Interpreting Business Results

Tom provides interpretation of Bank of America CEO summary of quarterly results. ... Priceless. ... Read on. ...

... "We made total asses of ourselves, allowing ourselves to be conned by a bunch of out-of-touch Nobel-winning economists with their portfolio-risk smoothing models ... " ...

Via Tom Peters: Vile Bile

Connections - Drug Development and the New Renaissance

It is several years since I first read "The New Renaissance" by Douglas Robertson but I am still fascinated by the additional perspectives it provides on today's work. The thesis is that certain developments in methods of communicating information enable advances in civilisation. The developments cited are spoken language, writing, printing and, most recently, networked computing. Each development results in orders of magnitude increases in the amount of information available to individuals. The increased access to information supports improvements in civilisation in technology, health, science, politics and virtually every other area as well.

The project connection comes up as we approach the completion of a major project to submit to the US and European agencies an application for approval to market a drug. The submission document represents an enormous amount of information about the drug. Much of the information about the its efficacy and safety is derived from extensive trials. There are many other sources, internal and external, addressing such aspects as the manufacturing process, conduct of the trials, literature searches, financial certification, labelling, test methods and scores of others. Collecting, managing, verifying and consolidating all this information within any reasonable time scale would scarcely be possible without information technology.

Breakthrough CIO Behaviors

CIO tips for transitioning from the operational to the business strategic. Behaviors include shifting the business conversations and emphasizing new organizational competencies focusing on business processes. The results are business IT projects that deliver on the value proposition. ...

... "Rather than managing the daily operations, the Breakthrough CIO identifies and executes on these projects, and tracks their returns and corresponding risk levels, until IT becomes a predictable investment. " ...

Via CXO Today: The Breakthrough CIO Role

Project Management Opportunity to Differentiate

Tata shares results of IT project performance survey and the results aren't flattering for the info tech profession. This consistent trend of non-performance offers companies that perform well to differentiate from the pack --- and, maybe, even achieve a sustainable competitive advantage. ...

... "Yet despite these worrying levels of failure to deliver, 43% of organisations say that their business managers and the Board accept problems as the norm. This attitude is especially common in Europe (44%) and AsiaPac (48%). Despite the general poor performance of IT projects globally, such results do not evoke a sharp reaction from management. " ...

IT Project Underperformance is the Norm

No surprises

Developing a new drug for market definitely counts as a major program - in fact a succession of major projects. And some drugs are more complicated than others - Biologics are compounds derived from living sources and include antibodies, vaccines and other proteins. The approval process is rightly more complicated than for small molecule drugs. Somewhere in that chain of projects comes a landmark event - Submission of the Biologics License Application (BLA) to the US FDA. The BLA is a massive document that includes all the evidence derived from many trials, studies, tests, analyses, literature searches and so on. It includes information about the drug itself, its manufacture, storage, ingredients, purity, delivery mechanism and more. It includes information about the trials, how they were conducted, how the patients benefited, any adverse reactions, how was impartiality maintained and so on. It's big and it's complex. Add to this the fact that it is a very expensive proposition and the success of a single new drug can affect the fortunes of even the largest drug company. Of course there are commercial pressures to get it done quickly - to bring relief to sufferers, to get to market, to beat the competition and to be able to start work on other opportunities.
So we have a multi-million dollar project - very important to the organisation, under tight time pressure, with scores or hundreds of component deliverables all focused on a single event. The duration and effort for many of these deliverables is very uncertain. The results of analysis of data coming in from clinical trials or from other studies affects the writing of the different components. Consistency of information in different areas is important. A new realisation in one area can require changes to a deliverable in another area. All this makes for a very exciting project management environment and the plea for No Surprises.

Project Management on One Page

I just picked up The One-Page Project Manager by Clark Campbell. I'm always looking for ways to simplify things, and am a big proponent of "one-page" type solutions. I've use a one-page business plan, a one-page charter, a one-page business case, and other such tools, always with good results.

Needless to say, I was intrigued by the concept when I saw the book. And I was not disappointed.

Not only does the book offer some good insights, but it offers step-by-step instructions on how to complete a visually appealing, one-page project overview and status for senior management that includes:

- The project's key objectives
- The major tasks and schedule dates
- How the task align with the objectives
- Project cost and schedule status
- Key resources and priorities
- Intangible key criteria
- A brief summary of the project status
- Basic descriptive information

Best of all, as noted in the book, the templates are available as free downloads from the book's website (below). I still recommend reading the book as opposed to just winging it with the template, as the book offers further explanation.

The author notes that this is not meant as a replacement for MS/Project, Primavera, or any other tool you may be using. Instead, it is used in addition, as a way to communicate with senior management, the project team, or anyone else that needs to know the relevant facts about the project without reading a fifty-page report.

Check it out...

OPPM -One Page Project Manager

Green is INnovative

Sun offers advice on green IT strategy and provides assessment toolkit as part of its eco initiative launch. ...

... "1. Assess Your Datacenter: Sun has resources available that you can use to measure the current efficiency and environmental impact of your datacenter, or we can do it for you. Based on the results, we can recommend ways to optimize space, power, and cooling for better efficiency and utilization across your IT infrastructure.

2. Optimize Your Infrastructure: Customers can upgrade their old equipment to new models that are the most energy efficient and powerful systems possible. Sun systems can deliver improved performance, power and cooling efficiencies as well as provide additional capacity in your facility.

3. Deploy Virtualization Technologies: Sun's virtualization solution is built upon industry-proven virtualization technologies – from desktop, to server, to disk and tape, and includes the free and open Solaris OS that runs across more than 890 Sun and non-Sun systems and has built-in virtualization and Predictive Self-Healing features. These products, combined with innovative programs, tools, services, and strategic partnerships can help customers achieve greater utilization, greater manageability, and significant savings, while bypassing power and space limitations. " ...

Via Sun Micro: Sun Eco Innovation Initiative

Practical Application of Innovation

Here's practical advice on applied innovation techniques. ...

... "Any Innovation plan must be just that, a hard plan. It can't be an initiative. A plan has to have milestones and expected results. These results must be measurable and memorialized in writing. " ...

Via The Heart of Innovation: Science of Innovation

The Dell Supply Chain Competitive Advantage

Dell's competitive advantage ... cooking the books ...

... "The investigation raised questions relating to numerous accounting issues, most of which involved adjustments to various reserve and accrued liability accounts. The investigation identified evidence that certain adjustments appear to have been motivated by the objective of attaining financial targets. According to the investigation, these activities typically occurred at the close of a quarter. The investigation found evidence that, in that timeframe, account balances were reviewed, sometimes at the request or with the knowledge of senior executives, with the goal of seeking adjustments so that quarterly performance objectives could be met. The investigation concluded that a number of these adjustments were improper, including the creation and release of accruals and reserves that appear to have been made for the purpose of enhancing internal performance measures or reported results, as well as the transfer of excess accruals from one liability account to another and the use of the excess balances to offset unrelated expenses in later periods. The investigation found that sometimes business unit personnel did not provide complete information to corporate headquarters and, in a number of instances, purposefully incorrect or incomplete information about these activities was provided to internal or external auditors. " ...

Via Dell: Dell Independent Investigation Completed; Will Restate Financials

EVM not serving its intended function at U.S. DoD

A recent article in InsideDefense titled "Pentagon to Take New Steps to Combat Major Cost, Schedule Problems" describes strong warnings issued by top DoD officials. Kenneth Krieg, who stepped down July 20 as Under Secretary of Defense for Acquisition, Technology and Logistics (USD-AT&L), issued a July 3 memo stating...

Several unfavorable findings from recent audits indicate that earned-value management (EVM) is not serving its intended function in the internal control process,

DOD components are due to update John Young, acting USD-AT&L by early October on "efforts to underscore the rules and get better results," according to InsideDefense. "Young announced in a July 30 letter that the military departments will be compelled to immediately form powerful Configuration Steering Boards (CSBs) for every major program in development."

Kalamazoo Dog House Story (Part 4)

How do projects help translate strategic objectives to front-line action? Our story continues. See also Part 1, Part 2, and Part 3.

Doghaus.biz introduced process discipline and Project Management to the dog house industry, with great results. Unlike archrival PetKorp, Doghaus.biz was the first to introduce custom orders to an industry that had been dominated by retail sales. CEO Michael Haus' has one strategic objective -- his economic engine -- which is to focus his business on Profit per Deliverable (PpD). That is, he tracks the price and cost of each dog house (deliverable) individually. Accordingly, his business model requires hiring low-wage installers for simple dog house installations (non-projects) but employing local construction firms for custom projects. He created an executive dashboard that tracks PpD on a monthly basis. His dashboard tracks custom-project metrics and non-project metrics on separate gauges. The PpD(Projects) indicator always shows a healthy profit, but the PpD(Non-Projects) indicator usually shows negative cash flow because it competes directly with PetKorp retail sales. So the entire Doghaus.biz executive team continually applies pressure on the operations staff to cut costs for the non-project installations.

How does this project vs. non-project tracking system play in Kalamazoo? See the comments section to find out....

Outcomes and Actions...Too simple?

Some of the feedback on my previous post, about a new and simpler definition of the word "project" has been that the definition may be too simple. How could something as complex as a major business project be defined by something as simple as "outcomes" and "actions?" My answer comes in five parts:
(1) Outcomes and actions can be combined in a staggering number of ways, not unlike the way protons, neutrons and electrons are combined to form matter. Consider Agile PM, where outcomes are defined by a backlog of user stories (with story points) and executed in fixed time bins (iterations). Consider how Agile actions are guided by daily stand-up meetings. Consider large government projects where interim outcomes are described in "work packages," are defined and refined into a complex performance measurement baseline (PMB), placed under tight change control, and tracked with various pre-defined earnings rules. Consider how outcomes include widely-agreed concepts of "deliverables" and "creating unique products, services or results." And yes, intended outcomes and next-actions help guide personal decisions as well. It is a very scalable definition of projects -- more scalable, in fact, than the traditional definition of a project.
(2) There is a lot of room for improvement, even in traditional projects, for how we define, control and track intended outcomes and how we translate those outcomes into front-line action. Consider how many projects have failed because day-to-day actions were not connected to clearly-defined intended outcomes. Not so simple, is it?
(3) It takes extra effort to decide if a project activity should be defined by its end state (outcome) or is simply a means of moving us forward (action). If we don't go this extra mile, we may create an amorphous and confusing froth of outcomes and actions that is a source of miscommunication and waste. Outcomes and actions should be distinct, yet linked. And that is far from simple to do.
(4) One of the things I've learned about outcomes and actions is that they are entirely different beasts. Outcomes are the realm of control. God bless order and structure. Outcomes need to be comprehensive and mutually-exclusive, which is not so simple to implement, but very important too. Actions will never be comprehensive and mutually-exclusive. Actions are the realm of knowledge worker freedom of choice (which is why they are knowledge workers). Actions are messy, but God bless the mess.
(5) In upcoming posts, I'll show how this definition helps with respect to the next great frontier in project management, which is Management by Project (MBP). This simple definition, although written by a personal productivity guru, has surprising power with a topic that is beyond the scope of the PMBOK Guide.
Is the outcome/action definition simple? Yes. But it explains and predicts a lot of things from personal management, to project management, to MBP.
/Garry

What is a Project? Think Again!

Max Wideman’s very impressive Comparative Glossary of PM Terms contains 23 different definitions of the word project – all written by very knowledgeable people. Creating a sticky definition of the word “project” (a sticky definition is one that can be easily memorized by a general audience) requires battling the Curse of Knowledge. The Curse of Knowledge is the result of forgetting what it’s like NOT to know what you know. The more you know, the stronger the curse. That’s why truly sticky ideas often come from unexpected sources, and different fields. (Unexpected is one of the Made to Stick principles.) In my opinion, the very best definition of the word project comes from personal productivity guru David Allen, in his brilliant book Getting Things Done. Here it is...

• A project is any outcome you’re committed to achieving that will take more than one action step to complete.

Why is this a great definition?

(1) This definition is water tight. Unlike the other 23 definitions, I can’t think of a single exception to this definition. (If you can, please post a comment.)

(2) The word outcome covers a lot of PM territory. The word outcome includes the concepts of “deliverables” and “creating unique products, services or results.” It applies to your garage project and it applies to “landing a man on the moon and returning him safely to earth.”

(3) The word action captures an essential element of every project – making progress one discrete step at a time.

(4) The word committed filters out activities that are not projects.

(5) The three key words outcome, action, and committed are simple and concrete (two more Made to Stick principles).

Most of the definitions in Widemans’s glossary define projects as the way very knowledgeable people LIKE TO MANAGE projects, especially large ones. Knowledgeable project managers like clear specifications (or user stories), they like budgets and change control, they like project-friendly cost accounting, they adore network schedules (or iterations), they like to manage risk, they manage resources, they create return on investment in their project portfolio, etc. There's nothing incorrect about any of these ideas, but these XL clothes don’t fit very well on small projects. After all, small projects are projects too, and there are far more small projects than there are large ones!

Example: If we are visiting a science museum (just a casual visit) it is certainly not a project. However, if we are committed to organizing a safe, enjoyable learning experience at the science museum for a large group of Third Graders, our project is the set of actions that we take to achieve this intended outcome. It isn't about abstractions like temporariness and uniqueness. This project does not have a budget, it doesn’t have a logic-driven schedule network, there’s no accounting system, there are no deliverables, we might repeat the adventure every school year, and it isn’t formally risk-managed or resource-managed. But anybody that has organized a major field trip for a large group of kids knows that it is indeed a project! Why? Because it has an intended outcome, it has action steps, and it requires commitment.

David Allen's definition deserves to be in the Hall of Fame of Sticky Ideas.

P.s., Thanks for reader Kurt U. for prompting this post.

Project Early Warning System

If we can detect project problems early, we can resolve them. What's your best indicator? Scope quality, SPI / CPI, QA results? ...

... "In general, the earlier you spot trouble, the easier it is to do something positive about it - anything from making minor adjustments to scope or schedule to killing the thing outright. " ...

Via CIO: Project Rescue

Agile Tipped?

Have agile methods for software development tipped yet? And, the survey says ...

... "There are two interesting observations about these results. First, although the majority of organizations are applying agile techniques on projects of 10 or fewer people, many are, in fact, trying agile on larger projects. " ...

Via Dr. Dobb's Journal: Agile Survey Results

Don't Align, Synchronize

Forrester defines a new role for IT in the strategy of a business. ...

... "But achieving a state of 100% alignment will no longer be possible - if it ever was - as firms evolve over the next five years toward business technology (BT), the pervasive technology use that drives business results. " ...

Via Forrester Research: Alignment

Late IT Projects Hurt

HP / Economist survey shows that late projects are prevalent and having negative business consequences. Speed of delivery is the key metric highlighted in the findings. ...

... "The survey showed that accelerating speed of delivery does not have to aversely affect quality or positive business results. When project overruns do occur the culprits are usually midstream changes to business priorities and poor coordination between IT and business managers. Better definition of business requirements, greater investment in IT process automation and more collaboration across IT functions are the primary solutions for accelerating time to delivery. " ...

Via HP: Global Survey Reveals Late IT Projects Linked to Lower Profits, Poor Business Outcomes

Technology Demographics Survey Results

51% of American adults are elite or middle-of-road users of technology. The balance uses few technology assets. ...

... "The questions below allow you to place yourself in one of the categories in the Pew Internet Project's Typology of Information and Communication Technology Users. " ...

Via Pew Internet & American Life Project: Where Do You Fit?

Think Clear: Mind Map to Innovate ...

To think clear, mind map. ... even if on paper ... survey says. ...

... "Two-thirds of respondents said the biggest benefit of mind mapping software is that it helps them to clarify their thinking. " ...

Via Innovation Weblog: Results

Innovate: Monday Morning Plan

Here's some ideas to jump-start your innovation tommorrow (Monday). Make some time for brainstorming. Don't penalize mistakes. Get folks interacting. Read on. ...

... "Creative or alternative thinking does not mean playing with brightly coloured balls all day long. It means selecting appropriate techniques and methods from as wide a variety as possible and matching them to the task in hand to get the best results possible. " ...

Via Derek Cheshire's Creativity and Innovation: Monday's Plan of Action

Project Team Motivators: Pay 4 Performance Bonus

Looking for ways to motivate your team through financial compensation? Performane bonus may do the trick, according to research results. ...

... "However, if the same money was applied to pay-for-performance bonuses, the analysis suggests a performance increase of better than 15 percent. Indeed, the results suggest that providing a strong pay-for-performance link for bonuses rather than raises had the greatest potential benefit ... " ...

Via Cornell Hotel School: Compensation Study: Performance Impact

The Five-Minute Project Manager

Sometimes the best project management tips come from other fields, such as this free "Five Minute Guide to Project Management" from a creative arts website.

Simple, to-the-point, and yet quite effective, this brief guide reminds us of the basics that so often get forgotten in the midst of earned value, critical path, and other favorite topics of PM nerds.

As the article discusses creating a project plan and formally managing subsequent revisions as part of a "contract" between you and the sponsor, let's not forget the importance of defending the right plan.

I was having lunch with a group of CIOs the other day (following a presentation I had done), and all agreed that the number one killer of projects was an unrealistic plan, often agreed to under duress by an intimidated project manager.

Several CIOs present shared success stories of making a case to other senior executives by way of a high level project schedule, outlining the steps needed to achieve results. Often, that's all it takes. Some people I've spoken with have had some luck backwards-scheduling as needed from a given target, either to demonstrate the futility of the desired target, or to raise discussion as to which items can be eliminated.

Anyway, I digress. Here's the article about the PM basics ...

creativepro.com - The Art of Business: Project Management for Creative Professionals

Results Project Failure Poll

Communications, resource planning, and scheduling were identified as top root causes of project failures in CompTIA poll. ...

... "Nearly 28 percent of the more than 1,000 respondents to the web poll singled out poor communications as the number one cause of project failure. Insufficient resource planning was the second most mentioned cause of project failure, cited by just less than 18 percent of poll respondents. The third most frequent cause of project failure, according to the CompTIA web poll, was an unrealistic schedule, chosen by 13.2 percent of poll participants. " ...

Via CompTIA: Project Failure - Root Cause Poll ...

The Enemy of Simplicity: The Thud Factor

We've all heard about the benefits of simplicity, whether in our processes, our communication, or in our objectives. In all its forms, simplicity is a way to reduce confusion, boost morale, and encourage speed and flexibility. In fact, simplicity, speed, and flexibility are three of the "Six Winning Principles" I wrote about in Napoleon on Project Management (the other three being exactitude, character, and moral force).

But there's a lurking enemy of simplicity, and it often goes unnoticed. It can be found in the motives of individuals creating the processes, communications, or objectives. I'm talking about job protection. I don't mean the blatant kind that results from grandiose thinking, egotism or turf wars. It's much more subtle than that.

It can happen if an individual or department is placed in charge of creating a process or devising a plan. Or it can happen if a consulting company is brought in to do a study or offer advice. Common sense says that these people, while not necessarily devious, will hesitate to come up with anything too simple, lest they feel they're not doing their job. The result is often something that is way more detailed, complex, and expensive than it needs to be.

What can we do about it? We need to be very aware of motives and rewards, and make sure we don't consiously or unconciously reward people for complexity. We need to send a message that the shortest, simplest way to meet the goal wins (even offering incentives if possible). This can avoid what many consultants jokingly refer to as "the thud factor"----the customer's perception of the value of the service as judged by how much of a noise the report makes when it's dropped on their desk.

Whether it's a consulting company, a PMO, an internal process center, or a project team, we need to find a way to head off the thud factor and insure simplicity. We can do this by understanding motives; sending the right message; insisting on brief, simple reports; and creating the right reward system.

IT Governance: Board of Director Involvement

Corning demonstrates leading practices in board-level governance of IT - setting strategy, shaping the portfolio, understanding business impact, and sustaining benefit realization. The company expects growth through innovation in display technologies, diesel products, and telecommunications. Corning has a history of innovation and continues to invest in longer-term emerging technologies. ...

... "They play an active, creative role in helping to set IT strategy, make sure they know what's in the technology pipeline and what it will mean to the bottom line, and ride the results hard. " ...

Via Corporate Board Member Magazine: Board Level Governance of IT

Innovation Obstacles: Resistance, Time

Pulse-point survey on innovation shows cultural resistance and lack of time as barriers to innovation. Langdon Morris is author of Permanent Innovation, which is the process of innovating continuously, by developing an organizational culture that embraces innovation as a core value. ...

... "Both topics are chronic problems in organizations today, and both are significant red flags that indicate unhealthy situations. If your organization is characterized by resistance to change or you don't feel you have enough time for innovation then it may be time for a serious assessment of your organization's culture, and perhaps some remedial work to shift more of your focus toward something other than short term concerns." ...

Via Innovation Labs: Results of the Permanent Innovation Survey (PDF) ...

Is Project Management Relevant?

Over the years, I've had discussions with software developers who question the need for project management. I've heard everything from "The developers are the only ones who really know what's needed anyway!" to "All the project managers do is slow things down and add unnecessary bureaucracy!" to "Why can't the the developers just work with the customer to give them what they need and avoid the middleman?"

The fact is, given the right developer and a fairly isolated project, all of these are valid statements. But many projects are much more complex than that. They involve multiple stakeholders with conflicting needs, offshore resources, multiple vendors, complex interrelationships with other activities and departments, and more. They frequently involve managing all of this against budget and schedule constraints.

Leading, facilitating, and managing all of these elements is where a good project manager can help. An effective project manager removes barriers for a team rather than adding barriers. Any activities that may appear like "nuisance work" to technicians, such as reporting time or percent complete against milestones, are often necessary to meet the project's schedule or budget constraints.

A good project manager will work with developers to determine the appropriate project approach, depending on the constraints and the level of uncertainty involved. Perhaps an agile approach is warranted, with learnings applied incrementally. Perhaps piecemeal deliverables can be achieved for quick wins and earlier value. A good project manager will also prepare management reports, conduct presentations, and deal with vendor issues.

Most of all, a good project manager will communicate to all parties throughout the project. Although some developers do indeed have the expertise to do all this, it distracts from the work they need to do.

This is not just a nuance of the software industry. The same holds true in any industry where technical or subject matter experts question the need for project management. Project management is a completely different skill set, necessarily so. It's geared toward leading people to achieve objectives. An organization can of course put the project manager in a better position to be successful by providing adequate tools, general principles, and minimal bureaucracy.

The article below offers clear and simple evidence of the importance of project management. It begins with the results of a 1999 study that showed that the number one reason companies stopped working with Internet design firms was not about their lack of creativity or high costs---it was about their inability to effectively manage a project.

Here's the article...

MB Journal Article Archives

IT Supplier: Pressure Expected

CIO survey indicates increased pressure on IT suppliers to lower costs. ...

... "... negotiating tougher terms with suppliers of commodity systems and services is a top priority in order to free up investment for strategic software development and business change programmes. " ...

Via silicon.com: CIO Survey Results

Business Results: IT Strategy

Today's IT career path requires evolving your role into a challenging place - the potential to impact business results - which comes with its set of risks. However, standing still increases the risk of outsourcing, or worse yet, irrelevance. ...

... "If they're not in the decision-making stream, playing some role that's accountable for real results from IT strategy, even on a very local, project level, they're at greater risk both to outsourcing and stalling wages. They need to work themselves into a position that's closer to business results and end customers. " ...

Via InformationWeek Weblog: Read

Managing from the Bottom Up

Yesterday I entered a post about Best Buy's new Results-Only Work Environment (ROWE), and how allowing employees total freedom as to where and how they work, focusing instead on results, has shown a 35% productivity improvement. Granted, this may not apply in every environment, but the premise of focusing on results over rules is sound.

What I failed to mention is that this initiative didn't come from the top. In fact, CEO Brad Anderson didn't even know about it untill it was well under way and showing tangible benefits. And that's just the way he likes it.

Kudos to Anderson for allowing the flexibility in his organization for innovation from within, and the courage to try new things. That is what a learning organization is all about.

Anyone who ever brought about major transformation (think Martin Luther King, Ghandi, Jesus), usually did it in a bottom-up approach, not by first convincing "management."

One other thing I failed to mention. While it's uncertain to what extent it played in encouraging this particular situation, a primary consultant to the Best Buy organization is Marcus Buckingham, the talent management guru and author of three of the most enlightening management books I've read (First Break All the Rules, Now Discover Your Strengths, and The One Thing You Need to Know). I'd venture to say that his influence has at least indirectly encouraged this people-focused mentality.

Focus on Results, not Time: Best Buy Breaks New Ground

The other day, I posted a blog about the traffic anarchy experiment going on in Europe, where seven cities eliminated all traffic signs and the result was a reduction in accidents. My point was that if we focus on accountability and results, people will surprise us.

Well, Best Buy has taken that a step further. In the latest Business Week magazine, the feature story highlights Best Buy's daring new Results-Only Work Environment (ROWE) program. As part of the program, they have eliminated all work schedules in their participating areas and have practically eliminated meetings.

If someone wants to come in at 10:00am, fine. If they go to a movie in the afternoon, no problem. The key isn't how many hours they work, or even where they work (most workers are virtual most of the time). It's how well they achieve results.

Sound like chaos? Sound like people will just slack off? Well, once again the results say it all. For the divisions testing this method, voluntary turnover dropped dramatically (-90% for the Dot.Com division, -52% for the Logistics Division, and -75% for the Sourcing Division).

Sure, the turnover rate went down, but what about productivity? That too was greatly improved. The average rise in productivity for the participating divisions was +35% since the ROWE system was introduced in 2005.

Of course, what's important to making this work is to have the right metrics (i.e. customer retention, reduction in turnover, etc.). Many business mistakes happen because the wrong incentives are in place, leading workers to strive to meet a goal that sacrifices quality or is not in the best interest of the company as a whole.

The bottom line is that evidence is growing that we are better served by focusing on results over rules and policies wherever possible, something I've been saying for years. Now I'm glad to see some tangible evidence from those brave enough to try it.

Here's the Business Week article. Be sure to check the sidebar article about how to kill meetings!

Smashing The Clock

Control vs. Accountability: Are We Our Own Worst Enemy?

In our never-ending struggle to gain more control over the chaos in our organizations, and with more and more focus on change management, who would think of going in the opposite direction and allowing more freedom?

Let's take a look at a story with some surprising results (sent courtesy of my old friend, Larry Beane).

Thanks to a project initiated by the European Union, seven sities and regions in Europe have completely done away with traffic signs. The originators of this idea must have been on to something. Contrary to the normal expectation that this would result in pandemonium, the accident rate went down!

Now arguably, this may or may not work in a congested city, but it got me thinking about the need for accountability. Perhaps the more rules we inflict, what we're really doing is relieving people of accountability---the paradox being that we need to give people freedom to make them fully accountable. Otherwise, we claim ownership of the problem instead of delegating it.

This is not unlike Toyota's policy of trusting their work teams to solve problems independently, and trusting that if their solutions are wrong, they'll work to correct it and learn from the experience. This is what a learning organization is all about.

This isn't to say we should just abandon all change management processes. On the contrary, providing people with effective processes can lead to successful outcomes. But for each rule we devise, we should consider an alternate approach of holding people accountable for outcomes, and insuring they have the capacity to succeed. Yes, provide processes, training, principles, guidelines, etc. But then focus on outcomes and accountability. And allow for learning-based corrections.

It's a radical thought, but a little anarchy may just bring the control that we need.

Here's the article about the successes of traffic anarchy...

Controlled Chaos: European Cities Do Away with Traffic Signs - International - SPIEGEL ONLINE - News