ultimately, it requires a real life test to decide. If market development approach proves successful and can be replicated time and time again, that's worth something. 

As always, test, iterate, amplify or discard. 

Why Growth Companies Struggle With Hierarchy

The way a team works together effectively will change as the number of people in the team increases.

An organisation of 10 people acts very differently to an organisation of 200.

Getting from 10 to 200 can be a difficult journey to manage at the best of times, although in a venture-backed start-up the growth rate is often accelerated artificially such that the number of people joining the company builds the team size quicker than otherwise would be the case.  A company who relies on organic growth will not add people as quickly and the adaptation time is slower.

I've experienced this growth challenge several times.  It's not easy.  Here's why.

I like to use an anthropological analogy to illustrate the point.

A group of 4-10 people will act like a "hunting party".  Together they go out on a hunt with a prey in mind but they are very tactical, communicating in real time as the circumstances dictate.  There may be a leader and the leader emerges as being the person that all the others defer to and they are happy to be the leader.

A group of 10-40 people will act like "family huts".  Imagine that each family has a hut around a central fireplace.  Each family has a leader and these leaders and the elders will sit around the fire to share stories and make plans.  Life is relatively spontaneous.  Everybody knows everybody else, they communicate directly with each other as needed yet they spend more time with their own family than anyone else.

A group of 40-150 people will act as a "small village".  In the village everyone has specific roles and there are people in charge of various things.  Someone might be in charge of security, another in charge of energy, another in charge of the harvest.  Everyone knows everyone else to a degree but things start to get done effectively by using a light hierarchy.  Each function has a leader.  To get that function to operate effectively, you need to get the leader to instruct their team of specialists to do the job required.

A group of 150 people+ is like a "town" and the default organisation is a strict hierarchy.  Large groups like this work through the power of the hierarchy.

(See also "Dunbar's Number, Cross 150 With Caution")

There is a reason why a hierarchy works better when there are more people.

Imagine you have 10 people.  10 people communicate directly with 10 people, verbally, via email, on the phone.  That's 10 x 10 potential lines of communication open at all times.  100 threads.  If there are 50 people and they do the same thing, it's 50 x 50 = 2500 threads. 5 times as many people creates 25 times as much noise.  We can't cope with so much noise.  To organise ourselves we naturally create groups and communicate with the group leader who then coordinates the activity of his or her group.  Less noise.

The type of person that operates effectively in a hunting party may not like town life.  In fact the reason they are a good hunter is because they are not townies.  People have preferred methods of organisation and communication, learnt behaviours and default reactions to situations.

A startup might hire some great people when they are small.  These great people might not like the environment they find themselves in a couple of years later when a new mode of organisation would be more effective.  They still act like it's a hunting party.  Those new hires who are used to living in a village or a town join the company expecting things to work like a village or a town because that's the size of the organisation - but they are confronted by hunters who act in a way that they need to adapt to.

The challenge for growth companies therefore is to adapt and change whilst maintaining effectiveness as well as acquiring and retaining talent.  Simply being aware of what is happening with the group dynamics helps, as does anticipating changes that might be needed as a result of a changing group size.  Communication structures work well if adopted by the majority, that's challenging if there are different expectations within the group.

There's no magic formula, this is human nature we're dealing with.  Awareness is a great first step.

Whose Job Is It Anyway?

One of my favourite maxims is "vision without execution is hallucination".  Not sure who coined the phrase but I like it.  It's all very well saying "let's do something" and it's something else to actually get it done, especially if it involves people.

It's helpful to have some "getting stuff done" tools in your toolkit and one tool that I've found helpful in the past is "RACI".

To get from an idea to reality, we need to know who is going to do the work.  This is where RACI comes in.

RACI stands for "Responsible, Accountable, Consulted and Informed".  It's a usually framework to understand the roles of all the actors in a system required to get a task done.

Responsible
The responsible person is the doer.  (Or doers, i.e. those that actually do the work and deliver to the agreed standards, time frames or expectations).

Accountable
The buck stops here.  This person is answerable for the correct and thorough completion of the task.  It can only be be one person.  The accountable person may well delegate their tasks to a responsible person but they cannot delegate their accountability.

Consulted
Their opinion is sought, these are experts whose skills or knowledge can influence the success of the task.  It's a two way communication flow between the Responsible and Consulted parties. It can be more than one person.

Informed
(Or - told). Those who need to know what's going on.  Not necessarily during task, more likely on completion.  It's a one way communication and it's usually many people.

In any project, you write down all of the tasks down as the rows in your matrix.  In the columns, write either names or job titles.  In the grid, type R, A, C or I in each cell. 



If you do this with all of the people involved you can then get consensus on who does what.

It provides a good grounding for the next part of organising - what interactions (e.g. meetings) and documents are required during the project to make sure everyone gets what they need from the others involved.

What's For Tea?

In our household there's sometimes a discussion that starts late morning or early afternoon with the question, "what shall we have for tea?" 

(Tea by the way meaning evening meal).

I usually say, "I don't know, it depends what's in the fridge".

My wife on the other hand likes to know what it is she is going to look forward to.

She'll think of a dish that she'd like and then asks what's missing to make it. If we need one or two ingredients, she'll buy them.

I on the other hand prefer to freestyle and make do with what we've got. Where she sees an empty cupboard, I see three or four alternative dishes. As I am the one cooking in these situations, I prefer to go with the flow.  It's not that I don't plan. I do plan. I plan by putting in place a lot of ingredients in our weekly shop. The cupboard is always stocked with lots of flavour and base items.

I however am less likely to imagine a meal in advance. I will perhaps look in a recipe book for ideas if we're having guests. My wife will think of lots of alternatives.

What about you? Who are you most like?

Both personality types serve a purpose. To be able to envision a future and make it happen is a great trait for entrepreneurs. Let nothing get in the way, get what you want.

Equally, the ability to adapt, optimise and deliver based on limited resources (making sure there are the right ingredients in place) is a great trait needed by teams who are working to build businesses.

Both tendencies have their advantages. Put both together and you get a formidable team.

By the way, it's no coincidence that my wife comes from a sales background and that I come from an operations background.

Just don't ask me what we are having for tea. Trust me, it'll taste great.

Algebra: What is the role of a COO?

The role of a COO (Chief Operating Officer) is not always clear to outsiders.  Nor, I would I add, is it always clear to us COO's.  It's different from company to company and from time to time.

As a member of the Executive Team, the COO contributes to making decisions on the direction of the company.  Figuring out what direction to take and why.

Direction = Vision + Strategy

And for the company to be successful it needs to be capable to pursue that direction.

Success = Direction x Capability

The word "Capability" in the above equation is where the COO has to focus.  He/she needs to create and improve the "capability" of the company in order that it can pursue it's objectives effectively.

Digging deeper, capability has two main drivers...

Capability = Competence x Capacity

Competence is how good we are at doing something and it's driven by 4 main factors;

Competence = Communication x Skills x Experience x Information

Capacity however is how fast we are at doing it and it's driven by how many resources we have (money, people, assets) and how productive or efficient we are with those resources.

Capacity = Resources x Efficiency

If the COO is concerned with Capability, then the COO's time by neccessity needs to centre around Communication, Skills, Information, Resources and Efficiency.

That means that COOs tend to think about organisational health, talent, inventory, feedback loops, processes, procedures, controls, systems, planning, reporting and troubleshooting.

So if Success = Direction x Capability

then

Success = (Vision + Strategy) x ((Resources x Efficiency) x (Communication x Experience x Skills x Information))

The COO contributes in part to "Direction" but mainly to "Capability".

At least that's the way I understand things, for now.

10 Ways For Teams To Do More Useful Stuff

Most managers, most of the time, have a job to do; mostly we manage a team to do stuff.

Sometimes we sit in meetings where ideas flow, sometimes we do deals. However, the nuts and bolts of business is just that; putting together nuts and bolts for other people to buy. (Or in recent years - bytes and bits).

After 20+ years of "getting stuff done" these days as a COO I'm still learning every day about what works. How to organise and coordinate teams in the most effective way. By effective, I mean in the way that creates most value for customers.

If a new manager were to approach me early in their career and ask today, "David, how can I really manage work flow well?", I'd give them the following ten tips. They are what I aspire to myself every day.

Whether it's managing software development teams, call centres, HR projects or staging events, I've found these principles to work. Until recently I hadn't been able to express them clearly. Reading about Japanese production methodologies has helped me reflect on what has worked for me and why.

So, here's my ten tips for getting stuff done well...


1. Make the work flow public

Get the work on the wall. In real time.

These days there are plenty of software solutions to track the status of a project but sadly even the best software fails when it comes to improving team effectiveness. That's because looking at a computer screen is generally not a public process and public processes create peer pressure.

Simply getting the status of the project on a wall and updating it on a daily basis creates awareness amongst all team members and prompts discussions such as, "why is everything stuck in the design phase", "we're not going to hit our target so what are we going to do" or "we're doing well". For example, use post-its that represent tasks that move along between phases of a project, columns for these phases and rows for individuals or sub-teams. Or, in the case of service environments data points such as open cases today, calls waiting, calls successfully answered within 3 rings.

By making the data public and keeping it updated the team starts to work together to address the challenge.

You might think that post-it notes, whiteboards etc are an extra layer of information processing that you don't need if you already track on a computer. Even if there is an extra cost or maintaining real time public work boards I've found the productivity gains to be worth the extra effort. It's counter-intuitive but like most things counter-intuitive it has a surprising effect.

Visual controls. They're very very effective.


2. Go and see the work

You can run all the metrics you like but a good manager needs to be close to the work.

As a Senior Manager this is not practical to do with all the teams that you manage but you still need to periodically "go and see". And literally spend time watching. It's these observations (supported by relevant data) that allow you to make the smart decisions. What's important to fix right now. What's causing the delay / error / problem. Who can help me improve this situation.

A manager is focused on what's closest to him or her. So go to where your customers are and you'll end up focusing on your customers.


3. Be your own customer

I use the word customer in the very broadest sense. Customer can mean consumer, the purchaser of the product or service. Or - a customer could be a supplier. Or - a customer could be a colleague in another team. Basically, if you deliver a service or product to anyone internally or externally, they are your customer.

For example, the finance team are customers of the HR team because they require payroll data from the HR team. The worker getting paid at the end of the month is the customer of the finance team.

Being your own customer can really expose you to the experience of being that customer. What problem is it that you need solved? What does it feel like to have that problem solved by your company? What could be better and why?

At the end of the day, people pay for products and services to solve a problem that they have. E.g. making phone calls (telephone), keeping on touch with friends (social network), self-esteem (fashion), hunger (food), family time (holiday).

If you don't experience the problem and solution yourself you cannot achieve the same level of understanding. Go and be your own customer as a customer would experience it. That helps you to see the value and see the improvements needed.


4. Be able to do the work yourself

Simply sitting with a team creates an awareness that you can't get by sitting in an office next door. Even better, you need to have done the work to truly appreciate what could be improved.

If you can shadow a team member for a day or two, see what it's like to receive the information that they receive, use the tools they use, you are so much more aware of what's important, possible or needed.

Some of the very best managers are those that worked their way up through the organisation from knowing the work in detail from the ground up. They are indeed "grounded" yet have managed to take on senior manager roles. This gives them the ability to have a "helicopter view" and a "ground level view" and they can switch between the two quickly and at will.

This is why it's so important to develop people within a team and train the next generation of leaders from within if at all possible.


5. Reduce work in progress

This is one of the most important and effective principles of all and it's one of the most difficult to achieve. Often we will hear of the importance of focus. Focus is all about deciding what not to do rather than about what to do. It actually about reducing work in progress.

If you have 10 tasks that you are simultaneously working on, you will be switching between tasks a lot. If you have 2 or 3 you can generally work through those in some detail and do them properly. You will actually end up doing more and doing it better. Fact, trust me.

Easy to say, not easy to do. Why?

Think about email as an example. You have a number of projects on the go. You reply to emails, you send emails and that's often because you're collaborating with others to achieve a project goal. Rarely do we work completely alone. The emails that are "sent" go out into the world and one day they might come back with the information you need and you can carry on. In the meantime what do we do? Go to meetings and collect new "to do" actions, plus we reply to whatever is in our inbox. This creates more threads and open items. Everyone else you're working with is doing the same thing and before long the organisation is multi-tasking and task switching adding more and more tasks that get slower and sometimes don't finish at all.

To combat this, discipline is needed. One way to achieve this is to periodically meet as a work group (daily or weekly depending on the group) and identify the top 3 things that matter for the common period and work together on those first every day until they're done. Not 10 things but 3 things.

Work through those 3 things and (here's the important bit), do not start anything new unless you've finished what you can on those 3 things.

You can always create a "queue" to have agreed items next in line once you have spare capacity to "pull" new work onto your schedule.

If you force a limit on the number of items in progress at any one time, the ones in progress move faster and the overall speed of the team improves.

I've found a useful online tool for organising projects and limiting work in progress for this purpose is Kanbanery.


6. Document the process

By writing down your process you have a point from which to measure and optimise it. In fact I would argue that the main purpose of documenting a process is so that you can change it in the future.

The process of documentation (whether it be in words or diagrams) exposes the process to the eyes of the team. You can start to see opportunities to optimise it. Do we really need to do that bit? If we bypassed step 4 would it speed up the process? How many people are involved and could we reduce that? (See point 10).

Go back to the process on a regular basis and ask, "how can we make this process better for our customers?"

Once a team understand that a process is there to be changed and not to be blindly followed without critiquing, it can be very empowering.


7. Measure the flow

How long does it take for a task to go from initiation to completion? Measuring the speed of work but also the variance of work demand is essential to speed up and smooth out the flow. And speeding up and smoothing out the flow (see point 9) leads to better value for all involved.

An example for an HR team; from job requisition approved to offer made, what is our average lead-in time? (And following on from that, what causes the delay in the process and how do we improve that without reducing quality of hires?). If you can measure the flow you can improve it. So go figure out how to measure.


8. Design processes starting with the customer

In any system, there is some kind of end result. Software shipped. Employee hired. Customer enquiry answered. Expenses paid.

When designing processes start with the end customer (either internal or external customer) and figure who sits directly before them in the process. Then who sits before them. And so on. The end customer is "downstream" and the initiator of the process is "upstream".

The process needs to be designed so that the downstream people get what they need when they need it. Then work backwards. This is known as a "pull system". A true pull system provides the quickest path to providing value for the customer.

So many organisations and teams work the other way around. They push things through and you end up with bottlenecks, delays and stress.

This a really tricky principle to pull off well and it requires the buy in of decision makers involved to make it happen. I can't claim to have mastered this myself in all areas of my work. I have however seen it work very well in software development teams that I've managed.


9. Level the flow

What does levelling the flow mean?

In software it means a steady stream of (pulled) productive work without overloading the team with spikes of (pushed) deadlines.

In contact centres it means predicting inbound consumer demand and matching staffing schedules to meet those predicted demands rather than being quite on slow days/hours and overwhelmed on busy days.

Sometimes you'll pull ahead of demand, sometime you'll catch up but all the while your people are steadily adding value in a productive way.


10. Reduce the number of people involved in a task

If a task has 2 people involved and 4 steps it will much faster than if there are 4 people and 4 steps.

If a task has 2 people involved and 4 steps it will be faster than if there are 2 people and 6 steps.

Reducing the steps and the people increases speed and, as long as quality is not decreased, increases value.

Modern companies tend to evolve to create division of labour. This is very useful in fact. A lawyer is better at being a lawyer than a software developer and vice-versa. So for some tasks you need experts. But for others there is division of labour because it's easier to train one person to do one thing than train one person to do many things. Plus, you can pay less for the low value tasks.

So, a simple question to ask is, do I really need this division of labour on this task or do I just need to invest in training?

As customers we hate being passed from one person to another. So as business owners we need to do that only when needed and create multi-talented well trained team.



Recommended reading

The Toyota Way by Jeffery Liker
The Power of Less by Leo Babauta
Kanban by David Anderson
Switch by Chip & Dan Heath

When Is Too Much Cheese Fondue Too Much?

Is there a limit to how much cheese fondue we can handle?

Yes, and it's about 50 servings.

Huh?

Maybe I'm not making sense so I'd better explain myself.

Back in 1990 a young David Norris left university in the midst if a recession with limited career options. (Theology as a degree isn't exactly vocational unless you want to be a priest - and as an atheist I wasn't sure I could be convincing at interview). So, at the relatively young age of 21 I decided I still had time on my side and could do worse than follow my passion.

With student debt to forget, I took the train to Dover in early December, the ferry to Calais and a train to Paris. I muscled through the metro system in rush hour to get a night train south. I woke up in Bourg St Maurice in the French Alps with about £100 to my name and I took a bus to Val D'Isere with my backpack, ski boots, skis and a burning desire to find a way to stay there and ski for 5 months. Nothing else mattered.

I had the advantage of speaking some French. So I knocked on doors for 3 weeks asking for work. I found a place to stay during thus time, sharing an apartment for 3 with 10 other ski bum hopefuls. (Yes, it was smelly, messy and wild). I made friends and it was through a friend that I heard about a job in a restaurant kitchen. Lesson 1: networks bring opportunities.

As my credit card was maxing out I managed to persuade this restaurant to take me on. I was to be a "plongeur". And this is where the cheese fondue comes in. A plongeur is a kitchen assistant and wash up. They didn't know it when they hired me and I didn't know it either but they had just hired the best damn plongeur in history.

I was super motivated. I was getting to ski every single day. I would wake early, be on the first lift and ski to 3 or 4. Then, shower, change, snooze and get to work for 6. Because I wanted to be out early skiing the next day I wanted to fully optimise everything possible and be ready to leave work as soon as possible. The earliest was midnight. On a busy night it might even be 2am.

Yes - that really is me

Cheese fondue is served in a ceramic pot. It's mainly melted cheese with some wine and a few other secret ingredients. Dunk dried bread into the cheese. A local speciality. Indeed our restaurant was a local speciality restaurant. We served meat fondue, cheese fondue, raclette, steak tartare (raw minced beef steak) and other high protein feasts.

There were two chefs and myself in the kitchen, a waitress, the owner and his wife. On a busy night we would turn 100+ covers. The French chefs and I kept ourselves fired up with plenty of Dead Kennedys punk classics. They knew all the words.

I was paid about £150 a month. Accommodation included. I paid £60 a month for my season-workers lift pass, then I had some pocket money for ski servicing, beers and food. Slave labour. Loved it.

My main job, apart from washing up was to prepare the desserts. I was an expert at classic ice cream creations such as Banana Split, Peche Melba and Cafe Liegois. The cheese fondues would be stacking up as I prepared the desserts because of course, it's when the main course is brought in that the desserts are then ordered. It's a double whammy because not only have you got more washing up to do you have less time to do it because you're having to prep desserts. Actually, it was really a triple whammy because on a busy night I had to also keep the flow of the crockery and pots back into service. Doing that meant less time for desserts and even less time for washing up.

At 50 fondues a night the system (me) would go into meltdown. Even though I had perfected cleaning fondue pots with a scraper, I was struggling to get the pots back to the kitchen in time and do the desserts. By midnight I had the entire restaurant stock of pots, pans and crockery stacked up in a pile. It would be a long night.

Try washing up 50 of these

I learnt a lot those 5 months that I have found useful at work ever since.  The main lesson learned though is to watch out for triple whammies. As people add more tasks or projects to the mix they sometimes forget that gives them less time to do the same jobs they already have. Also, if volumes of transactions multiply at the same time they'll have even less time to do the second job and even less time to do the first job. Meltdown is always on the horizon.

So, in a growth company, my advice would be always to think about the proposed operational solution not only in the present, but in the future as well - and in a future where you are doing twice as much business.

Triple whammies happen all the time and when they do the only solution is to dig yourself out of a hole and fix the mess. By then you've probably caused some damage and you may have lost staff, customers or suppliers. That sucks.

You need to know how many cheese fondues is too many.

Why COOs love roundabouts

Approaching a roundabout one early morning last week, I was riding to work on my bike, crossing through Richmond Park. It was relatively quiet with a few cars and bikes and the deer were happily munching on grass in the fresh morning air.

I sailed through the roundabout without slowing down. Almost at the same time but not quite, another bike came through from another direction. And a few moments after that a car flew through. None of us slowed down, we didn't need to. It was all fluid, smooth and unintentionally synchronised.

At that time there was no need for a roundabout. We could have all managed without one. Later in the day however, with more traffic, a roundabout would become very beneficial. Someone had wisely built one.

A roundabout is both a physical technology and a social technology. Physical because it requires certain techniques and materials to build, social because it requires rules and behaviours to have benefit. We developed roundabouts to solve a volume and interaction problem.

Growing companies have the same challenges as the road traffic network. As volume and traffic builds, more processes and organisational structure (social technologies) are needed. Plus, more servers and work space are needed (physical technologies).

The CEO sets the direction. He/she says, "this the horizon we're headed towards and here's why". It's a "what" and a "why" focus. The COO however takes responsibility for how we reach that horizon, getting the right team together at the right time, building enough (but not too much process), find the best way to make the team perform together. It's a "who, when, how much" focus.

As a COO therefore I need to figure out if give way signs, roundabouts or traffic lights are needed. I need to build junctions and roads and I need to do so with a sharp eye on making sure the costs and revenues are supporting that investment.

With a tech start up, the COO role is particularly relevant. How many people to hire, in what order, how many servers to pay for, building systems for organisational effectiveness...these things are always important in any business, but in a tech start up the impact is amplified many times over. Some companies grow at 10 to 20 percent a year in revenue, people and infrastructure. For start ups, add a zero to any number. 10 times as fast. Traffic can hit your junctions pretty quickly and you need to know whether to put in place a give way sign, stop sign, roundabout, traffic lights or flyover.

That challenge of building a team and product to make possible a vision is one I love. I guess that's why I'm a COO. I love roundabouts.

If You Knew You Couldn't Fail, What Would You Do?

Have you ever seen a baby learning to walk?  Of course you have.  Now, tell me how they do it.

I'm lucky to have four kids.  I didn't teach them to walk.  They didn't teach each other.  They just got up and had a go.  First of all they started to figure out how to pull themselves up to stand against the furniture.  Then they made one or two steps.  A few weeks later and they were walking.


We all first learnt by trial and error.  


Later in childhood, we start to learn from others.  We are taught.  We go to school.  It's quite amazing to have my eldest daughter read a book to me.  She's six.  6 months ago she couldn't read.


We are taught.


There's a third phase.  Once we know how things work, we can go figure things out for ourselves.  Some kids spend hours playing tennis, some spend hours programming, others spend hours and hours making things.  Some of these kids will become the best in the world at what they do.  Literally the best in the world.  In this phase we practice.  We seek guidance, we practice some more.  We put hours and hours in.  We make mistakes and learn from them.  We practice some more.


We are self-taught and we practice.


But then - we become adults.  Some people continue with trial and error (It's called 'learning on the job' in the business world.  Some are taught (it's called 'training' in the business world).  Some practice, work long hard hours, push themselves and become the best in the world at what they do.  I'm not sure what we call these people, but I admire them.


I am more thirsty for knowledge now than I have ever been in my life.  The more I learn the more I realise there is to learn.  And I want to be the best in the world at what I do.  Why?  It's simple.  There's very little in life that beats the feeling that you get when you say 'today I did what I do best!'


Today I will do what I do best.  Will you?


Imagine a team where every person can say that.  Can you imagine what that team would be able to achieve?  It would be extraordinary.  World beating.  In fact just writing this makes my hairs stand on end - it really is something special.  It's like watching the Oxford Cambridge Boat Race and seeing the winners win.  It's awesome.  


The thing about great teams is, 1 plus 1 equals 3.  The sum of the parts is greater than the whole.  Only it's not guaranteed.  Sometimes two egotistical geniuses equal less than two because they haven't figured how to collaborate well.


So - on a practical note then, how do we build great teams where every person does what they do best and on top of that build a winning team?  


How do we make that team possible?


Here, I think are the 5 main ingredients;


1. Allow people to make mistakes.  


If we make more mistakes, we learn more.  I'm not saying that we should aim to fail.  Rather we should always be 'doing'.  Doing something means you have the opportunity to learn.  If you don't do anything you won't make any mistakes, but then again you won't learn anything.  This is the thinking behind the phrase 'fail faster'.  It's not that you should aim to fail - instead, you should 'do more faster' - because that's how you'll learn.


Fear holds us back though.  We are afraid to make mistakes in case it's not seen as successful by our peers and egos.


My wife and I were talking the other day about why she is successful at what she does.  She does business development for a recruitment firm and she needs to figure out how to book meetings with HR Managers and then persuade them to use her firm's services.  She said that you can't book meetings without making phone calls, so she has to be very persistent to keep calling until she gets the meeting.  She will keep calling way long after other people have given up.  Most people fear the rejection, whereas she doesn't.  


Her motto is "if you knew you wouldn't fail, what would you do?"  Great advice indeed.


So - as a manager, I will always say to my team, 'make decisions and do stuff.  Better to do lots and be right 95% of the time than to do a little and be right 100% of the time'.  You'll learn faster and so will I.




2. Trust your colleagues and help them to learn from their mistakes


You can only truly build a successful team if there is true openness.   I need to be open with my intentions, emotions and reasoning.  By doing so, my colleagues can help me identify what I'm doing well and what I can do better and I will learn faster.  If I do this though I am opening myself up.  I am doing exactly the opposite of what most people do in business.  It needs mutual trust, respect and willing - and it needs to start at the top.




3. Design learning structures


A great example of this is how we used to run our software development cycles in one of my previous companies.  We planned our work in two week cycles.  This was pretty effective in terms of getting things done.  The important ingredient I think that actually made it successful was that after every cycle ('sprint') we set up a 'retrospective meeting'.  This was a simple meeting where we simply asked, 'what went well, what didn't go so well and how will we in future do more of the good stuff and less of the bad stuff?'  Doing this systematically requires a regular meeting slot in the diary, an agenda and a habit.  It requires structure.


Good teams consciously create these structures to become learning teams.




4. Hire people that can handle this culture


This is critical.  If you believe that you want to build world class winning teams you need to hire accordingly.  Sure you need talent and experience.  I say they're over-rated.


Just because someone has knowledge and ingredients to make a great cake it doesn't mean that they will.  And just because someone was motivated to bake great cakes in the past doesn't mean that they will do so again in a different kitchen.


What really matters is
- does this person know how to apply themselves to a challenge?
- is this person willing to open themselves up and be fully transparent with their emotions, reasoning and intentions?
- are they able to give feedback to others in a helpful way?
- are they thirsty to be the best in the world at something?  




5. Go with the flow


You cannot tell people what motivates them.  In my experience, people do best what they are interested in, not necessarily what they are good at.  I might be quite good at filing and organising paperwork, it doesn't mean I'm interested in it.  Give me a reason to be interested in it or find me something to do that I am interested in and I will do it well.  Really well.


So - as people develop in your team, find opportunities for them and help them where possible to grow in your organisation to do what they do best.   Build the team around the capabilities you have and seek out new team members to fill the gaps if they exist (and make sure you follow the points in point 4).


To conclude


Great parent allow their children to make mistakes, they teach them all they can, and they give them wings to fly and pursue their own dreams.  


In a team, we must think of ourselves as parents of each other.


And every day, if we strive to be the best we can be in what we do we'll need to push ourselves to the limit and make a few mistakes. It's the mistakes that lead us to truth.


Benjamin Franklin once wrote, 


'Perhaps the history of the errors of mankind, all things considered, is more valuable and interesting than that of their discoveries.  Truth is uniform and narrow; it does not seem to require so much an active energy, as a passive aptitude of soul in order to encounter it. But error is endlessly diversified'


Fail faster. Act like a child and a parent at the same time. Be the best in the world at something every day.

Change

Things I learnt this week about change

Set the destination
Find the bright spots, then do more
Direct the script, but keep it simple
Shape the path, environment matters
Break habits to catalyse change
Big problems don't need big solutions, small solutions can solve big problems
Chunk it and keep the horizon near; small steps are easier than big ones
Develop you & your team to be able to make bigger steps
Identity is the strongest motivational lever there is
Behaviour is driven by identity and environment
Culture is just collective behaviour
Use social proof when you can to influence culture
Change the culture and anything is possible

Reading; "Switch", by Chip and Dan Heath

Meandering Meetings and Excessive Email

Recently I saw a debate on an online forum about productivity.  A strange place to debate perhaps given that online forums are possibly one of the best ways to be unproductive. Part of the discussion questioned the value of meetings (meetings are toxic, a time-waster, just don't have them) and one contributor advocated that email is best - that you get more done by email than by meeting face to face.  This, in complete contrast to one of my colleagues who detests email and prefers to meet face to face - for just the same reasons.

We all have opinions it seems.  Some say meetings are effective and that email is counter-productive, others say that email is highly productive and meetings are a waste of time.  I simplify of course.  There's other interaction methods such as IM, telephone calls, SMS, faxes (remember those?), conference calls... etc!

If anyone tells me that one belief, faith, method or product is categorically better than another - I don't believe them.

This world has been built on oversimplification.  We simplify because the world is too complex. Some say an Apple Mac is always better than a PC?  Is it?  Always?  Sometimes maybe it is, sometimes not - it depends on what it's been used for.  Context.  A is better than B only some of the time, but B can sometimes be the best way.

Emails or meetings?  Learn to know the difference. I believe that if a message doesn't get through, it's not the fault of the recipient.  The sender needs to communicate in a way that the receiver understands.  Some people respond well to email, others don't.  Understand your audience and figure out which channel to use to get the job done.  If a meeting will get the job done, have a meeting.  If email will work best (for that audience) - use email.

Getting things done requires time to focus, time to collaborate, time to be challenged, time to ask for feedback, time to make decisions.  Saying one method of communications is bad or better is totally missing the point. Context matters.  You're sending or receiving a message.  This is basic marketing communications; understand the audience, select the best channel to engage with them.  Adapt.

One more closing thought.  Being productive does not equal being busy.  I've found that good work is rarely done in one sitting.  Starting a job and seeing it through are important, but equally important are the gaps in between where free thought (say - in the shower, in bed, walking to work) allows ideas to cascade, collide and connect.  Returning to the job in hand, your ideas are firmer, maybe you have new ideas - or see new methods.  My mantra is to focus, but be free.  I try to give myself time to explore my thoughts with others, (say - in coffee shops, or at lunch) - and not feel guilty about it.  It just might not look like I'm busy.

Judge me on the output and not the input or the method.

Being Human, Implications For Organisations

Here’s where I’m currently at; it’s my belief that there are four key building blocks that form our perception of life:

Language
Emotion
Senses
Memory

I also reckon that if you view an organisation (or company) in the same way, it allows you to figure out how to influence its thinking and behaviour.

This is a tentative conclusion that I’ve reached after discussion and thought over the past few weeks. I’ve been thinking about what elements form the “essence” of our experience and understanding. It started when I realised that we as humans differ immensely from our animal friends in our use of language. Our brains articulate ideas and facts through language and our intentional communication, whether through speech, expression, or text, is rooted in a linguistic thought process. Language is intensely powerful in its ability to convey meaning but if used inconsistently can hide meaning. More about that later.

Then, realising that non-intentional communication (reactive expression for example) is more likely a result of emotion than language, I started to understand that there are some fundamental building blocks that allow the grey matter in our skulls to interact with its environment. There’s language, there’s emotion. Building blocks.

Another core building block (or a set of building blocks of course) are our five senses; sight, hearing, taste, smell and touch. These are inputs that guide us on our way.

For us to learn and to put into context our situation, we have memory. Memory, whether physical or mental, allows us to recognise patterns, store knowledge, build skills and interpret emotions.

These then are four core building blocks of being human: language, emotion, senses and memory.

Mastering these building blocks can lead to integrity, success and contentment.

Implications for organisations

As soon as you realise that these four building blocks exist, and that if they are developed and mature it can lead to integrity, success and contentment, you start to assess an organisation against the four areas.

Language

- Do we use inclusive language? I personally am on a mission to remove acronyms and abbreviations from my communication and where possible to remove it throughout the company. If you don’t know what an acronym means, you feel excluded, or just don’t understand.

- In meetings, does everyone understand the meaning of words? This is especially important in a multi-cultural company. I often pick up on complicated words and ask people to explain them for the benefit of the group. I know I understand the word, but I’m concerned that others might not.

- Do we all have the same vocabulary? What we call things carries immense power. Words convey meaning; therefore what you call something (e.g. “team member”, colleague”, “employee”, staff member”, “worker”) determines many things, not least of all how it affects company culture. Personally I detest the use of the word “department” because it conveys compartmentalisation, and I want to build a company culture of teamwork where the best people work together to get the job done. Naming of products, processes, procedures, office areas, events and job titles all matters. Far more than you can ever imagine. Change the language, change the culture.

Emotions

- Knowing whether we are slaves to our emotions or whether we are acting rationally is an important skill as a human being. Knowing when to listen to your emotions is important in life, and therefore this is also the case within companies. Ego, pride, fear, greediness – these for example are all emotions that a company can evoke in the way it reacts to its environment. Sometimes these are useful, sometimes not, but a company needs to be self-aware to understand if it’s acting emotionally and if so, why this is so?

Senses

- Of course, if we are to make business decisions, it’s good to have accurate information about your environment: your customers, your investors, your team, and your competitors. To gain this information, you need to look and listen, and sometimes, taste, touch or smell (particularly useful in the case of a restaurant business for example). Companies that fail to hone their senses, fail their potential.

Memory

- Winston Churchill said, “Success is going from failure to failure without losing enthusiasm”. By experiencing life we start to understand what works and what doesn’t. Trial and error has always been a certain way to learn. In this context, it’s our memory that serves us, that helps us recognise patterns and to build up intuition.

- As a Firefighter, Chef or CEO, every successful individual has along the way learnt from their mistakes. As a company therefore, how do you help yourself become a learning organisation?

- For a start, recognise mistakes, admit failure. Discuss what could go better next time.

- Also, create methods to store knowledge. People come and go. Whether in the form of documentation or training others, without making an effort to store skills and knowledge, they’ll leak, they’ll fade and you’ll have to re-learn.


If you want in business to create a happy and successful company built with integrity, pay attention to the four building blocks of human experience: language, emotion, memory and senses.

Don't Be Mediocre, Be A Generalist

Here's a problem. Most e-commerce websites suck. They're average, sub-optimal.

They suck. If they were high street shops you'd see what I mean. Some would not be signposted. My mother would not be able to find anything she wanted in the store, let alone figure out how to pay. They might not even be found if you called directory enquiries. Lighting would be poor, there would be no space to park and you'd be unsure if you were being served by rip-off merchants or a legitimate business.

Sure, there are some great websites out there. A few. However, because web customers are in many ways "invisible" to the businesses that are trying to serve them, site managers running these sites get away with mediocrity.

Small businesses or large businesses, the problem is the same.

In small businesses you need an all rounder running your web business: he or she needs to be able to do a bit of everything and do it really well to be effective. These all-rounders are few and far between. So - good websites for small businesses are few and far between.

In a large web business, you end up with different "specialists" taking on different roles. You get the design team, the merchandising team, the online marketing team, the tech team, the product planning team, the analytics team, etc. They are all brilliant at what they do. Brilliant.

Just why does the site that you end up with suck if they are brilliant? The really great websites are the ones where the teams do "joined up thinking". The site design team know something about SEO. The analytics team knows something about PPC. The product planning team understand affiliate marketing. If they all understand the basic principles behind all of the main disciplines, you'll do fine. If not you can end up with mediocrity. Division of labour brings pockets of excellence and general mediocrity.

The solution to me is clear: every person involved in delivering the website and running it should be familiar with the basics of how all the main disciplines work.

I will give somple examples of what are these "key disciplines" that are needed to overcome mediocrity and suggest 5 tips on how to acquire those skills. I don't for a moment suggest that anyone can be an "expert" in all of these areas. What I am suggesting is that everyone in an ecommerce business that can affect the business results needs to be a "generalist" and be fluent in the basic principles.

This is true whether you are a one-person site manager doing everything or whether you are a specialist in a big company.

Consider ecommerce websites to be like high street shops. If you are running a traditional "bricks and mortar" business, you need to do three things...

1. Attract customers
2. Persuade them to buy when they come through the door. (And ideally, maximise this so that they
buy more than they would normally have done).
3. Encourage them to come back to shop again and become a regular "repeat customer".

Quite simply, running a website / web service is all about customer acquisition, conversion and retention.

Acquisition

Retail is all about selling the right product to the right person at the right time. So to get this right, there's some preparation needed in terms of customer insight / research, developing a brand, building a proposition, product planning & strategy, business case modelling. Then once you have a product you need a communications plan, (including, but not excluding online PR). On a technical side, you need to understand search engine optimisation (3 core pillars; site structure, content and reputation), search engine marketing (paid search), affiliate marketing, social media optimisation, RSS, blogs, ad serving.

Conversion

Here, the most important discipline is user-centred design, also information architecture, followed closely by merchandising techniques and understanding effective calls to action. Think about good error handling, optimising shopping "funnels", accessibility, compelling copy writing, tactical promotions and you might just have scratched the surface.

Retention

Plenty to learn about here too, from email marketing to direct mail (CRM), use of confirmation emails, special offers, customer database management and that's just scratching the surface.

And more...

Underpinning all of the above is a good understanding of web analytics (for traffic sources, keyword analysis, conversion tracking - and a whole lot more).

And to get stuff done, to make it all happen they also need to understand a little about technical things like technical architecture, software development methodologies, project management techniques, be a great tester.

To add some real flavour to the mix, key principles of many academic disciplines come in useful, economics, sociology and psychology.

And to be effective in business generally, you need to know about HR issues for the countries in which you operate, be a great manager, have good negotiation skills, know a little bit about contract law.

If you find someone who does all of the above well and them let them loose on your website - now you're talking! Also, point them my way, I'd love to meet them!


So - if you're just starting out...

5 tips to become a great E-commerce "generalist"

1. Work with great people

We learn so much from working with other people. Put yourself with the best you can find and learn from them. Soak it up.

2. Apply yourself

This industry is only about 10 years old. Most of the so called experts became experts by just applying themselves and learning from their mistakes. You can too.

3. Attend training

If you can, go on specialist training courses. There are few places such as e-consultancy.com where you can get a kick start

4. Read, read and read

You can never read enough. Some of my favourite books are listed here if you need ideas.

5. Have a go

For me this is the most important advice of all. Have a go! I didn't know anything about setting up RSS feeds until I had to do one for this blog. Figure it out, and just try.


One day, most websites will be great. Until then, if you are a "generalist", go make some money!

"The General"

Dunbar's Number, Cross 150 With Caution

Do organisational structures need to transform once they exceed 150 members in number?

In the fast growing companies of the dot com boom, and now in boom 2.0, many companies must experience the aggressive growth that takes them past the 150 team member mark without them realising what's happening to them.

Why 150? What is it with 150 that makes it significant?

The idea was first floated by British anthropologist Robin Dunbar (b. 1947), but subsequently popularised by Malcolm Gladwell in his book "The Tipping Point".

Known as "Dunbar's number", the number 150 is a theoretical maximum number of individuals with whom a group can maintain a social relationship where each knows who each other is and how they all connect socially.

So - in a group of 150, it is still possible to know everyone else, understand their roles and their relationships with each other. Beyond that, forget it.

This number is pretty significant therefore when it comes to shaping organisational structures. With a team of 150 you can still manage with a relatively flat reporting structure, fairly informal communication processes and decision making.

Once you cross from the "medium" company threshold into "large", the old ways just don't work any more. You need a different way of managing communication, direction, decision making. What's more the people that worked well in that environment most probably aren't the same type of people that work well in the smaller team. "Things aren't the same around here any more", "It's not what it used to be"... suddenly you've got 30% attrition and a super stressed out recruitment team.

Gore Associates (makers of Gore-Tex among other things) apparently keep their manufacturing plants under 150 persons. They found this size keeps people in touch with each other. If they need more production capacity, rather than expand a plant that's at the 150 limit, they'll start a new one.

Army regiments work in a similar manner. And just for good measure, Dunbar's surveys of settlements in ancient times show a tendency to be limited at about the 150 number.

Good companies require effective teams to succeed. Most companies however grow organically and rarely do leaders stop and ask how the social relationships in their teams work and what the effect of growth on those relationships might be.

So, a word of caution: if you are a small company doing well, and aim to hire employee number 150 in the coming months, start thinking about what your world needs to look like as you become a medium sized company.



See also: Wikipedia, Dunbar's number