Innovation inhibitors in corporations – modern reality

I see “innovation campaigns” and change management initiatives all of the time in corporations. Most of them never achieve any positive results. In the worst case, failed change management initiatives increase cynicism and depress morale further.
Innovation and change, like morale, are things that all leaders in all corporations will agree they always need more of. However, innovation and change are very slippery items. Like the wind, you know they are there, but they can head in all directions, and are difficult to steer, and even more difficult to capture and grow.
Having watched the trends in IT solution delivery and service provisioning in corporations in the USA and Europe for over 30 years, I have come to some conclusions about why so many corporations are currently struggling with innovation and change initiatives.
Leaving aside the approaches to fostering innovation, which are often bizarre and superficial, there are several underlying current pervasive dynamics that have the power to totally derail all attempts at fostering innovation and implementing organizational and/or cultural change.

1. Psychological Safety
One of the best ways in which a corporation can ensure that innovation is suppressed is to make it clear that the reward for taking risks or attempting new approaches is to be penalized by Exile or by being made redundant. The organization shows little or no tolerance for failure.
This article explains the concept of psychological safety extremely well.
It is up to leaders to create a climate where taking risks is not immediately shut down, and failures of innovation are not immediately punished. Whenever I hear leaders commenting to the effect that “our culture is risk-averse”, I immediately begin to worry that they are stewards of a climate where nobody with any sense of self-preservation is likely to propose any sort of innovation or change.

2. The offshore delivery work fiction
Most IT delivery organizations have been relentlessly reducing staffing levels for decades, often sending work offshore, where it is often performed poorly, at which point the remaining onshore team members have to “paper over the cracks” in order to elevate quality levels to an acceptable level for the client or end-users. (By the way, this “acceptable” level is often way below the previous quality level that was provided to the client). The result is a corporate fiction that the work is being performed offshore. In reality it is being bodged offshore, and fixed up onshore by a small number of over-worked resources. Those resources are usually too busy to even think about visiting the restroom, never mind engaging in innovation.

3. Reduction in SME coverage and predominance of tacit knowledge
Over the last 15 years I have seen groups progressively slimmed down to the point where only one person is a SME for key areas of the solution. If that person is (say) killed in a road accident this upcoming weekend, the organization will be in a dangerous place starting on Monday.
However, a one-person SME, in the current climate, will not willingly train another person to be a SME, since that introduces a risk (as the SME sees it) that the organization can WFR them in favor of the newly-trained SME.
If the request is to train an offshore person to become a SME, well, if you are the corporate leadership expecting willing participation from the onshore resources, you are below naive.
Ditto documentation of processes. When a person perceives that their employer is looking for an excuse to WFR them, they are going to make damn sure that their business and technical knowledge remains implicit and tacit, not explicit and documented. The default in that sort of climate is that Knowledge is Indispensability. It is probably not true, but that is how employees will see it, and, like just about any employee, they will behave in a “circle the wagons” way to protect their position.

A culture of innovation, like credibility, requires constant renewal and attention to detail. Just as credibility can be severely or degraded by one perceived failure to deliver on promises or committments, innovation interest and engagement can be severely impacted and driven down to zero by one incident where innovators were seen to be punished for failures.


The “government is so inefficient” shibboleth

Amongst self-identfied conservative and fans of what they term “small government”, it is almost an article of faith that the private sector is more efficient than the government.
(ASIDE – there is a good reason why I used air quotes in the above sentence, since I long ago noticed that many self-confessed fans of “small government” are only fans of that idea when they come across the government spending money on Stuff They Do Not Approve Of, otherwise they are perfectly OK with governments spending money. Lots of money).
One of the classic ways in which people instinctively opposed to government try to bolster their arguments is by pointing to the ineffiencies and waste that occur in IT projects within government. If they are better-informed, they usually throw in one or two notorious examples of pas failures that made it into the public domain.
There is only one problem with the argument.
The private sector is just as inefficient at IT solution delivery. In fact, based on my being involved with both the government and public corporations over the last 38 years, I can state anecdotally that waste, inefficiency, duplication, bungling, cost overruns and out of control projects are just as common in corporate IT. Some of the worst and most expensive failures that sort of made it into the public domain (such as the Confirm travel industry program), consumed hundreds of millions of dollars for next to no result or value.
There is, however, one big difference. Failures in corporations are more often and easily swept under the carpet or into a box marked “amnesia”. I have seen multiple instances of failed delivery programs being carefully spun as successes, “re-scoped”, or subjected to any one of a number of soothing outbreaks of corporate Doublespeak, in order to pretend that the whole damn thing never really happened.
In the case of government, especially at the state and federal level here in the USA, that tends to be less easy to manage, since elected representatives like nothing more than to rake government officials and leaders over the coals in public about a waste of taxpayer’s money. It is a form of ritualistic blood sport, allowing said elected representatives to preen, strut and intimidate in front of the media, as they engage in virtue signaling to their electorates that they are Relentless Stewards of The Public Purse.
Whether those public ritualistic floggings actually yield any positive results is doubtful. Excoriating in public is never a positive motivational strategy; it is about one half step removed from the old saying “the beatings will continue until morale improves”.
The underlying point here, however, is that when people complain about “waste” in government IT, they are conveniently overlooking that the levels of waste are just as bad in the private sector. The truth is that the issues with large-scale IT delivery are many and difficult to solve, no matter where the projects are being executed. Software development and delivery as an activity stream just does not scale well.


Doubt and caveats and their role in trust building

A number of years ago, I was fired off a consulting gig.
Anybody who is a consultant knows that this is always a possibility. Consultants are hired guns, and can be un-hired, sometimes on a whim.
I tend to think that, to use an old sports coach joke, there are two types of consultants; those who have been fired, and those who will be fired.
The manner in which I was fired from this assignment (no, I did not get fired from my employer – the client simply rejected me) was a story in itself, mainly because of the bizarre way in which it was communicated.
However, one of the reasons that was given to me was that I was “too non-committal”. Apparently this was because, when asked if my team could do something that had not been previously agreed, I would say “let me evaluate that and I will get back to you”. To me, this was commonsense. I had a full plate of transition for a Testing tower. If I had said Yes to everything, I would have been an integrity-challenged fool.
The problem was that many of the people working on this transition from in-house IT to a service provider (my employer) were from India, and their cultural instinct was to say Yes to anything they were asked to do. So, the client would go to another group, and ask “Can you do X?” and the Indian delivery teams would say “yes of course”. Then they would go away and try to work out exactly what it was they had said Yes to (I kid you not. Myself and a work colleague actually overheard them around a coffee machine trying to decide what they had just said Yes to after one meeting. Amusing and frightening at the same time).
So, according to the client, I was not helpful, because I was non-committal.
I was reminded of this when reading this essay about how doubt build trust. To me, the basic idea is somewhat obvious. Especially when you consider the historical contempt that people profess to hold for “yes men”. However, many people say Yes to loaded or leading questions when they should demur or ask for time to reflect. I routinely say “let me think about that for a moment” when asked questions. If people think that makes me slow, or dim-witted, well, I guess they can think that while I go on my merry way.


Narcissistic leaders – sycophant archetypes

One of the obvious co-morbid behaviors of narcissists is that they surround themselves with sycophants, who are in place specifically to do their bidding.
In the world of showbusiness, the collection of sycophants became known as an entourage, and many celebrities became notorious for the size and bad behavior of their entourages.
In the world of business, entourages are less common, but still can be observed.
However, more commonly the narcissistic corporate leader surrounds him or herself with trusted people who will enable their leadership style, wants and needs. They may not walk around as a pack in public, but everybody soon works out who the sycophants are. This is usually easy to determine, because they go with the leader wherever the leader goes. Within days or weeks of arriving at his or her new job, the sycophants show up, often with new roles for the new shiny improved organization that the leader is usually loudly and rapidly implementing.
The team members for Team Sycophant have to meet some rather elementary behavioral criteria:

– Obeisance
Expected to unquestioningly obey the leader at all times, no matter how bizarre the demand might be

– Unconditional loyalty
Expected to show total loyalty to the leader at all times, publicly and privately

– Impervious to any message not coming from or approved by their leader
Expected to ignore any and all pushback and dissent, and merely to repeat the leadership directions and mantras

In return, sycophants are often very well-paid compared to other members of the corporation’s workforce that their nominal level. However, they owe their position almost entirely to the narcissistic leader’s whim. Narcissistic leaders have a habit of whimsically changing their minds, so sycophants, like courtiers in a medieval monarchy, can fall out of favor and be dispensed with (although, fortunately, literally losing one’s head is not their fate today). A significant portion of their exaggerated remuneration has to be seen as “danger money”.

Sycophants that are brought in by the narcissist fall into one of four general archetypes detailed below.
Sometimes the roles and archetypes are combined. Frequently, the Enforcer and Hatchet-man are the same person, because of the overlap in the required behavior pathology. Sometimes the narcissist retains the role of hatchet-man.

1. The Doer
Doers are the troops for the narcissist to impose his or her will on the corporate group. They are usually young, inexperienced, obedient, and they present themselves as the palatable alternative to the Enforcer. Their interactions become a variant of “Good Cop, Bad Cop”. They would probably not have a role in the organization if the narcissist was not present.
Narcissistic leaders often have a bench of Doers that they can call upon to replace members of the narcissist’s new organization who quit or who are dispensed with.

2. The Enforcer
The Enforcer’s role is to neutralize or eliminate all dissent and ensure total committment by teams to the execution of the leader’s demands. This is achieved by a mixture of intimidation and bluff. The elimination of dissent is usually unsubtle, comprising warnings that dissent will not be tolerated, followed swiftly by the exiling or termination of dissenters. The exiling or termination approach also extends to any team members deemed to be “not with the program”, i.e. insufficiently committed or capable. If they are dispensed with, they are replaced by one or more Doers.
The Enforcer is usually an older person, experienced in project and program management.

3. The Hatchet-man
The hatchet-man is the appointed executioner for the termination or elimination of people who are deemed to be no longer of any use to the leader. This usually involves firing the individuals. The hatchet-man may also be the person responsible for implementing other punitive actions designed to drive out dissenters, such as the elimination or bonuses, denial of benefits, promotions etc.

4. The intellectual
The Intellectual is on payroll to provide concise, plausible-sounding published rationalizations for the actions and direction of the leader covering two main areas:
– Deal Making
Narcissistic leaders often lack any appreciation of strategy, especially if (as is common) they derive their main enjoyment from deal-making. The main strategy of a deal-maker is to make the next deal bigger, and splashier than the last one, or to increase the number of deals, which usually translates to bigger revenues for the employer. The intellectual can provide a convincing post hoc rationalization of the deals that gives the appearance thay they are part of an overall strategy
– Explanation of change orders
Narcissists, lacking impulse control, are prone to issuing demands for changes that are impulsive (i.e. not even half-baked), and expecting immediate action. The intellectual has the job of creating explanations and justifications for the change demands that appear to make sense to an observer that either does not understand the pathology and process at work, or who lacks an inquiring mind.
The Intellectual is often affable, collegial, and, unlike the other three archetypes, superficially collaborative. However, they are still working for the narcissistic leader, and they have no interest in doing what is right, good and proper. Their job is to provide intellectual cover for whatever actions or directions have been demanded by the leader.


Uber and the Dot Com meltdown – deja vu all over again?

I arrived in the USA in the Fall of 1998, at a time when a revolution was being plotted in start-up rooms, and pitched to eager venture capital firms and private wealth funds.
What was to become known as the Dot Com era was beginning. With the appearance of usable web interfaces around 1996, the Big Idea that germinated in boardrooms was that all manner of business interactions, instead of being conducted face-to-face in what were termed “brick and mortar” locations, or via telephone, would occur via web sites.
The premise was that disruptive innovation was coming to business with consumers via internet-based interaction.
A lot of people loved the idea. In my industry sector at the time, airlines, hotel chains and transportation service providers were rubbing their hands in glee at the thought of being able to sell direct to the public. They were, as they saw it, impeded financially by having to sell via intermediaries such as GDS vendors and travel agents, who all took a percentage of their revenues. With this new model, who needed the grasping middleman? Suddenly, another words was on a lot of people’s lips. Disintermediation.
From my new IT perch in the USA, I watched over the next 2 years as the Dot Com era showed up, grew exponentially, crested, and then imploded. Like all bubbles, it burst spectacularly, with most Dot Com startups being shuttered, sometimes after burning through horse-choking piles of cash before failing (hello WebVan).
There were a whole host of reasons why Dot Com turned out to be a bubble, ranging from ludicrous over-optimism, a total lack of realism (who knew that building scaleable web sites could be..well, kind of difficult), and the presence in the mix of a fair number of bullshitting charlatans all uttering variants of the mantra “if you build it, they will come”.
The Dot Com era is now far enough away in many rear-view mirrors to have been almost forgotten by many people in and outside of IT and Tech. This is not surprising, given the well-documented (and somewhat necessary) tendency of humans to remember Good Stuff and mysteriously fail to remember Bad Stuff.
It is certainly far enough away for start-ups to be able to collect large amounts of VC cash and proceed to burn through it at a merry rate. Just like the Dot Com era, many VC-backed businesses today may never be profitable. I am still trying to fathom if Twitter can ever make money, given that it cannot regulate content, and as I keep saying, all free internet sites eventually suffer from UseNet Syndrome.
One of the most-funded startups toaday is Uber. Like many Dot Com-era businesses, Uber’s value statement is based on disruptive innovation – the ability to call up a taxi ride online, have it arrive quickly, and pay either online or in person. Uber has been expanding rapidly for a few years now. As is normal for what looks like a disruptive technology (certainly disruptive if you are a cab driver in a big city), Uber’s expansion has run into roadblocks, some of them related to the reality that legislation does not have the ability to handle disruptive innovation. Just like the drone/UAS industry, many cities and states are not set up to facilitate an internet-based ride-hailing business, and some of them are hostile (see Austin TX).
However, at the end of the day, Uber has to make money, or it is ultimately doomed. The problem is that it may never be able to make money. Uber’s strategy clearly involves transitioning in the future from owner-driven cars to autonomous vehicles, thus eliminating another intermediary source of cost (the driver). However, given the comment I made about legislation not keeping up with technology, it is not clear how soon that can happen.
This article makes the claim that Uber is actually doomed with its current business model, and may end up as another WebVan. The money paragraph is this one:

…Uber lost at least $2 billion in 2015, a shocking deficit it followed last year with a loss of $2.8 billion — a number that didn’t even include its star-crossed attempt to break into the Chinese market. Much of those losses had come in the form of subsidies: Uber was paying bonuses to drivers to get them on the road and keep them there, while subsidizing rides for users by charging well below the true cost. The idea was to get people so addicted to the Ubering lifestyle that the app would be baked into their lives, to such a degree that no one would much care if and when the subsidies went away and the price went up. Or Uber would simply drown its competitors in cash until the advent of autonomous cars got rid of its biggest cost: drivers.

It’s the Dot Com era all over again – a start-up flush with VC cash is clearly willing to endure massive short-term losses (the amounts of money that Uber is prepared to lose are making WebVan’s losses look like chump change), in the hope of establishing a dominant market position. Baked into the whole current business model is one of the oldest tricks of an aspiring business monopolist (predatory pricing), coupled with an optimistic belief that a disruptive technology (autonomous vehicles) will ride in and Save The Day.
My humble opinion is that Uber cannot succeed as a buisness because it relies on too many cards in its poker deck falling its way. Uber’s claimed market capitalization of up to $60bn is a polite fiction for a business that is losing $2bn a year. Anybody who believes that probably also believes in rainbow pixieland and unicorns, and deserves to be parted from their money.


Quick Items – 27th January 2015

Why managers hate Agile – Part 1
Excellent blog posting that surfaces some of the obvious reasons why many managers and leaders in large corporations dislike Agile. The main takeaway – it conflicts with the top-down command-and-control model that is still prevalent in many large corporations.

The way that most corporations recruit is fundamentally flawed, and has been for decades. Here is an interesting and different approach to recruitment.

Discrimination against the unemployed
Academic research confirms what many people have suspected – employers and recruiters don’t like the unemployed and go out of their way to not hire them. Which proves that you should never admit to being unemployed, either in a cover letter or a resume.

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