Risk… what does it mean?


For some, it is crossing the street. For others, it is starting a company with the last of their own money, or money from an expectant and hopeful investor.

But, what does it mean for companies/customers? Ultimately, I think it drives everything at a company. For some companies, often publicly traded, risk is not an option. Everything they do must have a strong business case to produce more revenue with little or no risk. Smaller companies tend to be much more willing to take risks. Sometimes it’s the only way to get the growth they so desperately want and need. In between you’ll find many companies along the willing-to-take-on-risk spectrum.

How do you convince your company or customer to take a risk?


One way is to downplay the risk. Not a good idea. It can, and likely will, bite you in the end. No, you must address risk head on. You must out weigh the risk with the potential benefits. Show examples of success. Find and present metrics from those that have gone before you. Show the potential benefit the customer/company can recognize if they accept the proposed risk. Even after all that, you may only open the door to considering an improvement project. It does not guarantee a person or company will proceed.

You must address the risk


Address the risk head on. Show how you, or your company, will mitigate risk throughout the venture. Always keep in mind the customer’s or your company’s view on risk. It could be as simple as a loss of the investment into a project. On the other end of the spectrum could be lost customers, lost revenue, or even lost jobs. By not dismissing the risk, but acknowledging it and trying to prevent it, it shows your commitment to the customer, whether internal or external. It shows you are a partner, not just someone trying to sell an idea and run.

In the end, everyone wants to grow. Very few want to take the risks needed to grow. If you’re trying to help your customer or company grow and improve, you must prove you will do everything possible to manage risk, but not dismiss its existence in the first place.

Assessments help organizations avert risk

Are you in the process of accepting risk in order to improve, grow, or move in a new direction? We offer many solutions that can help mitigate risk — solutions and services with proven track records that adhere to best practices. We also offer a Product Development System Assessment (PDSA) and Functional Group Assessment (FGA) to help align organizations, define strategic direction, and help map the best course forward. Download our PDSA brochure or FGA brochure to learn more. Please share your experience and thoughts about accepting and managing risk in the comments below.

Cheers.

In the last post we talked about how the tennis doubles team, the leaders of the time box system, create productivity. In this video we’re going to talk about how the development team is naturally predisposed to be increasingly productive.

With the management burden handled by the leadership team, the members of the execution team are freed up to focus on the work itself. A key part of their work is “dialogue.” It’s a process called grooming and the term as well as the activity is borrowed from a software development system called Scrum.

During regularly scheduled periodic “dialogues“ all members of the execution team focus on four attributes of the execution of the requests. One is the work itself. They refine the work, breaking it into smaller and smaller chunks. Eventually the work is a size that can be executed within a single time box. They also focus on an estimation of the effort required. This allows the team do a collective estimation of the work required and is used to match the available capacity of the time box to the work.

Also during this dialogue they talk about quality disciplines and what quality disciplines need to be brought to whatever work they’ll be executing. E.g. whether any work will need a design review or a drawing review, etc. There is general discussion about what quality disciplines to bring to the work.

Finally they discuss possibilities for cross training or mentoring. They discuss whether any work would provide the opportunity to allow a member of the team to be mentored or cross trained during the execution of the work.

In this “dialogue”, the grooming exercise, first you have the goal of the project itself; a shared vision held by the team, but the dialogue provides a shared vision of the execution path to complete the work. The dialogue also leads to an analysis of what work should be done, how much discipline should be brought to it, etc. During this dialogue everyone’s worldview and perception of the work is brought to the surface.

In Peter Senge’s contention everybody’s “mental model” is brought to the surface. The team aligns on how to execute the work as they go through the analysis and dialogue. The alignment of the team to the work is, again in Senge’s context, team learning. The ability to take work not assign it to the person that would normally do that work, but instead turn them into a spontaneous mentor and have someone else execute the work, is a chance for the team members to increase their personal mastery in a particular discipline.

So we have Shared Vision, Mental Models, Team Learning, and Personal Mastery — four of the five disciplines of Senge’s “learning organization.” The only missing discipline of a learning organization is Systems Thinking. Of course Systems Thinking is the dynamic of the operation which all of this series is meant to focus on. So, you have the fifth and final discipline of the learning organization also involved in the organization of time box learning.

The learning organization of this product development team is critical because learning is sighted by the other Peter, Peter Drucker, as one of the 6-Keys for creating high productivity amongst knowledge workers. And it is the focus of EAC to use Systems Thinking and the learning organization context to reform the operation of the American approach to product development.


Contact us to learn more about how Systems Thinking and the application of our Product Development Operating System can help your organization become more efficient, productive, innovative, and competitive.

Follow Bill at http://www.twitter.com/systhinking

The saying “nobody is perfect” also applies to companies because no companies are perfect. Many organizations struggle with issues like getting their processes documented and their data management under control. Sometimes it is the members of the team that manage to hold it all together and enable substantial growth. However, this approach typically is neither scalable nor sustainable.

At EAC, we have a service called the Product Development System Assessment (PDSA). In short, the assessment helps identify areas within an organization that could improve — whether it be processes, data management, communication, or organizational change. We have helped companies across the country identify areas of their organizations that may not be reaching their full potential and provide them with a personalized roadmap for improvement.

One such company, Thermos (yes, Thermos — the company that made your really cool Spiderman lunchbox as a kid), has worked with EAC to identify areas where their organization could improve. “Hot Matters. Cold Matters. It Matters,” Thermos’s corporate mantra, not only identifies with their well-known product, but also refers to their high standards of quality, safety, living green, and giving back.

Over the last decade, Thermos has experienced tremendous growth. But as VP of Marketing Julie Ryan said, “We’ve got a great team and what we’ve been doing for the last 10 years has been working. But what’s making it work is the people — not the process.”

EAC was able provide a roadmap that included implementation of a project management system. This would allow Thermos to begin building a foundation that will support and sustain growth. Because let’s face it — Hot Matters. Cold Matters. It Matters.

As we visit companies performing assessments and providing consulting services, we commonly experience some level of resistance to change.  That is to be expected.  First it is well understood that change is difficult to embrace.   Moreover, we are often working with active or former engineers for whom skepticism is a recognized strength.  And although there is often a shared perception among our clients’ employees that things need to change, there is usually significantly differing perceptions on the specifics of what must change and how it should change.
It is interesting to us that when we encounter similar individuals in other environments there is a distinct shift in their receptiveness to change.  One other environment is at seminar events that EAC sponsors a dozen or so times per year.  At the seminars, we are consistently engaged by thoughtful product development leaders and contributors who are looking to discover insights that can be used to improve their systems.

A part of the cause of this change is clearly that the work environment is consumed by practicality, while the seminar environment balances both theory and practice; good theory is after all the basis for good practice.  The engagement with theory creates an openness to learn, and an attendant openness to change.

Our hypothesis is that within the political structure of their own companies, individuals invest a significant amount of their energies defensively blocking efforts to create change until they can be sure that the proposed change is not ‘yet another dunderheaded idea that will actually make things worse’.  In the seminars’ external, neutral environment they are free to drop their committed defensiveness and to engage with less defensive positioning and more open-mindedness.  We should add that our seminar events are presented as learning events and not selling events in an attempt to create an environment that supports open-mindedness.

In our internal discussions on this idea, a collaborator shared the story of his experience with counseling.  After his divorce, he participated in a group therapy with a dozen other men who were all still married but having severe problems in their relationship with their spouses.  Our colleague was attending group therapy to work through the similar issues that led to the dissolution of his marriage.  Every week, he said, he would leave the session and spend the next day reflecting on the discussions and shared insights.  His twelve fellow group members would return to their difficult environments of a hostile relationship and relapse into habitual behaviors.  After a short period of time, feeling he had worked through his issues, our colleague made his goodbyes and graduated from the therapy sessions.  As he left, he felt that none of the other individuals had made any significant progress towards a better way of managing their situations.

In reflecting on this, we become concerned that the enthusiasm and commitment to improvement that we see at the end of our seminar events dissipates quickly when the attendees return to their less neutral environments.   To help extend the half-life of the positive bias carried out of our seminars, we are exploring additional services that can provide a buffer for post-seminar improvement advocates.  We have discussed delivering more seminars directly within companies rather than in public venues, to create an internal network of mutually supportive thinkers.  We have discussed organizing peer learning and discussion groups in our served regions where individuals from different companies can serve as an advisory board to one another.  As we explore our role in extending the half-life of enthusiasm and commitment, we would love to hear from you on how you think we could better serve this market need.

When contemplating the idea of writing a blog, I challenged myself to justify why it would be both worth my time to write, and worth yours to read. The hope is that working through self-justification will result in a blog of greater interest and value.

Sharing the motives behind this blog through self-introduction seems the right place to start.  By self-introduction, I don’t mean telling you about myself — you can find all that on LinkedIn — but rather about EAC and our shared view of product development. EAC was founded and operates on a fundamental belief that the way we (you) execute product development is fundamentally flawed.  We further believe that this deteriorates America’s competitive position and unnecessarily, unacceptably demotivates the expert knowledge workers who operate within the functions critical to product success.

As an achievement-focused organization, EAC seeks first to understand the drivers and root causes of the positive and negative behaviors typical of product development environments. We then engage in the competition of ideas to produce an array of countermeasures to bring to common product development problems. One output of this internal collaboration is the Product Development Operating System (PDOS), a framework for the conduct of successful product development published on the EAC website.

An element of the PDOS gets to the heart of justifying this blog. In the PDOS, we use a maturity model to articulate an important aspect of improvement efforts within product development. Limited by flawed management habits many companies become trapped at what we call Level 2 operation, “Silo’ed”. During the maturation of a product development system, the gap from Level 2 to Level 3, “Systematic”, is the most difficult to bridge. It is EAC’s mission to help product development organizations, to borrow a phrase, cross this chasm.

Siloes are interesting. In companies, they are at first a sign of progress. The generalist of entrepreneurship reforms into specialized functional areas, enabling further growth and maturation.  But they eventually become a barrier to further organizational progress. That’s not surprising; Peter Senge tells us in the first law of systems thinking that “today’s problems come from yesterday’s solutions”. For these maturing companies, getting beyond the silo mentality is one important key to progress.

Earlier in my career, I spent several years working in Japan at a global manufacturing company.   Japan during the course of its history had periodically shut itself off from the rest of the world. The Japanese talked about their resulting global naivety — knowing and caring about only what happened within their limited domain – as ‘ii no kaeru’, a ‘frog in a well’. A well is just an upside down silo. For functional groups, understanding their own bigger picture – the landscape in which the well or silo exists – is the first step in the work of connecting the silos and fostering systematic operation.

EAC conducts Voice-of-Customer interviews, performs Product Development System Assessments, and provides consulting services. During these events, when we visit prospects and customers, it is startling to see how hungry each company’s product development thought leaders are for stimulating and informative ideas and discussions about what can be done to improve product development operation. And that is how we justify this blog. To all of you who from time to time feel like a frog, this blog is aimed at letting you know what’s going on outside of your well.