Collaboration and trust; you can't have one without the other!

Collaboration, co-development, joint venture, whatever the name, working together is based on trust, dependence and risk sharing. Building trust starts in that split second where you realize there is something to like in the other party; you start sharing history and realize you share common goals. When you realize that all parties together can achieve dreams none of the parties can achieve alone, you realize you depend on each other. Trust fuels the bonding process; because it provides the assurance the other will not to abuse this dependence. Then comes the moment where you decide to share the risks of your joint venture based on the strengths of the individual partners. It’s also the moment you should be discussing contracts, to provide a legal base for the newfound relationship.

Sadly, we seem to be living in a society that thinks it can skip the first phase. Contracts seem to replace trust in many cases and a realistic view of interdependencies and a realistic sharing and resulting management of risk does not happen. As a result, specifications are fixed and the flexibility and manoeuvrability needed to tackle the challenges we face in these times are lost.

We need to change this attitude and understand that without trust there is no real collaboration. Strengths and weaknesses need to be shared not hidden to position for contract negotiations. Without a clear understanding of the interdependencies of the parties involved there is no realistic risk sharing. Without realistic risk sharing the joint venture will collapse at the first sign of trouble.

Am I asking everybody to trust each other? Of course not! Just remember that building relationships takes time and a substantial investment from all parties involved. There is no magic bullet and there certainly is no magic contract to cover all contingencies that we might encounter while trying to realize a common goal. My message is to start building relationships based on trust now, we need them to grow in order to deal with the challenges ahead.

What makes a good CEO?

In an e-mail exchange following the ‘Entrepreneurship and innovation in the Netherlands’ article, it was stated that project managers are best suited to become CEO’s in these times since they are the ones best qualified to work with multi-disciplinary teams to achieve a target. I had a discussion with a renowned international program manager (Peter Luiks) on this reaction. He is of course of the opinion that program managers make excellent CEO’s ;-)

The definition of what constitutes a project and what constitutes a program is not always clear. Let's assume for this discussion that a project involves a clear target with a limited number of disciplines needed and a program involves setting up an umbrella project from a holistic viewpoint and integrating a number of projects to reach a specific goal. Main differences is therefore size, number of disciplines involved and overall impact.

Both project and program managers know reality drives all events and they know what reality is driving events in their business or process. This insight at the very least qualifies them to take an advisory role to any board of directors. Transparency being such a buzz word of late, a CEO would be stupid not to listen. Programs and projects are run by people as companies are run by people; all need to show visible successes to thrive. For a CEO this quality is essential.

We can identify the following differences between Project management and program management in general:

1. The first is about limiting your scope to achieve your targets; the second is about broadening your scope to be successful.
2. The first is about reaching deadlines; the second is about staying on course.
3. The first is about point solutions; the second about managing situations.
4. The first is about being there for your team; the second about being there for all.

A program manager is capable of a more diverse range of roles than the average project manager. In this sense, the best project manager will not necessarily become a good program manager or vice versa. I believe project managers are rarely good CEO’s because their focus is too narrow. They need clear concise targets handed to them, are very creative at executing in multi-disciplinary teams, but most often lack the kind of creativity needed to self start. They rarely become good program managers for the same reason. A program manager is a political animal without showing it and he or she is self motivated. Is a good program manager CEO material? I don’t know, the ones I thought were really good didn’t want to become CEO. So maybe those are!

Basically, I don’t care where a CEO comes from, the most important quality is leadership! CEO’s are the ones to envision the strategic programs (with a little help from us) and lead them. Lead being the key word here, not manage. That’s where I think collaborative networking comes in; around the strategic programs, multi disciplinary teams tackling issues to come up with solutions and projects to realize them. A CEO is there to inspire, motivate and make sure things move in the right direction. But that’s just my opinion.

Efficiency a risk?

Efficiency is a word that has appeared in this blog several times. Most recently as something that is not enough to save us from the Asian onslaught. Something occurred to me just now and I had to write it down to get my mind around it.

We have made efficiency one of our top priorities in recent years. It started from a competitive advantage PoV and has now been reduced to cost cutting, which is just a subset of competitive advantage. The results are that we have very efficient business processes, very efficient sales processes, very efficient economic processes, et cetera. What we have less and less of is slack in these processes. You know, the room to maneuver if things don’t fit pre-ordained specs. We have become so efficient at what we do that any disturbance of our regular paths leaves us vulnerable.

In short, the more we increase efficiency, the more vulnerable we seem to become and the higher the risks are if something goes wrong. We just don’t see it that way. Why? Because it is hard to let go of Dogma’s and I believe efficiency has become a modern day dogma.

A case in point. To increase customer service at lower costs, we have divided customer requests into categories, automated/scripted the replies, increased efficiency and reduced the number of representatives. Still a large percentage of people do not fit into one of the categories or are not satisfied by the scripted answer. This percentage is making more and more noise and is ruining many established reputations. The people designing and running the customer care centers look at the figures and are wondering what is happening. According to the figures, they are being very efficient and successful. They are not facing up to their vulnerability and to the fact that even small numbers can ruin big reputations. There is a contradiction here that needs to be solved; how do I keep my customers happy without solving all their problems?

I like to make a case here for collaborative networking, people from different backgrounds, working together to solve apparent contradictions. Making a car lighter and more fuel efficient is not a contradiction, it is optimization. Making an engine more powerful and making it lighter is a contradiction. To make it more powerful, it needs to be stronger, in order for it to be stronger it needs thicker walls, with more material it becomes heavier. Only if you bring together people with different understanding of the subsystems and the systems they impact on, can you solve this. It’s a non-linear and relatively unpredictable process until you come up with a solution. The only thing you can do is look at how people have tackled these kinds of problems in the past and use their way of thinking in your approach as a multi-disciplinary team.

That is the dream our network members and I are striving for. The fact that it brings back some humanity in an over regulated system is an added bonus.

Entrepreneurship and innovation in the Netherlands

A recent OESO survey shows the Dutch at the bottom of the list when it comes to entrepreneurship. Two thirds of our population does not want to work for themselves, but wants to work for somebody else. Only ten percent of our listed companies are younger than 40 years, while in the US the number is eighty percent. Another survey shows that people in the Netherlands do not take pride in their work anymore. They only work to be able to pay for having fun outside office hours, for full time employees an average 6.7 hours! It is not surprising we are also at the bottom of the list when it comes to innovation.

I am pretty annoyed with the way the Dutch look at innovation. Innovation is about efficiency and therefore doing things better. We are very good at this! As stated before, it is also about doing better things. The latter is something the Dutch do not seem to grasp anymore. We are still cutting costs (through efficiency of our processes) and only looking at short term financial impact. Margins are only up temporarily because revenues are not increasing. We are slowly but surely destroying the capital we have built through entrepreneurship in the preceding centuries. Since it’s a silent crisis and not a plane crashing, we do not seem to mind or care.

This slow degradation of capital (human, creative, social and financial) is happening in most of our larger companies, our educational system, in our health care, and in our governmental institutions. We do not seem to realize that the still raining Taylor dogma of compartmentalizing our work through defining every process detail in the name of efficiency stifles innovation and the leadership needed to innovate. People are just performing routine jobs, haven’t gotten a clue to what is happening two steps down the road (or up) and consequently don’t care anymore about what happens outside their immediate (very limited) sphere of influence. As soon as you try to step outside the confines of your job description, somebody will immediately cut of your head. Where is the pride in what we do?

We are ruled by fear, the fear of making mistakes, the fear of losing our job, the fear of immigrants, et cetera, et cetera. We pride ourselves in not making mistakes, we pity people who lose their job, we pamper immigrants (or used to) and deny them the opportunity to make something out of their own lives. Once you run a company that doesn’t make it, it’s the end of your career. You did not learn something, you failed! Once you take a risk in a big company and it doesn’t work out, it’s the end of your career, you failed. The only ones floating to the top of our society are the ones who do not make mistakes. Guess how many decisions they made involving any risk whatsoever. I’ll give you the answer, it is probably none!

Excuse me for ranting, but this is why I started this blog. Collaborate and innovate, look at new possibilities and at possibilities in a new way. Follow your passion and work together with people who share that passion and create. Learn from your mistakes and from each other. That is how the Dutch became the first Hegemony this world knew, before the English and before the US. We showed courage, worked together with people from all creeds and shared the risks amongst each other. Let's start exploring again!

Why go for collaborative networking in your organisation?

If you ask a believer, the answer is not the same as that of the average CEO. A believer sees the common good of finding kindred spirits, sharing information and exploring new ventures. Innovation through friction within multidisciplinary teams is a given. Therefore, this is automatically going to conquer the world! Where have we heard that before? A CEO on the other hand needs to be convinced that what we do leads to more revenue, higher margins, or lower costs.

One can only achieve any of these targets by increasing efficiency and/or effectiveness. By not only doing things better, but also by doing better things. Deliver products at a better price/quality level, with better service, et cetera. So far, we have gone down the 'Economies of scale' road. Continuously lowering transaction and interaction costs relative to the number of products/services we produce. The problem is that the knife we're using to cut costs has become more expensive than the costs we are cutting. Especially large firms have compartmentalized their organizations and departments into small dependent units that are extremely efficient at what they do, but have no clue anymore about the outside world while still being dependent on that outside world. So when something happens outside their scope, they act within their limited set of rules. Result; service goes down, a whole batch of products contains mistakes, et cetera. Only the board still sees the big picture and so the board constantly has to step in to set details straight and change the rule set to accommodate incidents. See where this is going?

What we offer through collaborative networking is the ‘Economies of Scope’ way. Not a magic bullet, but a means for your employees to come together, learn from each other and by achieving new insights together, innovate. We let people from different disciplines meet around objects (products) or subjects (service level) and get to understand each other's differing view points on the same matter. This is the basis for creating new insights and in turn is the basis for innovation. Not only do they come up with innovations, but as a multi disciplinary team are also much better equipped to come up with the goods to prove it; a solid business case. Because we are going to support network activities through web based tools, we not only support the current team, but also the rapid inclusion of new members and a means to research the behaviour expressed and together with the University of Twente and the Institute for Network Cultures accommodate the tools to better meet those needs in the future.

Does this mean a CEO can sit back and relax? By no means! He or she has to show commitment to this way of working and reward co-operation and resulting success. Real leadership is needed to motivate the networks to produce and give direction to where they are going. In this sense, nothing has changed; we still need people to inspire us!