With the news today about Penske breaking off talks with GM on their deal to buy Saturn, I thought it would be fun to revisit my post on this topic from back in July. Given the over abundance of car brands, and the lack of differentiation in the market, take a look at this idea and see if you want to invest. I really think it could work!
I’ve been around a lot of teams… and a lot of team building. Enough to be cynical about the whole topic. But something about the potential of people working well together keeps me coming back to explore further.
The famously successful Netflix contest awarding $1 Million to anyone who could solve their movie recommendation problem is a great case to illustrate how creative teams are different than traditional work teams.
The leader of the winning team credits their success to blending different approaches to the problem and coming up with something better. This is one of the things that powers successful design teams at IDEO. That is, teams comprised of diverse perspectives and styles are better at solving complex problems than teams of like-minded, similarly trained members.
One quote in a NY Times article about the Netflix Prize really got my attention:
The sort of sophisticated teamwork deployed in the Netflix contest, it seems, is a tricky business. Having these big collaborations may be great for innovation, but it’s very, very difficult. Out of thousands, you have only two that succeeded. The big lesson for me was that most of those collaborations don’t work.
Tricky maybe, but that’s because much of the conventional wisdom about running a good team is wrong under conditions of uncertainty, not because it’s inherently hard to accomplish. Most people think of teams as a group effort where you divide the workload among a cohesive band of players, led with clear directions from a focused leader. Under this model of teaming, diversity is bad and discontent worse. So with this dominant mindset, it’s no wonder the concept of multidisciplinary teams is so hard to handle.
Given the value created by multidisciplinary teams, there’s a growing body of insights developed by people like Jeff Polzer and Daniel Wilson that show us some of the tricks multidisciplinary teams employ to overcome the barriers of their diversity.
And, if you are working on a creative task or solving a complex problem, the effort pays off. Just ask IDEO.
Here’s some keys to getting multidisciplinary teams to work (pardon the academic lingo, but you’ll get the point)
1. Proactive Self Disclosure: teams effective at solving complex problems must thrive in uncertainty. It’s more functional to share when you are stuck or “don’t know” than it is to pretend you do. Daniel Wilson studied adventure racing teams and found that the “best of the best” quickly share their needs, issues and concerns so the others on the team can rally around them with proper supports and solutions.
2. Conditional Statements: Instead of stating ideas as facts, certainties, or “THE” answer; members of successful problem solving teams share statements with soft edges like, it might be… I’m not sure but… and could it be that? These statements invite others to disagree or add to the comment versus attempt to be persuasive, conclusive and to convince others to go along.
3. Interpersonal Congruence: This means that members of a group view each other the same as they each view themselves (strengths, weaknesses, intentions). Jeff Polzner’s research shows that groups can achieve harmony and produce effective work processes by expressing rather than suppressing the characteristics that make them different.
4. Clarity of Purpose: when all members of a team are clear about the reason they are together, it’s easy for them to “triangulate” away from polarized opinions and use the common purpose to discern the best of each side’s argument. Rather than compromise to reduce conflict, this common purpose (like the Netflix Prize) pushes people to breakthrough ideas.
When you say you are going to do something and then do it, you build trust, and trust is a value creation platform. When you say you are going to do something and then don’t, it can get expensive. Usually in soft, hard to track missed opportunities. The immediate costs are often quite low… sometimes you even feel a small gain. But with a slightly larger lens of time, not having people trust you can cost a lot. So it pays to say what you’ll do, and do what you say.
I experienced this at a store this week. I got a card for $80 off at Lens Crafters from work… seemed like a good deal and worth giving Lens Crafters a try although I would not normally go there. Check out the card below, it seems like a pretty open deal. It even mentions “designer eyewear.”
Upon arrival at the store, I learned that Oakley products were excluded. Oh, and not Maui Jim either. I came to order a set of prescription lenses for my Oakley frames, so I pressed the issue after reading the card again. There’s no mention of any kind of exclusions, although I can see that it says “complete pair”. So I ask if I have to get new frames to qualify. “No, Oakley doesn’t let us give discounts on their products.” I ask her to read the card and show me where Oakley is excluded. She can’t find that anywhere. I press further, and she gives me a corporate business card and suggests I call there. I find out this is not a toll-free “help” number, but the main line to the corporate headquarters. I get to a Service Representative and he asks if I’ve spoken to the General Manager of the store. He sends him an email and I get a call back. He says, “Sorry, Oakley is excluded.” I let him know I think this is a “bait and switch” and I don’t want to do business with a company that isn’t good for their word. We conclude the deal and I am done with Lens Crafters… probably for life.
Let’s estimate what the costs might be:
1. I buy new glasses every 2 years x 40 years= 20 $300 pairs they won’t get ($6000).
2. I tell all my friends that this is not a good store. Let’s be conservative and I affect one person for one visit at $300. Or, say I affect 5 people for life = $30,000. Hard to say what will really happen here.
3. I go to YELP and give them a bad rating. Could be hundreds of people who check that before shopping. Lets just say 100 x $300= $30,000.
This is fuzzy math, I realize, but it’s easy to imagine that instead of an advocate they’ve created an enemy. They put the card together, sent it out, and then refused to honor it. They could have said $10 discount on any frame, with some exclusions. But they didn’t. I’d call that poor execution in this promotion.
The cost of poor execution and then refusing to honor it is much higher than simply honoring it. Sure, if they honor it, they risk me telling my friends to go get their Oakley lenses for $80 off. But that’s a very small number of people, and the card has an expiration date of September 2009, so the exposure is limited.
We’re moving downstream of the GM break-up so this post is obviously not going to help GM explicitly, so listen up folks at Penske! This is about how to imagine SATURN as a (really) different kind of car company. The brand heritage points us in this direction, but the operations history never quite got there. While establishing itself as a new car brand, the most significant difference in their approach to running the company was the creation of a new dealer network from scratch, and calling it a retail network to indicate a stronger belief in customer service as a competitive advantage.
Using the organization ecosystem model from the first post in this series, I would place Saturn in the “independent” corner and really push the envelope on how to design, build, and market a car using an open source model, borrowed from the software industry. As you know this model has produced some amazing products like the browser Firefox from Mozilla.
In fact, some of these ideas are already in rough formation. From Wikipedia I’ve learned that Penske will not be buying the GM factories and will eventually have other car companies build cars sold as Saturns. At this point, GM will build the Aura, Vue, and Outlook for Penske for two years. To replace GM as the brand’s manufacturer, Penske is in discussions with several global automakers, including Renault Samsung Motors of Korea.
What if they really push for something different and create an open source project for each model? With the Penske passion for cars and the SATURN commitment to customer service, it’s not hard to imagine a really cool hometown facility that attracts car nuts with prototype vehicles, computer workshops, and a heavy dose of car culture. Rather than staffing these “stores” with sales people, SATURN could staff them with car designers and engineers that help guide the process and manage the inputs via the open source process. Interested players could be organized in “pit crews” who develop relationships with each other over time and work on specific elements of the car prototype. Perhaps stores could work in regional “car craft” networks that involve small scale manufacturing and parts suppliers in the creation of regionally specific models.
Once the prototypes are in final form and are on the road being tested, contracts with larger manufacturing companies could be established to put the vehicles into limited production. The viral connection to each model would be a grassroots sales force that would bring back the days of localized automotive pride, only it would be distributed throughout the country instead of centered on Detroit.
I’m sure many of you have seen the recent column by Jeff Pfeffer in BusinessWeek. It’s a very nice analysis of the flaws in corporate performance reviews. I respect and agree with everything he says in that article. And, I think there’s a more fundamental issue underlying the failure of performance reviews. The whole concept is backwards.
It’s designed to manage performance as if it could actually be managed. In order to actually manage performance, a manager would have to be present while the employee works a great deal of the time. When a person starts to veer off “best practices,” the manager could then intervene with helpful comments and suggestions, or in extreme cases simply whack the person with a ruler to keep him in line.
Sounds crazy doesn’t it? Managers can’t do that, they’ve got better managerial things to do. Performance reviews are designed as if people were machines that need annual maintenance to fix broken parts or an upgrade to new software.
In a human-centered model, we’d assume that an adult worker of normal abilities would be able to understand the task at hand, and apply skill and judgment to meet work goals. In this system, we’d assume that the person would be motivated to do a good job and be curious about how to do it better. This might be a stretch too, but given the choices, I think this approach has more potential.
Yes, it’s a major shift in paradigm, but it’s one that aligns with the people who are already doing well, not with the people who are not. That is, people who are successful at work and in life tend to ask questions, learn, and grow. Why don’t we design processes, tools, and practices that support the more successful people, not prop up the weakest links? Call me Darwin if you will, but I believe this approach will help those who aren’t behaving in the most successful strategies shift towards them (not get left behind).
For a great example of this approach (helping successful people do what they already do better) is Rypple. It’s a platform for asking questions and giving feedback that’s driven by the only person who really cares about your performance… you.
There’s a great post on CNET about the Future of Capitalism. I won’t retell the whole thing here, but it provides a great answer to my previous post, If feedback is so great, why is it so hard? It’s not a direct answer, but see if this makes sense: feedback is hard because it acknowledges that control of your future involves lots of other people. And this feels scary, arbitrary, and unpredictable.
If you are working in a job with a boss, you can work with that one person to agree on your future. If you have a bad boss, this isn’t so great, but you can go find another more agreeable one and move on up. This is the source of much of the negative political behavior in today’s stereotypical corporate environment.
If the future of capitalism involves recapitalizing assets that have been undervalued, then behavior strategies popularized by characters like Michael Scott of The Office are doomed.
Your talent represents a great asset… something you can trade, hedge, remix, or share to generate value that others will buy. So you can use your talent to work in Chris Anderson’s “Free Economy” to earn a living. But you have to invest with your asset and add value to the abundant, free resources through aggregation, synthesis, distribution, and other means of improvement. You must use your knowledge, skill, attributes, and experience as a unique lever to create new things like a service experience, an insightful article, an assembled computer, or beautiful music.
In the days when a person worked a lifetime for a company (or a land-owner), the responsibility to take care of your talent belonged to them. And all benefits of using your talent went to them. In this emerging new economy, technology has enabled you to benefit directly from your talent like never before. I won’t get into all the political scenarios being mentioned out there, but the bottom line is that individuals have increasing freedom to make something happen in their lives if they aren’t happy with the more traditional approaches to work.
But freedom comes with responsibility (darn). And this is where the answer on feedback comes in… markets are really good at finding stuff that works, and even better at culling out stuff that doesn’t. Feedback is hard because it involves finding out what parts of your offer are not working for others, and often represents resistance to your aspirations. And it’s not only your opinion that counts, it’s the opinions of the social group around you that assemble into a shared reality-of-you that count. And feedback is the only way to discover and make sense of those opinions.
Investing with your talent in this kind of economy can be extremely uncomfortable. As the saying goes, The truth will set you free, but first it will make you miserable.
Is it just me or does this strike you as odd? I have a Google feed that sends me a daily digest of messages that include the term feedback. I get hundreds of them! Many people have suggestions for how to ask for and give feedback (including me) and many people talk about why it’s so important (like this post). I’m curious why it’s such a hot topic, yet why it’s so infrequently discussed in a positive light. So, I’ve been trying to apply design thinking to this nut to see if I can crack open some new insights and ideas. Here’s some of what I’m gathering. Feel free to join in, and I’ll keep you posted as it moves along.
- I have a friend who shares completely about what she’s thinking and seems to be very provocative in how she “pushes people’s buttons.” For example, she has her young son get his toenails painted and lets everyone know that it’s important to do so… She rarely asks what other people think, mostly she tells stories.
- I work with someone who rarely states his opinion, but asks amazing questions to get people to explain more about their initial comments. When he starts to form an opinion about something he often presents it as a question (but not in an annoying, “what I hear you saying is…” kind of way).
- Feedback is all around us, from facial expressions, to body posture, to words (and sounds).
- People shy away from telling “the full truth” about their opinions.
- Some people are tuned-in to other people’s reactions, suggestions, behaviors.
- Some people seem oblivious to how they affect other people.
- I put some post-it notes on our door at work to get people to ask questions about things I care about. It seemed to work, and be fun. It seems that not overstating something is more inviting to others than presenting a complete or definitive thought.
- I’ve used Rypple to ask others questions before a meeting to help me understand what they care about and expect. It was very easy and helped me create the agenda.
To improve my diversity of input and thinking, I’ve been reaching out to other people interested in exploring this topic, and have started a new “learning collaborative” with my friends at Rypple. We are hosting our first design session in August and have gotten some great people from some great companies to join us. At the first session, we’ll have folks from IDEO, Mozilla, Pixar, Method Home, the Federal Reserve Bank, Electronic Arts, Kiva.org, and more. I hope this amazing collection of people working in a design process can helps get some real traction on feedback.
Now this is how to leverage the web! Check out a new song by Dave Carroll called United Breaks Guitars. And for more on the story behind the song visit Dave Caroll Music. We’ve all had frustrating experiences with poor service and it’s really amazing that such a scene can actually occur. I myself had a small tiff with a stewardess… I mean flight attendant… on United recently. She wanted my 2 year-old son to leave the seatback phone in the holder and I thought the relative value of the inflight phone service (nearing zero) and the distinct advantage of having a 2 year-old entertained while the flight boards (priceless) were a good trade off. My wife was worried I’d get us kicked off the plane for an FAA safety violation (see Ben Stiller in Meet the Parents) but I backed down.
It is quite fun to poke at these people for being so mean, difficult, or otherwise ornery. But the real issue isn’t the person involved, these incidents are symptoms of a much larger core issue. Bad service comes from companies that don’t take care of people. United isn’t about “destination management” they are about airplane management, so they emphasize mechanical and safety issues, not human ones. Sure, they say they are there for “your safety” but really they are there to control things. When Southwest Airlines hit the scene with an emphasis on people and the customer experience, they immediately became the most profitable airline around.
Another example is the battle between Microsoft and Apple. While Microsoft has a clear advantage in revenue and profitability (so far), it is clear that customers prefer the Apple experience. When a single business can dominate an industry so fully like Microsoft or United, they can get away with poor service because customers can’t vote with their wallets. But as soon as that advantage is removed, the crash and burn is inevitable (and fast)… as in Kmart versus Walmart.
I think this is so obvious I can’t imagine why other businesses don’t pull it off. But just in case it’s not that clear to everyone, here’s a few reasons it works:
1. People make buying decisions, so treating people well leads to more favorable buying decisions.
2. The loyalty effect is an important driver of sustained profitability.
3. If you want your customers to be treated well, you MUST treat your employees well. See the Service Profit Chain for more on how this works.
Got any more points to add?
I was going to go with Saturn next, but a tweet from Diego on Metacool got me motivated to play with SAAB. He says, SAAB should get back into rallying, which lends support to my understanding of this brand.
Technology, cool, edgy, unique. Born from jets. Svenska Aeroplan Aktie Bolaget is Swedish Airplane Company in Swedish. Somewhere it all fell apart and they ended up another mediocre GM-mobile that had no style, no technology, and poor quality.
The organization behind an edgy car has to be edgy. This is called brand integration (the outside and the inside have to align). To create edgy things, people have to take risks and push the envelope. Edge is by definition NOT THE MAINSTREAM. Okay, I’m ranting… but it’s amazing to me how something edgy can get so rounded off to fit into a corporate model, that it’s no longer viable.
The interdependent organization archetype is a great model for SAAB because it could bring together an array of people and companies from many centers of excellence to work on the coolest automotive technology in the world. There would need to be lots of experimentation (and failure) going on to find out what new ideas work and what theories don’t hold water. You just can’t pull this kind of behavior off, if you are trying to please heads of engineering and design at the top of a corporate pyramid.
Key traits of the new SAAB organization:
1. Ad hoc reciprocal structure- each car should be viewed as a project, with full design-build responsibilities. The designs should connect to the heritage of SAAB (e.g. efficient drag coefficient) but the technology should represent the best of what’s possible in the current market. These teams should work under temporary agreements with other companies to bring resources necessary for manufacturing.
2. Each model is an experiment- transparency while prototyping (instead of secrecy) promotes involvement from others and improves quality. Check out Martin Eberhard’s post on how blogs helped at Tesla Motors. Instead of a long line of reductionist designs, hidden in secrecy while the companies round off the edges to save money, the clean slate approach gives the model team a chance to be truly innovative. An open process pushes everyone to solve the complex tensions between viability, feasibility, and desirability. The prototypes should be rallying all over the world to show off and test the new ideas.
3. Entrepreneurial leaders- leadership in today’s auto market is coming from disruptors like Tesla and Fiskar Automotive. These are entrepreneurial ventures with something to prove and lots of backing to get there. Each model should be considered and investment and live up to a market based promise of innovation. Leadership teams should have to start over again with each model to prove this new idea is worth making (and buying).
Continuing in a series of posts about GM and organization design, let’s take a closer look at creating the right organization for Chevrolet. I know restructuring is not this simple; so take this as the first installment in a high level comparison of organization design options, not a comprehensive plan of action.
Let’s start with Chevrolet, because that’s the easiest to imagine given their current situation.
To me, Chevy is Americana. This is the car that represents the American Dream, value, performance, and accessibility.
Chevrolet should help people get their first car, the family car, and have a competitive truck option. This market means head-to-head competition with Toyota and Honda, so it has to be efficient and cost competitive and produce top quality, reliable, desirable vehicles. Check out this post on The Truth About Cars for a quick review of the Chevy brand.
Key Traits of the new Chevrolet organization:
1. Efficient hierarchical structure. Clean lines of authority to provide clear direction, efficient decision-making, speed to market, and drive focus on customer needs as the basis for every action. This market is not about sexy cars, it’s about helping people feel good while they get places safely and manage household costs.
2. Make each model a business. Get past the silos of design, engineering, marketing, etc. and organize each model around a General Manager, with a P&L outcome and a target consumer to drive functional integration. Fidelity Investments organizes this way (dozens of P&L units), and it works really well. Develop a rabid consumer orientation as a rallying point, rather than being fractured by functional expertise.
3. Restructure the supply chain. As pointed out by Charles Mann in Beyond Detroit, source great parts from the best suppliers by developing a modular platform. Don’t try to own everything, focus on total design, build, and sell.
4. Engage employees. Focus on great leadership and build pride (See Jon Katzenbach). The days of management v. labor must be left behind. This organization needs every single person engaged in a mission to deliver cost competitive, high quality vehicles. Organize production around manufacturing teams provide job rotations to help employees learn, grow, and develop as a natural component of work. Use the portfolio of models to allow employees career movement.
5. Reward performance. Pay individuals, teams, and business units more when they meet performance goals in revenue, quality, and costs. Create healthy internal competition between the businesses.
Next up, how to recover the SATURN brand through an open-source organization.