Celebrate your culture
as a source of reliability (updated)

Lots of folks confuse activity with adding value. Billions in currencies vapourized in the dot-com meltdown because of that singular confusion. See my post on that. Or better yet, see Venessa’s. Because innovation is much more art than science, it ties in perfectly with the most effective approaches to reducing risk. If your first question was “what kinds of risk?,” then read on, this post is for you!

The best business ideas leverage interpersonal communication in a transaction, it’s the difference between HTC and Apple.

HTC is an extremely innovative hardware company, their current focus is smartphones. Apple is an extremely innovative “emotional experience” company, driven by deeply esthetic software, which makes hardware on the side to exploit the software that is their core sales vehicle.

In the David vs Goliath story, David picked up not one stone, but five. He was ready to take on not just the big-man-of-the-valley, but his brothers as well. Apple’s fabled growth from their role as little David vanquishing the Goliath of Redmond is a story of doing a few right things so very right that people overlook the shortcomings. (Yes they have shortcomings, because the company is composed of people and every person, every business has them).

Apple’s strength is not their “ecosystem.” That media darling word needs to be put out to pasture with

to people who grow up with a different worldview, possess little in common with our cultural norms and have strongly differentiated accents from those calling. Minor things like that were the residual risks that doomed off-shoring to such a checkered history and have given life to the lean reshoring movement.

Apple’s genius has been that they have delivered “effective theatre” (one use of this verbal shorthand is “the emotional experience involved in promoting a personal brand”) just like the soldiers in the classic fable Stone Soup. Apple has produced stunningly beautiful designs with captivating features, with the market success that is well deserved. Just free yourself from any impression that they’re innovative (hw/sw). My circa 2005 Compaq tablet always, I mean every single time, will start a conversation when I’m in an airport or other locale where mobile computing predominates.

“Loosely coupled” companies

The term “loosely coupled” came into vogue with service-oriented architecture a few years ago, meaning an entity or system stands fine on its own, but when linked to other like systems, the magic happens. Cloud computing is paving the way for the loosely coupled company – which may be an entity that exists purely as an aggregation of third-party services, provided on an on-demand basis to meet customer demands. Forbes, 19 Sep 2011, McKendrick

A key to innovation is to recognize aspects of the familiar even when they’re labeled with new terms. Another way to describe the loosely coupled corporation is as a “system of systems.” Karl Weick’s fabulous Making Sense of the Organization, captures the essence of this in just a single page, which I’ll excerpt. Quoting John Gall, Weick writes:

“If you go down to Hampton Roads or any other shipyard and look around for a shipbuilder, you will be disappointed. You will find-in abundance-welders, carpenters, foremen, engineers, and many other specialists, but no shipbuilders. True, the company executives may call themselves shipbuilders, but if you observe them at their work, you will see that it really consists of writing contracts, planning budgets, and other administrative activities. Clearly, they are not in any concrete sense building ships. In cold fact, a system is building ships, and the system is the shipbuilder.” Weick, Making Sense of the Organization, p.337

One of the most remarkable aspects of infancy is the stunning rate of growth and change. Yet somehow we come to the conclusion that rate of change somehow levels off and we can have things “just as they are” or “just the way we like it.” I put a twist on John Maxwell’s saying, old age and wisdom aren’t twins. Sometimes age arrives alone. Like a Paisley tie, there is beauty in the complexity of healthy relationships that takes Emotional Maturity to appreciate and Emotional Intelligence to contribute to the well-being and growth of friends, family and colleagues.

People are so much smarter than they know and it comes from [fancy words alert] culturally embedded systems. The fancy words for “tribal knowledge” are “culturally embedded decision structures.”

People intuitively understand that words take effort, thus all cultures develop their own shorthand or “tribal knowledge,” so they don’t have to restate common agreements and understandings on every encounter. Culture is a shorthand of how we behave, yet the other side of the coin is that our transient teams or “loosely coupled” companies need to explicitly understand the depth of the cultural artifacts that they are mixing, or the unspoken assumptions become a recipe for disaster.

We all smile when we hear the phrase, “the more things change, the more they stay the same.” The lesson in that truism for problems of reliability is that sameness is a function of change. For a relationship to stay constant, a change of one element must be compensated for by a change in other elements…

People aren’t used to giving praise for reliability. Since they see nothing when reliability is accomplished, they assume that it is easier to achieve reliability than in fact is true. As a result, the public ignores those who are most successful at achieving reliability and gives them few incentives to continue in their uneventful ways.

Weick, Making Sense of the Organization, p.337,“Reliability as enactment”

Emotions

Emotions are thousands of times more efficient at encoding information than either spoken or printed words, which is why people speak of the need to be in the presence of another to truly trust them. On top of all that is Reagan’s famous quote: trust and verify.

The massive amounts of information exchanged non-verbally by voice, eye, inflection, intonation, gesture and pacing, all of these contribute to culture as a significant indicator of reliability and thence a measure or predictor of risk. I’ve continued to refer to Weick’s work for over a dozen years. Making Sense is worth the read. If you have to focus rather than read the whole work, Chapter 14 will give insights that you can mine for a lifetime.

Solving Residual Risk Means
Accounting for Culture

When you’re going after the risks you know from experience are elusive, rare, hard-to-find or the toughest of all: those risks discounted by your “experts,” then you’re going to have to look beyond the obvious. This level of achievement can start with a checklist, it’s like training wheels on your first bike.

An evidence-based need to go beyond the obvious

The health care industry loves the term, “evidence-based.” The fact that a respected medical doctor can reach best-seller status with a book that says at heart “use a checklist” is as much evidence as any astute observer needs of the overwhelmingly linear thought process prevalent in today’s healthcare culture. What is heralded as breakthrough thinking in healthcare is routinely expected of, and delivered by, sophomore engineering students. Thanks to Martin Frey for pointing me to Thomas F. Gilbert’s Human Competence. Gilbert demonstrates discrete monitoring of high-skilled workers is not only possible, but more effective through blending hard science data, engineering discipline and a deep commitment to valuing people.

The residual risks in health care aren’t so much what is said but was is not. You can only assess what you know. One of the biggest risks in any organization, medical or otherwise, is the hubris, the lack of sophrosyne that comes from “knowing” that your way is the only way.

Lance Armstrong is beyond training wheels. {as of Jan 2013!} You will progress beyond the training wheels of a mere checklist, as you gain maturity in accounting for not only YOUR OWN company culture, but expanding the scope to include the cultures of every player in your extended value chain.

Making meaning is an issue of culture, which is one reason culture is important in high reliability systems. …

Before you can decentralize [read: operate in “loosely coupled” fashion], you first have to centralize so that people are socialized to use similar decision premises and assumptions…

This is precisely what culture does. It creates a homogeneous set of assumptions and decision premises which, when they are invoked on a local and decentralized basis, preserve coordination and centralization. Most important, when centralization occurs via decision premises and assumptions, compliance occurs without surveillance. This is in sharp contrast to centralization by rules and regulations or centralization by standardization and hierarchy, both of which require high surveillance. Furthermore, neither rules nor standardization are well equipped to deal with emergencies for which there is no precedent. [Emphasis added.] Weick, Making Sense of the Organization, p.338

Oh, but that’s hard!

All Hope Abandon, Ye Who Enter Here

Image: danteinferno.info


If you’re not ok with losing all hope, with losing eight billion dollars of your shareholder’s assets (for example), then start celebrating success as defined by [nothing happened] and your residual risks are soon to be resolved. And THAT is reason to celebrate!

As ever, Carpe Diem!,

Matt

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as a source of reliability (updated)

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