Deming’s philosophy on management that was first published in the 1950s. His leadership fundamentals revolve around the concept of “Everything is a system, and we are part of it.” Below are the leadership competencies that are elaborated by Scholtes (The Leader’s Handbook: Making Things Happen, Getting Things Done) from Deming’s System of Profound Knowledge.

• The ability to think in terms of systems and knowing how to lead systems;
• The ability to understand variability of work in planning and problem solving;
• Understanding how we learn, develop, and improve, and leading true learning and improvement;
• Understanding people and why they behave as they do;
• Understanding the interdependence and interaction between systems, variation, learning, and human behavior. Knowing how each affects the others;
• Giving vision, meaning, direction, and focus to the organization.

Today, 50 years later, his vision of leadership is even more relevant in the global, complex, fast pace world we live in. Simply, we as leaders need to understand the system, as we need to be integrators, not insulators; team players, not team captains; communicators, not commanders.

I previously wrote how creativity, invention and knowledge are the key ingredients for innovation. Innovation thrives in environments that nurture new ideas, creativity and sharing as it is built on existing ideas, knowledge and inventions. As a system, innovation is collaborative, multidisciplinary and requires diverging viewpoints and experiences. It is also inclusive, and it is about bridging and extending linkages and interactions to build something that is greater than its parts.

On the other hand, organizational silos are barriers to innovation. As the name represents, they are highly-vertical, where the communication and collaboration outside of the organization is at best minimal. It seems, as a business matures, it becomes impossible to avoid becoming a victim of a silo mentality. This is mainly due to the nature of business and people: the essence of success strives to keep order and maintain the status-quo that created it in the first place. With that, it is a challenge and a requirement for businesses to reinvent themselves, as recently demonstrated by the Yahoo Memo: The ‘Peanut Butter Manifesto.

Organizational silos come in different shapes and sizes. Some are obvious as they bring out the worst in people: us vs. them attitude, playing schedule chicken, finger pointing, CYA (cover your a**) syndrome, political turf fighting, and power struggles are all common examples where the situation eventually leads to attrition of good people. Hopefully this does not describe your current workplace, however you have probably experienced some of the other types of organizational silos.

• Geographical silos — Globalization increases the urgency to break down geographical silos. Lack of customer information and understanding, disconnected systems, and inconsistent hand-offs between teams in different geographical locations often result in missed opportunities, unhappy customers and waste as everything gets duplicated at all locations.
• Functional silos — These tend to surface between departments where the authority rests with the functional managers, such as marketing, sales, R&D, etc. Although R&D and Marketing collaboration problems are frequently noted, you can experience silos forming within the same department where there are differing types of functional responsibilities. The QA team feeling like a 2nd class citizen compared to developers, or the usability team not feeling listened to are common complaints.
• Organizational silos — Organizational silos usually occur between business units. As a customer, we are the ultimate losers and we feel the impacts of the firm’s disfunction the most. Usually in the form of products that lack interoperability, different customer experiences, purchasing processes, usability, … Basically a lack of company brand.
• Project silos — Lack of best-practice sharing and the inexistence of organizational level project management processes and standards result in project silos. On the surface this might seem innocent, yet it results in inaccurate and inconsistent project status reports with major challenges for implementing an effective portfolio management process, not to mention lack of quality, usability and delayed project releases due to difficulty of managing resources and budgets between projects. This is why there is an increase in PMO (Project Management Office) creation and centralization of project management activities.
• Technology silos — Usually driven by NIH (not invented here) syndrome, needless technology silos result in interoperability issues between products from the same organization, wasted development and testing efforts, increased development costs and increased time to market.

In summary, organizational silos are bad for innovation, bad for the organization and bad for the firm. Fortunately, the symptoms of the illness caused by organizational silos are pretty obvious. So, you know you have a silo problem when:

• You cannot share knowledge or information for developing new ideas or resolving problems;
• You are sure that any information about your firm’s customers, markets or competitors is classified as top secret;
• You gave up on any hope of leveraging and building on your firm’s existing assets, such as IT infrastructure, manufacturing, operations for new ideas and products;
• For every forward step you take, you seem to take 2 steps back and you see its impact in decelerated cycle time of new product introductions;
• You have a culture that values personal expertise and knowledge creation over teamwork;
• Deja vu is your middle name. You feel like you are stuck in the twilight zone, wondering why the history repeats itself, and if you will ever escape;
• You are stuck with bureaucracy and endless pointless meetings even over simple problems, and you are certain that having a root canal would be less painful than this;
• You are stuck in a cycle of incremental improvements and about to suffocate as you are trapped in the confines of the capabilities of your organization;
• Everyone seems to completely lack awareness of who does what in the organization, resulting in duplication of efforts and more needless waste;
• You are convinced they were thinking of your organization when they defined brain drain;

Silos are generally the result of organizational structures, senior-management priorities and values, and the culture that is created through the existing reward system. Using a 5-prong approach, you can break through the silo mentality and bring down the walls.

Emphasise the appropriate values

Trust, respect, honesty, communication and collaboration are the needed values to build your organizational culture around. As you shift from top-down driven organizational dynamics, you need to promote values that will enhance your organizations communication and collaboration capability and enable your teams to resolve conflict and improve their decision making capability at their level.

Build a culture of collaboration

Cultural changes need to start at the top: leaders will need to consistently and constantly communicate and demonstrate the importance of sharing, leveraging and collaborating across the organizational silos. Certainly the reward system can kick start the needed transformation by focusing on making collaborative performance objectives part of the employee review process. Recognition of people who work across the organizational boundaries will also reduce the emphasis on individual achievement, and shift the focus to collaboration.

However, building a culture of collaboration is more than just encouraging better communication and sharing. It is focused on creating value by effectively and efficiently utilizing the available assets (knowledge, people, tools, …) and bridging the gaps regardless of job title, functional expertise or organizational belonging. This requires not only a sense of shared purpose, but also a greater understanding of how everyone contributes to the organization’s success. To create that understanding, invest in job rotations and international assignments, utilize cross-functional teams and invite others from different areas to your meetings.

Rally around a shared purpose

Rather than top-down direction setting, build a sense of shared vision and purpose, personal accountability and empowerment throughout the organization. Shared purpose allows everyone to connect to an idea that is bigger than them, and allows them to see how their day-to-day activities contribute to the bigger goal.

To further the cause, bring systems thinking to your organization by integrating your departments, and building in collaboration by utilizing cross-functional teams, ignoring org charts and focusing on innovation and customers. With that, increase the transparency in your organization, openly communicate decisions, priorities, financial challenges, competitive pressures, and strategic initiatives to all.

Make it easy to connect and share

Lets face it, developers are not the most outgoing kind, but they are curious and usually hungry. And, there are ample opportunities to connect and share. So, look at ways to bring people together in your firm through idea exchange days, open house days, best practices exchanges, internal seminars, brown bag discussions. But don’t stop there, find ways to extend your collaboration network outside of your firm by bringing speakers and scientists, tap into your customers and suppliers.

Also, utilize collaboration technology and social networks to connect your project members, experts, hobbyists, early adopters and visionaries. Make these tools and communities work for you.

Focus on the important stuff and measure accordingly

As I mentioned before, what gets measured gets done. So, focus on the important stuff like your customers and innovation. This further encourages cross-pollination of ideas and collaboration. Furthermore, set aggressive goals that require collaboration, such as the case with P&G where they expect 50% of the company’s new products to come from outside the P&G labs. This requires building a network of outside innovators, scientists, customers and suppliers to tap into new ideas and develop new products.

Also revisit your brand identity and make sure it emphasizes working-togetherness and having one-voice. The standardization of your brand image will not only improve your relationship with your customers, but will further promote a sense of one company, one organization and one team.

There is a right time for everything, including building silos

Though silos are bad, there are times when you do need them, but more clearly what they represent: an enclosed structure and/or a protective shelter.

• Prevent technology and idea contamination in situations where your competitor also becomes your partner. This is more common than you may think, especially in large organizations. It is crucial to limit interaction between your product development teams and teams that are working closely with your competitor to avoid any potential contaminations and lawsuits. It is also a good business behavior.
• Cultivating a new business within a mature organization requires tender care and protection from the big corporate mentality and culture.
• M&A process highlights the tension between staying in full compliance with government rules governing mergers and acquisitions, yet accelerating the integration process as the M&A finalizes. Utilizing the clean room concept, you can gather and analyze sensitive information from both companies, and in turn support the merger teams and accelerate the integration process.

These are certainly valid cases for building a silo and limiting communication to the outside world. However, in your organization, it is still important to maintain an awareness of why, what and how-long this silo will last. Basically, be transparent within a reason.

Technorati Tags: organizational silos, barriers to innovation, collaboration, silos, break through the silo, building a silo

This is a creative and an impressive advertisement from Sprint. Highlights how vision and talent can create something that is memorable. You can check out the Sprint flashlight-animation commercial and behind the scenes at YouTube.

Sprint Flashlight-Animation Commercial

Dreams - Behind The Scenes

Technorati Tags: Sprint Flashlight-Animation Commercial, Dreams - Behind The Scenes

The desire for growth is built into our DNA. Today, growth is not just expected but demanded from every company. Somewhere along the way, the definition of business growth skewed and became synonymous with an increase in size, number, value or strength. We have seen too many examples of bad growth driven by short-term focus on the wrong measures of performance. Classic examples are the dot-com bubble burst, Enron, implications of population growth on our natural resources, and even the growing pains felt by firms, including Google.

I found Robert M. Tomasko’s definition of growth refreshing: moving beyond your self-imposed boundaries and constraints to achieve your full potential and deliver unique value (Bigger Isn’t Always Better: The New Mindset for Real Business Growth). As he outlines, the growth process, as with purposeful change management, involves:

1. putting aside old ways of perceiving the situation;
2. leading change, first within yourself and then within the organization, towards this new perspective;
3. building capabilities to support this new perspective;
4. reorienting and readjusting your value delivery chain and ecosystem to align with this new perspective;

I previously wrote about creativity, invention and knowledge and how they are the foundation for innovation. Here, innovation, implementation of a new idea for the purpose of creating value, is the fuel for growth. And, innovation management is your control system. Combined, they will help achieve sustainable growth for your firm. So, here are the necessary conditions for sustainable growth.

• Offer clear value and benefit to the company, customers, suppliers, industry and the market through this change or new perspective. It is ultimately about people: it is a change of behavior, processes, how people work and produce work. If there is no clear and compelling benefit, it won’t stick. So build close linkages with your workforce, lead users, customers and suppliers. Strive to go beyond relationship building to achieve an emotional connection with them. As Guy Kawasaki stated, make evangelists, not sales (Rules For Revolutionaries: The Capitalist Manifesto for Creating and Marketing New Products and Services).
• Recognize that growth is not a destination, but a path and on-going process. It requires developing the needed capabilities and competencies in awareness, adaptability, and building a learning organization. It requires much mindfulness, being aware of the present moment to exploit opportunities so as to keep the bigger picture and vision in mind. At the same time, it requires effective risk management: understanding/recognizing possible uncertainties and unexpectedness’, adjusting and adapting as needed. It is about impermanence, understanding that everything changes and is in flux, and learning to let go and adapt.
• Be resilient. You’ll have plenty of failures, nay-sayers and set backs. So, build your capacity for change and dealing with change, even under negative and unexpected circumstances. I once heard that forgiveness is hoping for a better past. So, don’t dwell in your past failures. Failure is inevitable and it is part of your learning process. The key to success is to fail early, learn from it and move on with greater understanding. Just remember Guy’s coin phrase: churn, baby churn.
• Utilize both sides of your brain: don’t just be creative but also be analytical to successfully exploit the opportunity. Think out of the box, look for connections even seemingly unrelated, be open to and seek new experiences and ideas, be observative and keenly inquisitive. Know that the future is unwritten and full of opportunities. Be positive, hopeful and optimistic, regardless of the current situation. But, while dreaming big, start small, simple and with focus. Iteratively build on your previous successes, and create your future one step at a time.
• Build a culture of trust, commitment, accountability and focus on results. Commitment is key, and it should not be confused with consensus, as it is about having the courage and wisdom to move forward even when not everyone agrees. Accountability is about the personal ownership for delivering the agreed upon performance to the company and to the team. Focus on results is recognizing what really matters and what ultimately delivers value.
• Achieve the right balance between:
  • long-term and short-term;
  • leading and managing;
  • idea-generating and doing;
  • being supportive and driving the needed change, however uncomfortable;
  • providing resources/funding and placing constraints, even if they are artificial;

So, instead of pursuing the popular definition of growth, contemplate your unique value and how to further it. Whether it maybe building the next great product/service, or how you go about developing and delivering it. Whatever it is, keep the focus on achieving sustainable growth.

Technorati Tags: Robert M. Tomasko, Bigger Isn’t Always Better: The New Mindset for Real Business Growth, innovation, sustainable growth, conditions for sustainable growth

Looks like my yoga workout at home just became more fun and interactive. Take a look at the New Nintendo Wii Fit game that is planned to be released next year, maybe around New Year to encourage our newly reinitiated fitness craze? Make sure to watch their promotional video as well. I don’t quite get the Hula-Hooping, but I can certainly appreciate encouragement for doing more (and regular) push-ups.

Technorati Tags: Nintendo Wii Fit

I’m always amazed to hear what kids pick up from conversations, TV shows, books, friends, … Recently I heard my 9-year-old tell his friend that the Nintendo Wii has “bad graphics”, but he doesn’t care as he enjoys the games. Turns out he was repeating what he heard during a game console comparison on Cartoon Network. The source of this propaganda is irrelevant, but it gives us an opportunity to discuss the characteristics of disruptive innovations.

Clayton Christensen first defined the concept of disruptive technologies in his book The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials). The concepts that he described have become the reference work on disruptive technologies, particularly for large and established firms. Christensen defined disruptive products as follows.

First, disruptive products are simpler and cheaper; they generally promise lower margins, not greater profits. Second, disruptive technologies typically are first commercialized in emerging or insignificant markets. And third, leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies.

I am a fan of James Burke’s PBS TV series Connections (Connections 1, Connections 2 DVD Set, Connections, Vol. 3). In his shows, he explains disruptions occurring from coincidental inventions, changes in regulations and society, exploding demand for new products as well as growth in complementary technologies created through strange connections. With that broader context, it is possible to further define disruptive technologies and products as follows.

• They create new markets and customer segments that previously did not exist or were thought unattainable;
• They initially target underserved customers;
• They are perceived as inferior by existing mainstream customers;
• They attract early adopters and create loyal followers as they offer new performance vectors previously unmet;
• They reduce complexity and are simpler in design and easier to use;
• They specifically target breakthrough improvement in a new performance vector;
• They can require a new business model or distribution method;

Nintendo’s focus has been continuous improvement of customer experience through innovative products, such as the release of Nintendogs that enabled gamers to train virtual puppies. They also made it to the Forbes‘ list of The Top 10 Disrupters Of 2006. With the introduction of Nintendo Wii, they have seriously impacted the status quo of console videogaming especially from the perspective of how, who and why:

• how we interact with the virtual world of gaming;
• who plays with these games;
• why we play them;

With that, Wii certainly had a disruptive impact on the society and its ecosystem, which not only enabled Nintendo to change the way it competes, but also enable revenue growth through new high-value customers that was previously not attainable. It is important to note that even the name Wii was chosen to bring a sense of inclusiveness and togetherness.

Many hard-core mainstream customers might disagree that we reached a point of diminishing returns in graphics. As Sony and Microsoft concentrate on more graphics power and beefier consoles, Nintendo is focusing on changing the rules of the game by coloring outside the lines. With the motion-sensing controller, they are redefining how we interact with video games where the players take a very active part in the game, and burning calories in the process. I was personally surprised to see how entertaining Mario Party 8 is for both the players and the spectators. As the games are more interactive, parents are more willing to let their kids play the video games, and also more likely to play along.

With more graphics power and beefier consoles, Sony and Microsoft are leading the pack with more realistic graphics which are also more complex in nature. For me it is a challenge to remember all the push buttons and movements on a controller. However, Nintendo Wii’s motion-sensing controller broke down barriers by removing complexity in playing games. It made real life games, such as tennis, boxing, baseball, more fun and simple to play, thereby entering into a market, ages over 35, that was not accessible to the videogaming industry previously. Today, it is not unheard of for grandparents to buy a Wii system for themselves after playing with their grand kids.

Nintendo Wii is also opening up doors to new uses beyond gaming. Glenrose Rehabilitation hospital in Canada is using the consoles to help patients with movement and balance issues. Wii Big Brain Academy enabling all ages to participate and keep brain sharp, but also connect with WiiConnect24 to network and measure how they are doing against other kids. The educational and health-care arena is a new market previously untapped by the videogaming industry.

Nintendo has proven the validity of motion-sensing and control technology. With that, we’ll see rise of new markets and industries utilizing the motion-sensing technology, where it will be embedded into everyday technology from cell phones, TV remote controls, computers, cars …

So, when is it important for you to look for disruption in your product lines and technologies?

• Your definition of competition has been to match competitors functionality and feature set. You feel like you are fighting them in their battlefield and not making any headway towards the hill. So, it is time to look for a new hill with your own rules.
• Your mainstream customers are more interested in price than feature set or functionality. They are starting to highlight good-enough products that are cheaper from your competitors.
• You are praying for a miracle and your growth is mainly driven through mergers and acquisitions.
• You are noticing and dismissing new entrants that are penetrating your market through your under-served customers.
• You lost touch with your lead users and have been stuck in a never ending cycle of continuos improvement.
• Your market is shrinking, yet there is clearly untapped markets and customers to be reached.

Ultimately the powerful disruptive innovations are about the people. It is not as much about the impact they may have on industries or markets, but how they transform our lives. Just think back to the introduction of glucose meters and how they improved the lives of diabetics, or iPod/iTunes on how we listen to our music, or blogging technology and YouTube on enabling anyone to become the content creator and publisher, or Internet enabling globalization. Anyone, any where, any age, any skill-level now have access to the products and technologies, inexpensively, easily without dealing with the previous complexity.

There is obviously more to disruptive technologies than what we just discussed. Though the risks are high and the immediate return on investment is not obvious, with well planned technology/product management, clear focus on customer and good timing the results can be spectacular.

Technorati Tags: Clayton Christensen, James Burke, disruptive technologies, Nintendo Wii, disruptive innovations