Want a Chance to Contribute to the Galt Blog?

by Don Harkey

Do you have an interesting article you would like to tell the world (or at least the readers of the Galt Blog)? Do you see a "Concept of the Week" coming up that you would like to write about? Great!

I am currently soliciting articles from experts in various fields, but I am sure I am likely to miss someone who has something great to say.

If you would like to submit an article, please submit it to info@galtconsulting.com for consideration. Include your name, email, and company website / information. I will use the information in the article, even including a link to your website if you desire.

Thanks for reading! Galt Blog's following is growing fast! As always, feel free to send any ideas for improvements, topics, or just send me your unfiltered compliments!

Thinking Differently - Google

by Don Harkey

I really love when companies do great things (see my last blog to find out why). Google has been a great example of a company doing some really innovative things. So if this seems like an ad for Google... well I guess it kinda is!

Have you ever played with some of the products that Google has been putting out? Google started out with a search engine, then expanded into email, calendars, maps, shopping, blogging, shopping, finance, etc... the list is long and growing. What is the cost to the user for all of these products? Nothing.

Perhaps the most impressive thing about Google is how user friendly and powerful these applications are. They often work together seamlessly and are truly useful. For example, my wife has a calendar on Google and I have a calendar. We share the calendars and can see what each other is doing. When I have an appointment, the application sends my cellphone a text message 30 minutes before the appointment as a reminder when I am on the road. I can even make "quick add" appointments through my cellphone by typing "Update Blog 7AM Mon", and it will put an appointment at 7AM the next Monday called "Update Blog". Pretty slick!

Another great application is Google Earth. This free download allows the user to float above the planet and view satelite images of the whole planet and zoom down toward the level individual houses. They even have some buildings in 3D imaging allowing the user to tilt their view sideways and walk through Disney World complete with shops and even street lamps. Users can visit some museums and look at paintings in brush stroke detail.

What impresses me most though, isn't just the applications, its how Google set up their process for making these applications. In email (called "Gmail"), users can submit new ideas to the application team for making the product better. Google utilizes a "Google Lab" which roles out and tests these new ideas in action. For example, one simple improvement came from a user tired of forgetting to attach a document in an email that says "see the attached document". Google has a lab that looks for the word "attached" or "attachment" in your email. If you don't attach something, a box appears when you click "send" asking if you meant to attach something. Simple and very useful!

The picture with the article above is a picture created on another Google application called Google Sketchup. This application allows the user to draw remarkable 3D pictures with an ease that will change the computer aided design world. Users can use the program to draw landmarks or even their own homes, and submit them to Google Earth. Google Earth is creating a 3D model of the planet, and most of the work is being done by its users!

I use this example because it shows what an organization can do when it has a clear vision of who it is. Google's philosophy is open and free applications that are easy and powerful to use. They partner with the user early in development and never consider themselves "done" with a version of software. Too many companies look for the idea without finding the vision behind it. Use some of Google's stuff and you will see the unlimited value of Vision!

Evil Companies

by Don Harkey

It's on the news. Its heard in the lunchroom. Its heard on the floor of the stock exchange. What does Apple think about this? GE really cares about its people! Wal-Mart is an evil corporation!

This is a mistake!

Organizations do not think. They do not feel. They do not make decisions. They are not ethical or unethical. They do not innovate. They are neither smart nor stupid. These are human traits and comparing organizations to people is like convincing yourself that those cute grizzly bears in the forest really just want a human friend.

Organizations are made up of people working as a part of a system. An efficient system contains components that all work toward the same goal or aim. When organizations have a clear goal and their components are working together toward that goal, the organization appears to be "smart". When organizations don't have a clear goal and people within the organization are working against each other for individual goals, the organization appears to be "stupid".

The mistake that many people make is that they equate a "stupid" organization with "stupid" people. This is not true.

Enron was a very stupid organization with lots of smart people. They entered into bad deal after bad deal in an almost reckless way. This is stupid. However, within the "system" of Enron, this was smart for the individual. Enron executives held the widely held belief that the way to manage people is to set clear and measurable expectations and then hold them accountable for achieving those expectations. This is considered "smart" in many circles and is taught in many business schools. This is the concept behind the "No Child Left Behind" policy from the Bush administration. If you say this at a seminar of business leaders, you will get a lot of nods of silent approval (unless I'm in the seminar!).

In Enron, the "measurable objective" was to close deals. Get as many deals as you can. Another strategy of Enron was to move their employees around to get different experiences. They did this every few years. This is also considered "smart" in many circles, again including business schools. The logic is that people who get more experiences will make better decisions.

Enron must have been pretty "smart" then! In fact, they were named Fortune Magazine's "Most Innovative Company" for 6 consecutive years right up until they collapsed!

The problem was that Enron had smart people. If you are a manager and your boss tells you "close as many deals as you can" and you will get a big raise if you do (or get fired if you don't), what are you going to do? You aren't going to be in that division for very long so by the time the deal is executed and the results are realized, you will be well on your way.

This is exactly what happened... over and over and over again. Yes, there was also corruption from the CFO and yes, their accounting was flawed and even doctored. However, one of the greatest lessons from one of the best case studies in a generation has been almost lost in the business world. Deming warned of this directly. Short-term job positions lead to short-term thinking. As a friend of mine always used to say, "show me how you will measure me and I'll show you how I measure up".

It is too easy to dismiss an organization as being "stupid" or "evil". Organizations are simply systems of individual components working together. The real knowledge comes from looking at how the components are working together and whether the components are working toward the same goal. Understanding the nature of a system leads to "smart" organizations!

Lack of Clarity Leads to Pointless Conflict

by Don Harkey

Have you ever sat in a meeting, or with a group of friends, and listened to an argument over nothing? It's like an episode of Seinfeld without the laugh track. I've even heard heated arguments by two people debating the most important factor in a decision, even though both parties agree on the decision itself. Think of the old beer commercials... "I drink it because it's less filling." "I drink it because it tastes great."

Another strange phenomenon that happens within teams and especially large groups is the silent majority. I've seen this happen in organizational meetings. The room will have 100 people waiting to vote on an issue. Two people will argue against the issue and two people will argue for the issue. The few people talking will go back and forth over and over again and get quite passionate. Then the vote will occur and it will be a landslide. The people who argued for an hour for the winning side ask those around them who were silent, "why didn't you speak up?"

These are all situations we can relate to. They are uncomfortable moments that make us tense up and start to watch the clock. These are not a healthy exchange of ideas. What causes this?

The bottom line is that these types of arguments are caused by a lack of clarity. Think about our beer example. If the group is trying to decide whether to drink the beer or not, is it really important which reason is most important? What is your group trying to accomplish? What is the purpose for the meeting?

In large group settings, especially in non-profit groups, people will speak for a variety of reasons. They may have a personal issue with someone else in the room. They may disagree with a specific point that was brought up. They may like to hear themselves talk. The leader (or moderator) of the discussion must keep the group focused on the task at hand.

A common mistake of teams that muddies the water is the desire to create a consensus on everything discussed in the meeting. If the decision is Path "A" or Path "B", the goal of the group is to bring out all of the relevant information and make a judgment call on which path to take. The discussion should pass through a continuous filter of "is this important?" and "is this fact or opinion?". If a person disagrees with taking Path "A" for judgment reasons, but the group is definitely leaning toward Path "B", it is better to simply agree to disagree.

When in a meeting or a discussion, remember the purpose of the discussion. Make sure to bring out all of the information so that the team members all have the same information. Discuss the logic different people have in making their decision, and then make the decision. It is not about winning or losing an argument. It is not about building consensus. It's about clarity, which is really the role of leadership.

As a leader, go over an issue before a meeting or discussion repeatedly until the issue is as clear as possible in your head. Organize your thoughts and determine what the key decision factors will be and guide the team into focusing on those factors. Maintaining clarity in team events will make these events more productive and much less painful!

Bear Feels Scared

by Don Harkey

I was reading a story last night to my 6-year old son called "Bear Feels Scared" by Karma Wilson and Jane Chapman. (I highly recommend the Bear books by Wilson and Chapman)

The story is about a large bear (named Bear) who wanders from his cave to search for a snack. He wanders around the forest on a small trail and decides to return home as the weather starts to get cold. Before he can get home, the sun starts to set and he begins to feel scared. Before long, he is hiding in some bushes shivering in the cold wind as night falls.

Meanwhile, his friends (Mouse, Rabbit, Wren, Raven, Owl, and Badger) are waiting for Bear to return. As night falls, they decide that they should wander out into the forest to find Bear and help him get home. They prepare their search party and venture out of the cave. (SPOILER ALERT) They don't get far outside the cave when they run into Bear who was hiding in a bush, which ended up being only 10 feet from his cave. The friends enter the cave and snuggle together for bedtime ("...and the Bear feels safe").

As I closed the book, I realized how profound this simple story really is. The Bear ventured out of his comfort area (the cave) in search of something a little better (a snack). Soon, his fear of the unknown caused him to loose his vision and he temporarily lost his ability to find a snack or even get back to his comfortable cave.

This is the role that fear plays in our lives. An uncertain economy can certainly feel like a cold winter night and cause us to loose our vision. However, the book teaches us two very important lessons. First of all, fear is OK as long as it doesn't paralyze us into inaction. After all, when fear clouds our vision (which is what fear does), its hard for us to see how far (or close) we really are to our goals. The journey might be hard and we may never reach our goal, but this outcome is ensured when we stop trying.

The second lesson is that friends and trusted allies are invaluable during times of fear. Whether its a personal or professional relationship, people we trust and who care for us are absolutely critical in times of trial. This is another example of "the right thing to do is the right thing to do". Most of us know that we should help our friends in times of need. The same is true in professional relationships and even in networking. In times of economic stress, we should all turn to our most trusted partners and work together to find new and old ways to succeed together. This concept gives some clarity to why beating up vendors and milking customers is a destructive practice! Building relationships with people who do the right things and do them well should be a goal of any organization.

With vision and trusted relationships, we can all, as the book says, "feel safe"!

Management 101 - Back to Deming

by Don Harkey

"We are living in a prison, under tyranny of the prevailing style of interaction between people, between teams, between divisions. We need to throw overboard our theories and practices of the present, and build afresh. We must throw overboard the idea that competition is a necessary way of life. In place of competition, we need cooperation."

- W. Edwards Deming from "The New Economics" (1994)

Many people have asked me where my central philosophy in management was derived. I often talk (or write) about how I see flaws in what is currently the popular idea of good management. I read articles from management professors, which, forgive me, are not only wrong, but reflect the core of many of the problems faced in organizations today. So if you believe that there is a better way, where do you start?

My answer is simple. Start with W. Edwards Deming.

I will let you look up information on Deming and learn about his long career. There is plenty of information available on the web or in the library about Deming's principles and his life. To me, Deming is to management what Einstein is to physics. In the field of physics, scientists are still working hard to fully understand the theories that Einstein first introduced to the world almost a century ago. Deming's ideas are similar. Few management gurus will dispute Deming outright, but few also truly understand and follow his philosophy.

Summarizing Deming's views is like summarizing Einstein's Theory of Relativity. However, there is simplicity to it. Deming's belief is that our culture has developed to think of a free market as one where competition at all levels leads to success. This is Adam Smith's view of economics. If Deming is Einstein in our analogy, then Smith is Isaac Newton. Like Newton, Smith is almost right.

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

- Adam Smith from "The Wealth of Nations" (1776)

In essence, Smith says that competition drives prices down and cooperation drives prices up. He has a point. Companies have pulled together to "fix prices" in the market just as Smith describes above (ex: ADM in the early 90's). It is also true that competition can lower prices, especially as consumers are given more choices. Smith's theory can be (and is regularly) applied to individuals as well. Employees who band together can fix their output and demand more wages (ex: auto worker's union). Employees who are put in competition with each other will work harder because they have to.

However, like Newtonian physics, this theory doesn't work all of the time... and the exceptions are extremely important.

There are plenty of examples of "people of the same trade" pulling together to decrease costs and improve quality for the consumer. Professional organizations have developed standards that provide professionals with a collective knowledge. An example is the American Society for Mechanical Engineers (ASME), which provides best practices for use throughout the world, which has lead to decrease costs from manufacturers who don't need to develop their own standards, and improved quality because the collected knowledge is better than any individual organization could have developed. This cooperation has lead to lower costs and improved quality.

What about individuals? Professional athletes are often inspired by competition, but history shows us that the best performances come from teams that consist of individuals who cooperate toward a common goal. The Yankees regularly have the best players in all of the baseball, but they are often defeated by teams consisting of young, start-up players.

This is a complex topic, but I am trying to leave you with 2 key points. First, the more I learn about Deming, the more I see that he right. Second, think about competition and cooperation and how they impact your organization. Challenge yourself and question conventional wisdom. Let's start digging our tunnel out of the "prison" that Deming talks about!

Ethics - Not Just Stealing Pencils

by Don Harkey

When I was in college studying engineering, all students had to take a course on Ethics. I remember thinking how stupid the concept was. We are being required to take a course telling us not to steal pencils from work. Unfortunately, I didn't get much else out of the course than "don't steal pencils from work" and a "pass" grade (interesting that an ethics course is "pass"/"no-pass").

As I started my career, I quickly learned that ethics is a much deeper topic than I had realized. Its not just about stealing pencils from work or taking an hour and a half lunch break. Its about protecting your character even when the current around you pushes you the wrong way. Often times ethics requires action over inaction.

I don't think our young professionals entering the workforce are prepared for the decisions they will have to make and for the fact that they will make the wrong decisions from time to time. Part of the reason for this is that most people make enough of the wrong decisions that they become numb to the "right ones". Let me explain.

I have seen a lot of outright corruption in my career (a LOT more than I would have expected). However, this is actually not the most common form of unethical behavior. Crooks almost always get caught. The type of unethical behavior that I see as being extremely common occurs when an individual surrenders their judgment to an organization. Let me give you an example.

An employee is filling out an accident report. The supervisor points out to the employee that if they use too strong a language, the corporation will come down on them and they will get in trouble. The employee "softens" the description of the incident for two reasons: 1) the supervisor basically told them to and 2) if the darn company wouldn't come down so hard on them, they could report the truth. The employee has falsified their testimony and has blamed the company for "making them do it".

I'll give another example. A salesperson is given a bonus if they can sell a certain amount of product within a quarter. The salesperson is barely short of the target and really needs the bonus to help pay for some medical bills. The salesperson has a customer who is wavering on making a purchase. He calls the customer and offers a huge discount if they make the purchase immediately. The employee made a decision for the company based on their individual need.

These practices are so common that many people might argue with me whether its ethical or not. I have had high-level people in organizations tell me that "its just way its done".

Why is this happening? First of all, the commonality I see for this type of behavior is a justification. The person justifies their actions, usually by pointing out a flaw in the organization or people around them. "If they wouldn't base my pay on sales, I wouldn't have to do this" or "If others weren't doing this, I could compete without making these types of decisions". They basically dismiss their decision as something almost out of their control.

Another commonality in the behavior is that it is simply easier. It is easier to go along with the currents of an organization that encourages (intentionally or not) unethical behavior. A supervisor asking you to "soften the language" on a report may not even be consciously aware that they are asking you to lie. Pointing it out to them is tricky because people like to think they have high character and because the right decision will likely make their job more difficult as well.

My advice for organization leaders is simple. Structure your organization in a way that rewards character. Do not give bonuses based on individual performance targets. Beware of practices that limit the flow of truth within your organization. Set up a culture of cooperation (not competition) amongst your employees. Establish a clear common vision. Most of all, make the types of decisions that you want your employees to make. They will likely follow your lead. My experience is that while ethical decisions may be painful in the short term, your reputation will become your most valuable asset in the long term.