23 June 2011

I Like Frogs!

The Knowledge Management Leaders Forum (KMLF) hosted Nigel Paine in Melbourne last night and what a great night of introspection, conversation, exasperation and revelation it was!

Nigel (@ebase on twitter) is an international management consultant with leadership experience in KM at places like the BBC. See his profile here.

Nigel spoke about teams or businesses being more like a frog than a bike. You can't just pull a frog apart, put it back to together again and expect it to work the same. When teams are forcefully manipulated, people fired without notice, changes made to the leadership structure, there is a residue left over. A lot of times that residue is lost trust and a fear of what could happen in the future. As a result people are only capable of working at a reduced capacity.

My favourite statement of the night went something like this:
"We spend millions getting 3% business improvements from systems like SAP when research shows many people operating at only 60% efficiency. We will simply be forced to start learning how to manage people to get the most out of their talents."

Of course saying this and knowing that our people are actually people, not machines is one thing.
Translating that in to how a CEO actually makes a business or division run is something else altogether.

Nigel and Shawn Callahan mentioned a few good books for those seeking to get their heads around these issues and start learning how they can configure their business to get the most out of its people.
Finally, he talked about the coming death of what he called tactical HR - those HR departments simply focused on transactional, hiring and compliance issues. He foresees a continual frustration with companies thinking this way about their staff and seeing Talent as something held by people they haven't hired yet.

Instead there is a definite kinship between Knowledge Management and Strategic HR Management, focused on getting the best out of everybody in the business. About helping people grow and fit their vocations to the betterment of the company holistically, not just the bottom line.

If you would like to hear more about Nigel, visit his Blog here. A Storify summary of the evening can be found here.

KMLF meets once a month in Melbourne. You can find all their details and up-coming meetings on Meetup. We welcome newcomers and after tonight I hope we get a few more strategic HR people coming along to explore how they can become agents for strategic change in their businesses.

16 June 2011

Examples of Complicated and Complex in Business

This morning I was asked by a friend for an example of complicated and complex systems/procedures in business. I threw back this small example to him.

Do you have a few to add of your own? Please let us know in the comments below.

Hi mate. It's not one or the other, but a sliding scale.

Examples in business:
Simple: Buying stock from Bunnings. Margin Low, Risk Low.
Complicated: Buying stock from multiple vendors. Margin Medium, Risk Low.
Complex: Buying Stock from eBay. Margin High. Risk Medium.

Basically, the definition of Complexity in business is where there are multiple forces at play, one or more hidden and some interacting with others.

The way to operate in the Complicated is to set good procedures that ensure the lowest cost vendor is used each time when stock and forecasted demand are taken in to account.

The way to work in the Complex is to focus on improving:
1) your awareness, both of new stock on eBay, and future possible demand requirements, and
2) your adaptability, including contracts that stipulate slightly different materials may be used depending on availability, different stock-keeping procedures which change based on constant review of market forces, and workers having access to refinishing tools to touch up incoming stock that is damaged or below quality.

11 June 2011

Moving towards your goal in a complex environment

In my Complexity and Go talk, I use the analogy of Inline Hockey to make my point about the difference between the words "Management" and "Control" in a complex environment.

Some of you know I started coaching Inline Hockey to be more involved with my son's chosen sport. It has become a passion and I love helping the kids (U14s, and some other Jnr teams) to develop in to their full potential, both personally and as a team.

At high levels of the sport, if you were to video and study the movement of the puck as it moves forward toward the goal you would notice something. Far from travelling in a straight line, or even a zig-zag, it follows quite an erratic path. Not only do the opposition players get a stick to it, it also bounces off players skates, the boards, assorted other body parts, the Ref's skates and from time to time, the player's own stick.

Isn't this a problem? Surely more control is better? Simple maths says a straight line along would get you to your goal faster right?


Part of the problem with those statements is that simple (Newtonian) maths doesn't apply to complex environments where many co-evolving variables are at play, not all of them in view.

Then who is in control of the pucks direction? Does the player just skate hard and leave the rest to chance? Of course not. To break that question down in this way suggests more control is required. But more (conventional) control actually decreases the players chance of getting the puck in the goal!

My son Niko is pictured above after stealing the puck from two New Zealand attackers. Notice he has tapped the puck but doesn't leave his stick on the it at all. The All-Black on the left has just slashed at the puck but Niko has moved it away so his launching leg protects it and takes the blow. The stick of the opposition player on the right is swinging around to smash the puck away. A split second after this photo Niko deflected that stick with his own, kicking the puck forward with his back leg, then bouncing it off the boards around a New Zealand defender for a shot on goal.

Now consider the traditional "more control" notion of keeping the puck on the stick at all times. Now the opposition player not only has to hit the puck, he can hit the blade or shaft of Niko's stick, his hand, arm or even shoulder and the puck will fly away beyond his reach. Not only that, while concentrating on puck control, Niko would lose his greatest weapon in protecting external influences on the puck...his own stick!

In the complex environment of a hockey game,

This concept is captured in the concept of Obliquity. The idea of taking an indirect approach to achieving your goals.

John Kay says "The most striking instance of obliquity in business is the profit-seeking paradox, which is the idea that the most profitable businesses are not the most profit-oriented" and this doesn't just apply at the upper strategic level of business. "Those who assume an oblique approach tackle problems whose natures emerge only as they are being solved" and this applies to almost all situations where some of the factors are not fully known.

The journey from Simple to Complex
Young players new to the game (just like new Go players or business people not used to complex environments) try to achieve this sort of complete control. In hockey they aim to keep their stick on the puck at all times.

In business, more metrics are called for, KPIs implemented and enforced, robust fail-safe systems employed. This gives them a sense of security and for hockey players at least this seems to be a right of passage. A player needs to know how to control the puck directly before he can learn how to "massage" it in the general direction in a series of seemingly happy accidents.

How can we apply this to business?
Maybe this right of passage is the same in the business world? Not all situations are complex that's for sure and even ones that are, can have simple parts that can be controlled with a quality system or better procedures and metrics. The big difference with complex environments is that although patterns emerge, each new situation is subtly different. Metrics still apply, but now they need to be instantaneous. Success isn't about what worked last time and measuring to ensure you are doing the same way this time. Success instead is about measuring as much as possible about the current environment so you can mindfully and constantly adjust your course of action.

10 June 2011

Talking Complexity and Go with Creative people

I recently had the great opportunity to share my talk on Complexity and Go with the Melbourne CPX group (The Creative Performance Exchange).

It was a wonderful morning with broad variety of backgrounds in the room and it was fascinating to see how differently people dived in to the game and then drew the concepts together. Go really is an amazing window in to how complexity theory can be both understood and used in our vocations.

There were quite a few tweeters in the group and Nicky Hayward-Wright was kind enough to collate everything about the morning, including all the tweets in to a storyline. It gives a really good picture of the morning and which parts people thought important.

I really do just present a few concepts and facilitate this presentation. It is the Go Board itself that does all the teaching. I find the people who dive in and play and fail as quickly as possible are the ones that not only learn the most, but walk away with a stronger idea of what complexity really is.

I have evolved the way I present this talk since I first did it two years ago. While it is a very immersive experience, you can browse through the latest presentation below to get a grasp on the game and the key concepts.

I can't wait to do this with a larger crowd at KM Australia in July. Hope to see you there. In the mean time if you would like to try Go, you can do an online tutorial, download an iPhone app and even play online against people from around the world of all different strengths on the IGS of KGS Go Servers. You will find me on KGS as "kurokaze20", please say hi and challenge me to a game.