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Archive for the tag “management”

Changes, changes, changes …

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Eric Abrahamson (2000) noted in his famous Harvard Business Review –article that “To change successfully, organization should stop changing all the time.” Today we know that almost all organizations need dynamic stability and ability to change, but if there are too many changes there will be problems to manage all these changes. Often changes cannot be implemented without pain. However, an ideal change process should happen without pain.

One way to implement changes is to create modular elements of change. If change is too big, it creates a lot of stress and pain. Small change efforts that involve the reconfiguration of existing practices and business models are often the best practices of change. If we create big and massive change processes, risks are going to be bigger that planned massive change process is going to be a failure. If we can do this, change process will be organic change, not mechanic change.

To be ready for changes, we should develop change-able and learning organisations. One of the worst barriers against organic change is keen and even active refusal of learning. If we do not want to learn, all changes will be unsuccessful. Some beings are able to learn, some others are not able learn. If we want to develop change-able organisations, we must pay special attention to learning capacity of individual and social teams of organizations.

Professor Robert W. Rowden (2001) has recognized in his scientific article that there are three types of change: planned change, implementation-focused change and readiness-focused change. All these “change types” need a special attention. Sustainable, high performance depends on organisation´s ability to respond quickly and efficiently to changing circumstances in their decision environments, which are today networks, markets and crowds. Especially, our abilities and skills to make sense of changes, matter. Nowadays making sense is not easy. We must analyse a lot of data, information and knowledge. If we do not understand the nature of changes in critical networks, new markets and emerging crowds, we are out of success. Some other organisations, which do it better, will be more successful.

Today´s organizations operate in a challenging environment. In a more complex world, change has become the constant. Just add globalisation to technological shifts and multiply it by today´s volatile economic trends and the pace of change is breath-taking. Making sense of changes is today one of the biggest challenges in organisations and companies.

We should also understand that people are very interested why they need to change. Often people are very tired of changes, before planned changes. Generally speaking, the motivation of people depends on our sense making skill and abilities. If we cannot explain, in a good way, why changes are needed, we cannot motivate people to learn new things, change their habits and find better ways to work. Motivation is a key issue in change management process. If motivation level is low, change process is not going to be successful.

In change-able organizations a way of being is different. In this kind of organisation people are able to change fast, but also they are able to manage knowledge. For such learning organisations, typical characters are: constant readiness, continuous planning, improvised implementation and action learning. These characters require training and tutoring inside organisations. They do not emerge automatically in organizations.

People resist changes for many reasons. Sometimes they want to deny the needed changes. Sometimes people are anger and they blame managers and leaders. “Over my dead body” is one typical reaction to needed changes. “This is nothing new” is another reaction to changes. Sometimes people are simply confused. Then “I do not understand what is going on” is a typical reaction.

In classical Lewin´s study “Field Theory and Social Science”, he described the tendency by people to consolidate negative behaviours as “freezing”. This phenomena is still relevant for change management. Smart leaders can find ways to “unfreeze” by right messages, implementation activities and role models.

The organisational climate of change must be created every day in companies and organisations. Leaders of today need to manage implementation in ways that protect and grow business rather than destroy the very organisational skills and motivations which offer the potential for innovation and new business models. From this perspective we are living interesting times. Many organisations are not able to survive. Some others will find their ways from chaotic conditions.

Whether you are leader, manager or worker, we can ask: is your personal attitude right and mature enought to create optimal organisational climate of change?

Further reading

Abrahanson, E. (2000) Change without pain. Harvard Business Review, July-August 2000, 75-79.

Lewin, K. (1951) Field Theory in Social Science. London: Tavistock.

Rowden, R. (2001) The learning organization and strategic change. Society for the Advancement of Management Journal, 66(3), 11-16.

How to handle decision making in the management teams? In many companies’ management and leadership processes seem to work well, but suddenly something surprising happens. In spite of many cross-checks and meetings, things turn into a non-expected direction. All think that everything was in place … but then something emerges and business plans are outdated in a day. Why this happens?

It is typical than there are always some biases in management teams of companies. It is typical that for individuals it is not easy to make question marks on official agreements and strategies. Even though all nod in agreement and look happy it is not easy to say something critical. “It was settled” or “we all agreed” are typical notes on the memos of companies in this kind of decision situations.

Raising dissenting voice is not easy – especially when the chief boss decides something. It is much easier to be among “yes-sayers” than among “critical questioning men”. Self-fulfilling prophecy is the tendency to engage in behaviors that elicit results that will (consciously or subconsciously) confirm our beliefs. “Yes men” cause self-fulfilling prophecies. There can be also a halo effect, the tendency for a person’s positive or negative traits to “spill over” from one area of their personality to another in others’ perceptions of them.

In many case studies of management processes, some typical mistakes have been identified. First, there is tendency to devote attention only to those events seen as most likely. Secondly, once the team of decision makers had made up its mind as to what was going to happen, even conclusive information that the decision was poor did not change the prediction and associated decision. Thus there is typically a problem of groupthink in management teams. One reason for this problem is homogenous social and cultural backgrounds.

Often management teams have similar backgrounds: university degree holders, men with similar hobbies, career paths, middle-class people, and homogenous values. False consensus effect means the tendency for people to overestimate the degree to which others agree with them. Sometimes there can be anchoring decision-making biases, where there is the tendency to rely too heavily, or “anchor,” on one trait or piece of information when making decisions.

Another problematic issue in management teams is overcoming overconfidence. The future looks assured for them. Their judgments are made with deep confidence. However, people may feel confident that they do know the right answer but actually don´t. They don´t know they don´t know. Other options of knowing are: (1) They do know they know; (2) they don´t know they do know and (3) they do know they don´t know. Obviously the best option would be to know that they know. In reality this option is not often available for a management team.

Third typical bias of a management team is a confirmation bias. What it means? It means that we don´t place ourselves in situations where we can test the quality of our judgment. We want to seek that information that will confirm the quality of our predictions and decisions. It is quite human character of people, wanting to be in right – winning team. In this way we are selective in our observations.

Fourth bias in management teams, is so called hindsight bias, which is connected to our readiness not learn from experiences. In general, we don´t learn from experience because experience has little to teach us. That is why our recollections of our judgmental predictions confirm these to have been accurate. Some call this bias “I-know-it-all-along-effect”. Thus, our judgments are rooted to history and it cause biases to emerge.

Fifth bias can emerge because we rely on expert predictions too much. We can call this bias as an expert bias. Also experts can cause group thinking bias and other people may suffer from this kind of bias. There are many other kinds of biases, too like randomness bias, sunk-cost bias, self-serving bias and escalation and commitment bias. Projection bias is close expert opinion bias. It is the tendency to unconsciously assume that others share the same or similar thoughts, beliefs, values, or positions.

Sixth bias, randomness bias means that there is a tendency people have to seek patterns where none exist and to invent the existence of unjustified causal relationships. It is the tendency of people to make sense out of events which are so random in nature that not enough should be read into them. Close to randomness bias is Gambler´s fallacy, the tendency to assume that individual random events are influenced by previous random events.

Seventh type of bias, sunk-cost bias is often connected to too optimistic thinking. Sunk-costs are costs that cannot be recovered once they have been incurred. Sunk-costs bias greatly affects the decisions, because humans are inherently loss aversive and thus normally act irrationally when making economic decisions.

Eight type of bias, self-serving bias occurs when people attribute their successes to internal or personal factors but attribute their failures to situational factors beyond their control. The term, “self-serving bias”, is used to describe a pattern of biased causal inference, in which praise or blame depend on whether success or failure was achieved in reality.

Ninth type bias, escalation and commitment bias means tendency to invest additional resources in an apparently losing proposition, influenced by effort, money, and time already invested. The term is also used to describe poor decision-making in business, government, information systems in general. Escalations and commitment biases are typical in software project management, in politics, and in addictive gambling. To sum up: there are 9 key sources of bias in management teams:

• Overcoming overconfidence;
• Group thinking bias;
• Confirmation bias;
• Hindsight bias;
• Expert opinion bias;
• Randomness bias;
• Sunk-cost bias;
• Self-serving bias and
• Escalation and commitment bias.

It is good to be aware of these potential decision making biases in decision making situations. We could avoid these typical biases, if we were aware of these potential biases. The lessons from history can tell us that many management teams do not identify these biases and serious management failures happen. A sad truth is that we don’t always learn from experiences. There are very many historical lessons available for decision makers but we should learn something from these old lessons. From this perspective “learning organization” is a modern myth.

There is need to question some issues (and biases) in many management teams. That why bohemian persons and “out of box” thinkers may be very valuable members in management teams. It is easy to say that we should be free of biases, but in reality we are often slaves of biases and fallacies. Only personal and critical reflections can help us to be free from these biases. Open and critical discussions in management teams should be encouraged and supported too. Daily illusions about effective control should be avoided in all the decision-making situations and processes.

Further reading

Wright, George (2001) Strategic Decision Making. A Best Practice Blueprint. John Chichester: Wiley & Sons.
Goup 3: Bhavesh, Brunica, Deepak, Kane, Kiran, Lisette & Monica (2012) Biases in Decision-making. Web: http://www.scribd.com/doc/21613064/Biases-in-decision-making
Scribd, “gaea_myzticmoon” (2012) Biases. Web: http://www.scribd.com/doc/73002909/Biases

Bohemian X Factor: Bohemians and Future Management of Organizations

Sometimes you hear people say: “That person cannot be lead”. It is very likely that in this case one refers to a slightly bohemian person. Bohemian people are often willful, dissidents, original, differ from ordinary habits, and have many rich ideas. They do not “sit” inside “organization chart” very easily. From the point of management view, they can show themselves be in response “against everything”, with which management team is difficult to get along with. On the other hand, these individuals could have a lot of good ideas and promising novel innovations for different type of organizations.

In societies, there are some evolutionary principles which matter. Especially two evolutionary principles matter. First, there is to be a producer of variety. Secondly, there is a filter of variety. Variability is a key factor of evolution and development. Life is at the transition between order and disorder. This is a critical issue for organizations too. Too structured organization may be problematic, but also too unstructured organization may also be problematic. To manage any kind of organizations, one must pay attention to variability factor.

To be effective, any organization should be composed of different types of people. If your organization is consisting from very similar type of people, it undermines the organization’s efficiency and development capacity. Also productivity of an organization can be much lower than if the organization would have different types of people working in the organization. Rigid group thinking can prevent the organization from implementing changes in the needed operating speed. In this non-optimal case an organization remains inside a comfort zone. No one in this kind of organization is necessarily interested in new development issues and challenges. The members of intellectual elite do not want to work in these kinds of non-dynamic organizations.

Surely it is easy to agree with that all the new challenges and opportunities will live their own lives. These kinds of organizations keep their historical traditions and their good “rituals” and old habits. In this case an organization may become too structured. There are not only “technological lock-ins” but also “social lock-ins”. However, over time, this “rigid structure” management style may become dangerous for an organization, if new ideas and challenges are not seriously discussed inside the organization. Little by little an organization becomes blind to essential changes in their social environments and competitive markets.

How rigid group thinking can be avoided? Perhaps the previously mentioned bohemian people should be taken more seriously? How one should lead them? We know very well that bohemian persons do not like steep hierarchies, nor the rigid line or “silo” organizations. Hierarchical culture, bureaucracy, and rigid organizational boundaries should be avoided, if the intention is to get a Bohemian X Factor serving the organization. Bohemian X Factor helps organizations to take all the real future challenges of change into consideration. Effective change management requires participation of bohemian persons. Dynamics of organizations require that management professionals understand Bohemian X Factor.

Tight authorial orders to bohemian persons do not work in the bohemian organizational culture. In the worst case scenarios of organizations, bohemian people become “mind terrorists” and critical opponents for hierarchical and bureaucratic organization cultures. Wrongly treated bohemians can even attack companies and corporations – in the real life, but also in the social media and in various other Internet environments.

A better mobilization of Bohemian people’s intellectual capital is a very important strategic thing for the organizations of creative class. Often, bohemian people are very goal-oriented. Bohemian people appreciate the creative thinking and real-life problem solving. The active generation of new ideas is important challenge for them. That is why it is important to listen to them carefully. In this case the management emphasizes access to different types of organizations, work cultures and also alternative cultures. The best option would be to have very open mind and also open communication, which is applied for open dialogue and open debate in different social contexts. The variation of opinions matters. Only after these open communicative processes the Bohemian X Factor can get involved in the development of organizations.

“The war for talent.” will not be won without Bohemian X Factor. Thus, a talent management system must be worked into the business strategy and implemented in daily processes throughout the organization as a whole. If bohemian persons are not recognized in business strategies, we can expect problems in the implementation of business strategies. Companies and agencies that engage in talent management are strategic and deliberate in how they attract, select, source, train, develop, retain, promote, and move people through the organization.

It may also be wise to simply delegate new R&D projects to bohemian experts and allow them to perform tasks independently and self-directed. In this case, change management means that leaders find talented people to prepare and implement challenging projects. It might be wise to develop flexible rather than rigid organizational structures, and fast organizations to move on. This approach does not allow firm turfs inside an organization. Leadership role should be a gathering of hot teams and manage these teams.

Already Socrates in ancient Greece taught that the inspiration of poets is an essential form of enthusiasm. Key challenge of bohemian talent management is to produce and keep enthusiasm level as high as possible. If the enthusiasm capital is lost, a lot of intellectual capital is lost inside an organization, but also in a society.

Index

1 Variety
Web: http://en.wikipedia.org/wiki/Variety
2. Bohemian
Web: http://www.wikihow.com/Be-Bohemian
3. Talent management
Web: http://www.taleo.com/researcharticle/what-talent-management
4. Socrates
Vlastos, Gregory (1991). Socrates, Ironist and Moral Philosopher. Ithaca: Cornell University Press.
5. Enthusiasm
Web: http://en.wikipedia.org/wiki/Enthusiasm

Innovation Flow: A Process of Making a Difference

One of the most puzzling mysteries of contemporary culture is how do changes in style and taste come about? Who are those people creating changes? There are some predictable socio-cultural patterns behind trends which shape our futures.
F. Scott Fitzgerald, the famous “boho of jazz swing time”, noted:

The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.

Boho people are able to live with paradoxes and ambiguities. The rational one variable model is not a key issue for the bohos. Without bohos, it is not possible to lead an organization towards excellence because excellence requires the ability to live with paradoxes and ambiguities. Bohos can live easily with ad hoc groups, playfulness, temporary structures, hubs, unusual weak signals, technology of foolishness, shadow organizations, skunk works, cabals, wild cards and unjustified variations.
We know that trend creators and trend setters are not the most conventional people. Often they are bohemians (bohos), or geeks or even freaks. They are extremely innovative and inventive. They are not prisoners of the past. They are children of the future. They invent the future. That is why Richard Florida and other city researchers have invented “tolerance index” because they have found that bohos are needed for innovations, development and economic growth. The bohos create the bohemian city.

These groups of people are not big groups, but they are small special groups in our society. Trend creators are not homogenous group, they are very special personalities. The anatomy of emerging trends is based on trend creators and trend setters. There are both micro and macro trends. Some people create new ideas and inventions and trendsetters want to adopt these ideas and inventions.

These two special groups are at the very top of the trend model. Very often these groups are having many bohemian people – people who do things in a different way – going “out of box”. “Out of the box” is an expression that describes nonconformal, creative thinking. These people are responsible for creating or doing something special that can offset the trend.

Trend creators and trendsetters must have the potential skill that is the basis for both emotional and social intelligence. The mind involves a flow of energy and information. Some people talk about the innovation flow. Innovation flow is a psychological issue, the foundation of all innovations. It is a very interesting psychological issue, because it is a fundamental source of new ideas and inventions. Energy is the capacity to carry out an action. Energy is moving out limbs or it is an embowering though. Ability “to do stuff” is a key issue for changes in our society. Energy, information and innovation are inter-related issues in an innovation flow process.

There are many forms of human energy. We can feel radiant energy when we sit in the sun. We can use kinetic energy when we walk on the sunny beach or go for a swim. We can utilize neural energy when we think or when we talk or listen, or when we read. By definition information is anything that symbolizes something other than itself. Energy and information are complementary things in a dynamic innovation process. Without energy and information it is not possible to develop new ideas and introduce new inventions. Energy and information go hand in hand in the movement of our mind and mindsets. Our minds regulate innovation flow as well as energy and information flows. We can feel the reality of these two forms of mental experience.

We can feel energy levels and rich information flow. These two critical elements, energy and information are always present in an innovation process. We can even claim that energy and information flows create innovation flow. Because they change across time, we can sense their movement from one movement to the next movement in a dynamic, fluid and moving process. The mind´s regulation creates new pattern of energy and information flow.

Thus, we are not just observing these moving processes. We are both monitoring and modifying. The mind is real. Also our mindsights are real. The mind is a regulatory process. The mindset is creating many regulatory processes. Without strong mindsight, life becomes deadened.

It is possible to create a culture where mindsight is absent. In this kind of society we can become stuck in the physical domain, blind to the internal reality at the heart of our lives. In this kind of society no new ideas and inventions are created. Blind minds cannot lead the change. A blind mind cannot lead other blind minds. We must have bright minds and mindsets. Bright minds with energy and information flows are the foundation of innovations and innovation dynamics.

Thus, big challenge of innovation management will be deeper understanding of innovation dynamics of contemporary network organizations, fast companies and mega corporations. Understanding innovation flow, bohos, boho team dynamics and the origins of trends will be long and fascinating intellectual journey for us.

Sources
Innovation Flow
1 Web: http://innovationflow.blogspot.com/
Swing
2 Web: http://en.wikipedia.org/wiki/Swing_music
F. Scott Fitzgerald
3 Web: http://en.wikipedia.org/wiki/F._Scott_Fitzgerald
Paradox
4 Web: http://en.wikipedia.org/wiki/Paradox
Ambiquity
5 Web: http://en.wikipedia.org/wiki/Ambiguity
Ad hoc
6 Web: http://en.wikipedia.org/wiki/Ad_hoc
Weak signal
7 Mendonça, S., Cunha, M.P., Kaivo-oja, J. & Ruff, F. (2004) Wild Cards, Weak Signals and Organisational Improvisation. Futures. The Journal of Forecasting, Planning and Policy, Vol. 36, Issue 2, pp. 201-218.
Hub
8 Web: http://en.wikipedia.org/wiki/Hub
Out of box
9 Web: http://en.wikipedia.org/wiki/Thinking_outside_the_box
Mindsight
10 Siegel, D.J. (2010) Mindsight: The New Science of Personal Transformation. New York: Random House.
Dan Siegel
11 Web: http://drdansiegel.com/
Trend
12 Vejlgaard, H. (2008) Anatomy of a Trend. New York: McGraw-Hill.

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