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Keith McGregor from Personnel Psychology NZ calls out some of the myths and mysteries around training and development and the prospect of realising change, or not…

Over the years we have run many management training courses and get wonderful feedback (causes a problem trying to get one’s head out of the door). We go back 6 months later and ask the manager how its going and they say “Great”. We ask the staff how its going and they say “How is what going?”. When we ask about the management training they say “Oh, so that where he was for a couple of days”. There may have been a brief flurry of activity and then normality prevailed. How many us can honestly say we have seen a permanent, positive change in managerial behaviour as a result of a management course? This is incredibly ego-deflating and a seeming waste of everybody’s time and money and yet the need is as strong as ever – in virtually every organisation there are people screaming out for ideas on how to manage difficult staff and deal with complex personnel issues.

Via the IONET Google Group

This is a cross post from 3ruce.com

A provocatively titled blog over at HBR (here) by Anthony J. Bradley and Mark P. McDonald questions the much used adage, “people are our greatest asset” (PAOGA from now on). The article raises some interesting points, bringing together ideas around staff engagement, emerging social media and culture. The authors argue that the means with which organisations empower their employees is the real driver of performance and should be the focus of corporate leaders rather than on individuals themselves. Amongst the key factors enabling this are; collective intelligence, emergent structures and relationship leverage. At the heart of these ideas is the assumption that organisations embrace social media and networking.

In their critique I think that the authors hit the nail on the head here;

Even great people are not your greatest asset. In fact, great people can be your greatest liability. If Enron wasn’t enough evidence of this, the 2008 financial crisis has now given us plenty more. What about Lehman Brothers, AIG and Countrywide? Arguably, these companies employed some of the smartest business people not only in the room but in the world, and yet those same folks took their firms to ruin (or near it) and came close to causing a collapse of the U.S. economy.

PAOGA fails to take into account many of the factors that affect performance and by itself it is a far too simplistic or mechanistic perspective. One of the great mistakes made by organisations is to treat individuals in isolation when it comes to development and reward. As the quote above states, seeking to hire the smartest people is no guarantee of success. Instead greater attention needs to be placed on the interactions between individual and above all the role culture plays on decision making.

The whole idea of likening individuals to other input mechanisms does a great disservice to the contribution people make both positive and negative. It also fails to take into consideration the exponential improvements to productivity and innovation that can be made if you get the magic combination of relationships and culture right. After all, if you treat your people as you do any other asset, you are severely limiting the discretionary effort that they are likely to put in.

The rapid growth in the number of accelerator programs in the start-up world  brings the role of mentoring to the fore as a valuable tool for helping emerging entrepreneurs. With high profile programs such as Y Combinator, Techstars in the US and Springboard, Seedcamp, Startup Bootcamp, Oxygen and Mola amongst others in Europe. Following a similar model, start-ups are given office space cash and access to industry experts, in exchange for a small slice of equity. At the end of the three month program they then present to investors in the hope of securing further seed funding for their products.

Apart from hard cash, one of the key elements of the accelerator program offered to nascent companies is a mentoring. Mentors are usually sourced from a wide talent pool that includes individuals with practical experience in areas directly relevant to start-ups. This can include individuals experienced in; VC investment, PR, business development, finance and more experienced entrepreneurs. What is the value of this to young companies? At first glance, the top line benefits would appear to be the opportunity to tap into the mentor’s experience and gain feedback and insight into the problems they are grappling with. Secondly, gaining access to the mentor’s contacts book could also help open doors at a crucial stage. Both of these benefits would appear to be an invaluable opportunity for young companies.

However, I would argue that this access, whilst nice to have, will only have a limited impact on the long-term development and performance of young enterprises. In actual fact,  mentoring can be much more powerful and have a far more profound impact, however there is a caveat. Rather than dealing with the practical and specific day to day issues, the greatest upside potential in this situation is for the mentor to help the start-ups deal with and manage the huge amount of uncertainty they are dealing with. In other words rather than seeking specific answers to questions, the mentor can provide a far more valuable service by helping the start-ups figure out what are the right questions to ask.

Concentrating on asking the right questions, an ability to question ones own assumptions and dealing with inherent uncertainty is arguably far more valuable in the long-run than getting short term answers to questions and practical issues. The problem with seeking answers rather than questions is that despite their best intentions, mentors may not be able to provide optimal guidance based on their own experience. What may have worked for them in the past may not be the correct course of action for the entrepreneurs they are mentoring. This is especially true in the world of tech start-ups that accelerator programs inhabit.

The caveat to this approach is that this type of mentoring  requires a very specific relationship dynamic between mentor and mentee. Where a conducive dynamic does not exist, no amount of effort on the part or either mentor or start-up is going to result in a productive outcome. Where strong relationships underpin the mentoring process, it becomes less about the transfer of explicit knowledge and insight but instead far more subtle and potentially rewarding.

I would argue that it is far less important for mentors to have experience in an area that is perceived to be compatible or beneficial to a start-up than it is to have a relationship with strong learning and collaborative potential. This approach forces both parties to look beyond what is obvious and encourages a more considered approach based not on seeking answers to questions but figuring out what are the right questions to be asking, in this case it does not matter if the mentor has the answers or not. By taking the time to understand the way relationship dynamics will affect this process, it becomes possible to develop a program that offers far greater long-term potential to young entrepreneurs.

A couple of articles dropped into the inbox last week that seem to confirm that despite decades of experience, organisations are still struggling to unlock the value in mergers and acquisitions. First up, a McKinsey survey (here), tells us that despite an uncertain economic outlook, M&A is still prominent in the minds of senior executives:

nearly half of the respondents expect their companies to explore more deals in the next 12 months than in the past 12, and small majorities expect them to start or complete at least as many, if not more.2 In addition, nearly half of the respondents report that their companies are looking outside the core business for new ways to grow.

No doubt, this is good news for nervous corporate financiers in investment banks worried about a diminishing bonus pool. However, shareholders and other stakeholders may not view this survey with quite as much relish. This is because within the survey there are clear indications that the ability and vision to successfully execute the basics is still lacking in even the largest companies:

The results also indicate that many companies still need to build critical capabilities, including integration planning, responding to cultural issues, and establishing standardized deal teams. That effort may well be complicated by a striking number of areas in which CFOs’ opinions differ from those of other C-level executives on topics as basic as which deals to do and what capabilities a company has.

The basic question this prompts is that with so much economic uncertainty, why would organisations appear to be so bullish to take risks on transactions that are notoriously variable in outcome? Personally, I think that this comes down to skewed perceptions. M&A is still seen to be a quick fix, an additive process. However, as with many things, people tend to oversimplify the complexities of each situation. Rather than two plus two equalling four, in many transactions two plus two has gone on to equal three, or even worse. In many ways these acquisitions are the ultimate example of the role of unintended consequences.

Clearly, a more subtle and nuanced approach to M&A is required. This has to do with having a greater understanding and appreciation of the intangible aspects of each transction. This requirement is highlighted over at Strategy + Business (here)  in an article by Barry Jaruzelski, Marian Mueller, and Peter Conway who list some great points about common fallacies and misconceptions about the way to manage the acquisition process. The broad theme of this is that organisations fail to appreciate that each deal is unique, requiring a tailored approach to the key factors. This combined with an overestimation of the organisation’s own capabilities reduces the chances of a successful outcome.

Whilst the mechanics of M&A are well understood, the existence of these articles and many others like them show that organisations still struggle with the more intangible side of transactions, namely the people and cultural issues. Maybe this blinkered approach has something to do with the people in charge of acquisitions? Arguably, the managers in charge of acquisitions are too keen to focus on what is certain and easily quantified. When looking at an acquisition the tendency to focus on the black and white numbers of the deal is a common error. This is touched on in the S+B article:

Many executives assume that if the financial arrangements are secure, the rest of the deal will follow. But all deals have two other significant factors to consider that are often not accounted for in the numbers: the human element and the need to develop the capabilities required to succeed in the new or merged business. This is especially important if the new business model is different from the company’s established model. A comprehensive due diligence process should take into account both the cultural and capability aspects of the deal.

This transactional viewpoint dramatically underestimates the complexity of M&A integration. Organisations by their nature are hugely complex, I’m not talking about the systems and processes that need integrating, this is complicated but not complex but the act of integrating two distinct organisations with different values, culture, behaviour and relationships. Unfortunately use of the standard organisational chart to understand the entity you are trying to integrate is a useless exercise in hubris. By looking beyond that which is most obvious acquirers need to understand the network, culture and relationships they are buying as well as the more tangible assets.  For example talent drain is a key issue with many acquisitions, yet it is simply not enough to look to identify the star performers or “talent” in the target company without an appreciation for the networks and context that enable these people to perform.

Acquisitions need a fresh pair of eyes and need to be driven by people with a different outlook. The fact that we are still seeing articles like the one at S+B is a clear indication of this. Instead of the traditional M&A leaders, the finance and operations people, how about letting acquisitions be managed or designed by people who understand and are comfortable with the language of complexity? This could include people from a variety of disparate fields such as network scientists, anthropologists, brand experts and psychologists. As well as limiting the downside of transactions, a more diverse approach would also increase the upside by helping understand the possibilities of greater integration and collaboration.

HRVendornews (here), highlights a new survey from Right Management and Chally Group that reports some interesting findings about the causes of corporate leadership failure. Among the more eye-catching figures are:

“Failure to build a team or relationships was singled out by the most (40%) survey respondents,” said Bram Lowsky, Executive Vice President of Right Management. “Second was mismatch for the corporate culture cited by 26%. Remarkably, not delivering acceptable results was named by just 11% of respondents as among the main three causes for failure”

This is all very interesting, not least because key drivers of leadership performance seem to be intangible factors rather than more quantifiable indicators of performance such as prior experience, education or aptitude and ability. Unfortunately for the majority of organisations, these seeming less valuable metrics are the ones that are most obvious or easiest to gather and have historically been given undue weight when making leadership decisions.

Maybe organisations could avoid the most damaging leadership mistakes by adopting a different approach? Moreover, perhaps the key to successful leadership development is not the identification of aptitude for certain tasks or responsibilities but a more open-ended and abstract idea about the role of “fit”? This would help explain one of the most perplexing problems of leadership, namely why some people are naturally able to achieve great things in one situation, whereas they cannot replicate that success in a different role or organisation. This brings to mind the fierce debate started by Bill Taylor over at HBR (here) about the value of corporate superstars. Maybe what these numbers are telling us is that it is better to have a leader that fits the organisation than it is to go out and hire an industry superstar?

Effective leadership, invariably involves situations where the leader is a good if not great fit with the underlying organisational culture. It is hard to argue that someone like Richard Branson would be as effective a corporate leader in an organisation that was inherently bureaucratic or risk averse. In other words great leadership is about the serendipitous confluence of personal characteristics and organisational context. In other words, the right person in the right place at the right time.

However, the report indicates that organisations still place significant emphasis on industry experience and track record.  This is borne out by the  numbers, with 73% of HR respondents citing track record as an indicator of leadership ability. However, I’d question this assumption. Is industry experience or track record a reliable indicator of performance in an unrelated or different role? Personally, I am sceptical. Of course leaders need to have credibility and ability, however beyond that I would argue that being able to develop strong and robust relationships with immediate colleagues and understand the culture that enables strategy to work with the culture is more important than in-depth industry knowledge or success in previous roles.

The fact that culture and relationships are intangible and highly complex inevitably leads to organisations focusing on more concrete or tangible. Why try to get to grips with the complex when there are easily available figures in black and white that everyone can understand? The good news for organisations is that with new tools and greater understanding of the intricacies of culture and relationships, it is now possible to place these key intangibles in a more systematic framework. Culture and relationships do not need to be implied but instead can be openly discussed and compared. There are now methods that can be used to take some of the guesswork or gut feel out of these big decisions. In fact organisations that want to get ahead should be looking at this issue in far greater breadth, the question of fit should not be confined to the upper echelons or the C-Suite, instead it should cascade down to all levels and inform the identification and selection of talent throughout. When making any decision about recruitment, promotion or team composition the question of “fit” should be uppermost in everyone’s mind.

Welcome to the final round-up of 2010. In this issue we have brought together an assortment of provocative articles focusing on;

• Complexity
• Training
• Systems Thinking
• Being Counter-Intuitive
• Innovation
• Conclusion

Featured in this issue are articles from: Steven Johnson, John Hagel, Peter Senge, Richard Donkin and examples include HCL, the NHS, Minnesota public schools and the Roman Empire!

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A classic (it was published in 2005!) from Stowe  Boyd on Social Software. Much of it has come to pass, but its nice to look back and see the connections. I particularly enjoyed his conclusion, the full effects of which are still a long way off…

Perhaps just as interesting as the way that social software is transforming group interaction, across different time zones or in the same room. Social software is destined to have a huge impact on how businesses get at their markets. So the essential elements of social software will be incorporated into more conventional software solutions, changing the way collaboration and communication is managed within and across businesses, and ultimately transforming how companies sell and interact with customers.

There’s a now a video demonstration of 4G on the Management Due Diligence page. You can see the video below, or on the Management Due Diligence page.

Management Due Diligence Video Demonstration

Welcome to the Q3 Quarterly Update for 2010. After the Summer lull, we have seen some thought provoking articles surrounding intangibles, HR, innovation and leadership. We’ll also explore the following themes;

• Compensation and Motivation
• The HR Conundrum
• Relationships
• Culture
• Talent
• Conclusion

Articles are included from the likes of AT&T, the Financial Times, Hay Group, Hewlett Packard, Science Magazine, Wharton Business School and Zappos.com.

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Justin Kirby was very kind to do a writeup of our contribution to a NESTA funded research project he was involved in.

These ideas aren’t dissimilar to what I wrote about re: Jackie Orme and I’ve added a short extract below.

Many large organisations claim to have excellent and world-class capabilities in:

• Business processes
• Collaborative software (video conferencing, blogs, wikis etc.)
• Developmental support (workshops, training, coaching, learning etc.)

What appears to be missing from the client perspective is a methodology, system or tool (e.g. Kaplan Norton ‘Balanced Score Card’, Six Sigma, etc.) to help optimise collaboration, working relationships and productivity, particularly if a new
project is starting or a new initiative is under way.

So while the three areas mentioned earlier are very well understood by the majority of large organisations, a means or method to ‘scale’ collaboration and help enhance productivity in a systematic fashion is potentially a missing piece of the jigsaw.

By providing a systematic methodology and framework for decision making, research participant Bruce Lewin of 4 Groups has suggested that their 4G technology helps optimise the often ‘hard to manage’ or intangible elements of collaboration, namely working relationships, shared values and creative tensions that are part and parcel of any collaborative activity.