Sourcing Shangri-La

Why Management 2.0 Will Be Built Upon BPM

 
Hats off to McKinsey and the HBR for creating MIX, an open innovation project to accelerate the search for new management models.

Speaking last week on The MIX Management 2.0 Challenge, Gary Hamel, described by the WSJ as 'the world's most influential business thinker', echoed its call for the reinvention of management:

"We are at an ideological inflection point. For 100 years, we've had the ideology of control.  We need to think of control in new ways."

He called for new management models that draw upon the innovation of the Web: organizational hierarchies that grow from the bottom up; working in small autonomous teams wherever possible; and enabling 'communities of passion' to flourish around ideas and innovation.

He called also for the embrace of experimentation: 'cultivating an environment where people don't need extensive permission to run small-scale, low-risk experiments'.

It's not just theory. He cites an example of a business that has embraced Management 2.0 principles -  a company with $3bn revenue and a 50-year history - with a lattice organization and no hierarchy. Every employee decides what to work on, and their compensation is linked to a ranking by 20 peers based on their value added to the company. 

A brief aside - it seems to me that there's a dimension missing here: the social impact of work. We need to create work cultures that are less competitive and more collaborative; where trustworthiness and responsibility are deeply ingrained; where parenting and work are not in conflict; where creating quality jobs is a measure of success. In the jargon, we need Management 2.0 models that embrace far wider definitions of corporate social responsibility.

OK, I hear you say, so just what is the tenuous connection between all this heady stuff and business process management? 

Well, it seems to me that every aspect of Gary Hamel's vision speaks to the need for an enterprise-wide integrated management platform. 

Nimbus And The Advancement of Women

We're just closing the books on what looks to be another successful FY. But we're not growing fast enough.  We have the perfect platform for orchestrating change across the enterprise and delivering sustainable performance improvement. We should be growing 300%+ per year.  We should have a growth trajectory that rivals Salesforce.com. So what's holding Nimbus back? 

For me, and this is just a personal pov, our biggest obstacle to stellar growth is not competitive solutions. Anyone who investigates our marketplace can see that we have a distinctive and unique offering.

What's really holding Nimbus back from explosive growth, it seems to me, is the low expectations of many organizations:

Too many people still think it's just a fact of life that big software implementations can bring a business to its knees before they are 'bedded down' in the months after the launch.

An astonishing number of people aren't concerned that risk management, controls and compliance are not directly linked with the 'live' operational processes of their business.

Others think it's normal to lose control of activities that they outsource, and then spend millions to buy back their own processes at the end of the contract.

And an extraordinary number of senior people talk about process excellence and process maturity but don't see it as problem that in fact their processes are in a myriad fragments - overlapping, conflicting, in a variety of formats, ungoverned, scattered across their organization - and often unconnected with people doing real work. 

A curious happenstance linked these thoughts with something rather more important, and which you might think at first glance to be totally unconnectable with Nimbus revenues: the advancement of women. 

McKinsey published an outstanding report earlier this week, arguing forcefully that women are crucial to US economic growth - and that "far too many highly skilled women simply don't progress up the ladder in corporate America". 

It's a compelling report on a vital subject - even correlating gender diversity in top management with higher rates of Return on Capital Invested (ROIC).  It points to the need for systemic, organizational change: "Companies that aspire to achieve sustained diversity balance must choose to transform their cultures."

But what is it that women bring to the party? If men and women are the two wings of the bird of humanity, what is the distinctive contribution of the female wing?

The McKinsey report suggests that women excel in the most important leadership attributes —intellectual stimulation, inspiration, participatory decision-making and setting expectations/rewards - and that "women prize the opportunity to pour their energies into making a difference and working closely with colleagues."

I agree, though I would add two more capabilities where I think women often outshine men: in thinking holistically, and in having more of an eye on the long term consequences.

And so, in a cerebral mash-up, I suddenly realized how our fortunes at Nimbus are tied to the advancement of women at senior levels.  It's gender diversity at the top that will lift expectations about making collaboration effective. And lead to more people asking: "Why does it have to be like this? Hasn't there got to be a better way of working?"

Not sure yet how we're going to square the pressures of quarterly earnings with historical forces which may be inevitable but aren't quite on the same timescale. Er... Ladies, maybe can you help?  ;-) 

Related Posts

05 Apr 2011    Integrated Compliance Cuts Operating Costs By 9%

18 Mar 2011    How To Avoid Paying For Your Own Processes

08 Feb 2011    The Process Hall of Shame Re-Opens

 

The Ethics of Performance Improvement

Most of us want to make a difference.  We want to do good in our work.   I've wondered out loud before about the ethics of our industry - whether Lean, outsourcing and operational excellence initiatives are just job-destroyers.  I concluded at that time that, on balance, they are not, and that I was comfortable with what I do. 

Recent research from McKinsey supports the idea that productivity can grow without killing jobs. 

True, McKinsey is focussed in this research on the impact within a single nation - the US - but the principles apply on a global basis as well. Innovation and the spread of best practices can raise global growth rates and spur employment. 

McKinsey concludes:

"Over the long term, apparently, it’s a fallacy to suggest that there’s a trade-off between unemployment and productivity..  Productivity is a job generator rather than a job killer."

Small comfort to those who lose their jobs of course, but important for all of us in re-affirming the direction and ethics of our work. 

Why US Productivity Can Grow Without Losing Jobs - McKinsey Quarterly

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1 Aug 2010    The Ethics of BPM and Performance Improvement

 

The Ethics of BPM and Performance Improvement

This blog shuts down for August. It heads for the beach and takes time out to reflect.

So this valedictory post before the break seems a good time to step back and consider an issue that’s usually crowded out by the day-to-day: the ethics of BPM.

Most of us are concerned about the ethics of how we live and what we do.  We want to be doing good, to be living an ethical life. We want our coffee to be responsibly sourced. We want to know our trainers were not manufactured using child labour.  We prefer to invest in ethical pension funds.  We want to feel assured that we are not conniving at injustice. So, since it takes up so much of our lives, the ethics of our work must matter a great deal.

For the purpose of this discussion, let’s define BPM as anything to do with performance improvement - CI, BPI, Lean, Six Sigma, whatever.  And focus on the most difficult ethical issue it creates – its impact on jobs.

To keep it simple, let’s ignore outsourcing and assume that no jobs are ‘lost’ through outsourcing, they are simply transferred to a new location or new employer.

Millions have lost their livelihoods since the start of the financial crisis in 2008.  The ILO reported that 20 milllion jobs were lost, 10 million of them jobs in emerging and developing countries.  In its latest Outlook, the IMF says that ‘persistently high unemployment’ is a critical policy issue in the world’s advanced economies.

Against this background, the hard reality is that the business case for any significant BPM project is almost invariably based on job losses.

The jobs may be lost through automation, or through productivity increases.  The BPM project will typically enable the same work to be done by fewer people.  More positively, the BPM project may enable the same people to do more work – that is, there are no jobs lost immediately.  But, even so, the societal effect is not dissimilar because economic growth will now create fewer jobs.

Put crudely, and for the sake of this argument, BPM seems to be a job-killer.

Now I believe, as will many of you, that work is about far more than simply generating wealth and meeting basic needs. Work provides each of us with a role in the community, it enables us to develop our talents in service to others, and to contribute to the advancement of society.

So it’s a serious question that deserves attention: Is BPM – my work– ethical?

Like you, I don’t want to hide behind excuses about being just one small cog in the corporate machine. Nor to sidestep ethics by saying that I have no choice, I have to do this to earn a living for my family.

The conclusion that I keep returning to though – and it would be interesting to hear yours - is that, despite what it entails, my work – BPM - is not unethical.

As I see it, continual performance improvement – the stuff that BPM relentlessly drives – leads to material and technological progress that is essential, and overwhelmingly for the good of humanity.  It’s the reason that we have medical advances revolutionizing heathcare, and mobile networks that can transform productivity for small farmers in Africa, and agricultural revolutions that will feed the world’s fast expanding population, and cheap solar panels that can provide light in a village hut in the evenings so that the schoolchild can study.

While it may eliminate some jobs, this material progress creates new jobs – many of them highly-skilled - that never previously existed. My own son is working on a new frontier in molecular biology that holds great promise for medicine in the long term – but was unknown just ten years ago.

So the economist in me accepts the efficiency argument about creative destruction. And - the economist's moral cop-out - sees the implications for equity as a separate issue, to be dealt with at the societal level.

In reality, of course, equity is often ignored. As a result, progress enabled by BPM can be traumatic for individuals whose job just got automated, and for communities whose local factory just got closed down.

Neverthless, providing support for those who lose their jobs through material progress has, surely, to be a societal issue. It’s not capable of resolution at the level of the firm, at least in any economic framework remotely close to our world.

So we, as a society, have the responsibility to create an economic framework that encourages full employment. Whether or not tens of millions are unemployed, and many more millions under-employed on part-time work, reflects to large extent our values.  We created this social reality, so we can change it. Ultimately, it’s a matter of how much we care about human solidarity.

In our world of global corporations, global trade and global migration, it’s difficult to imagine any ethical framework for advancement that is not both global in its scope and local in its application. The world has had enough of grand theories alone – it has also to be about changing me, here, now.

For me, the resolution lies in our recognition of the oneness of the human family.  When we can see this world as our common homeland - and each other as fellow citizens of this planet - then we will have the moral framework, and the necessary volition, to transform our world and build a true prosperity: just, sustainable and post-consumerism.

‘Sophistry!’, I hear you claim, ‘it’s just to help you sleep well at night’. Well, maybe, I hope not.

Actually, the bigger ethical issue for many people is probably not BPM at all but Software Sales! It always surprises me how many people simply assume that all software salespeople lie most of the time. There’s a whole new debate: does the ethical software salesperson exist?

One final thought: it’s been marvellous to watch the ascendancy of ethics over the past three decades. When I started work,  ethics was a valid topic in development economics but it was considered a non-issue in the developed world.  Nowadays, it’s way beyond ethical discussions: organizations vie with each other in their Corporate Social Responsibility programs.  CSR is often criticized by campaigners as inadequate, and perhaps sometimes it is. But just look at how far we’ve come!

It’s stirring too that ethical behaviour seems to be far more central to young people’s thinking. They are going to inherit this world. I think they might do a far better job in looking after it because their idealism has to be part of the solution.

Enough – where are my new Speedos?  See you in September!

PS Final thought - for US readers, reeling at the thought that anyone might take a one month vacation. Let me hasten to reassure you that, while this blog may be in its fallow season, I shall indeed be working for some at least of August. Blame it on my Gallic heritage – my ancestors from Normandy were economic migrants to England back in the twelfth century.  The thing is, if August was not the close-down, then we couldn’t enjoy nearly so much la Rentrée in September ;-)