#CIPDSocial11 Bill Parsons (ARM): social media and why business needs to take notice

 

   The CIPD’s social media conference has kicked off with a session from Bill Parsons, EVP HR at ARM Holdings.  I met Bill at ARM in Cambridge earlier this year, so this post is a combination of his presentation, and my earlier notes.

I’ll start off by saying ARM is one of my favourite companies – and in fact it’s one of the world’s favourite companies too.  ARM’s vision is to be an effective innovative company (not just a wacky one) – a creative productive machine – and it has been consistently judged as one of the most innovative companies in the world.

However the reason I like the company is that it’s one of the very few that I know about which isn’t just using social media, but has focused on becoming a truly social organisation.  Rather than following ‘the Chelsea Model’ of simply having the very best people / access to the best human capital (‘human capital is about a group of smart people who don’t talk to each other’), ARM focuses on the best social capital – ie having the best networks, relationships and trust.  Human, social and intellectual capital (the explicit stuff which they sell) are the company’s differentiation.  Social capital has been at the centre of their HR strategy for the last decade – it’s the rocket fuel of the innovative organisation.

 

 

This starts with the company’s values which focus on things like teaming and selflessness (unusual in such a profitable company) – and are definitely not vanilla.  They were developed and evolved from the organisation’s founders and focus specifically on ARM as a unique organisation (rather than the things which every other organisation does).

Part of the reason that ARM focuses so much on social relationships is that their strategy is about connecting, collaborating and hence innovating and their model for innovation is primarily about open innovation.  They therefore need everyone to behave selflessly – for the greater good of ARM - in external as well as internal networks.  It sounds idealistic but Bill says this really works at ARM (and I think I believe him).

It’s an unusual business model – ARM sees itself as being at the centre of an ecosystem of 500 competing companies collaborating.  ARM itself only employees 2100 people – vs Intel, its main competitor, with 100,000 people.  Their model only works by having a high surface area which it achieves by having its employees talking directly to customers.  The company’s values and culture makes this easy – it’s clear what provides value.

These values are then used as the basis for HR practices eg assessing promotability, fast tracking etc.  In fact the whole HR strategy is about creating the magical ingredients supporting the development of social capital.  Eg rather than the Accenture corporate model in which people are fighting to get to the top, in ARM if anyone is seen to be overtly trying to be promoted, ARM will fire them!  Rewards come to people who do things for the greater good.

So ARM does identify high flyer potential management talent and provides them with coaching and training to help them build their legitimacy.  If you don’t have the buy-in and support of your peers and the people you’re going to manage you’ve got a problem.  ARM ensures that these individuals have good business relationships and networks.

Compensation aligns with ARM’s social strategy as well.  Ensuring justice is an essential part of a social strategy and ARM provide their staff with more equity than any other European company.  This makes employees’ feeling of ownership more meaningful too.  The corporate bonus is largely collective too (just a small proportion is individually driven).

Recognition also focuses on what people do together – they hardly ever celebrate individual success.  Eg the company celebrated its 20 year anniversary last year (its been the highest performing company in the world over this time).  But the celebration was really one of international collective being eg they gave everyone an ipad (they were founded as a child of Apple and Newton Computer).  It was a 27 hour global party revisiting their global successes – not individual stories.

Leadership selection and development is aligned with the values too.  Their CEO is probably the most understated CEO in the FTSE – the one with the highest humility.  He works full time at ARM and keeps a low profile outside.

More generally ARM seek to grow leadership internally – ensuring cultural fit, and fit into the team based environment.  Their feedback and development system also focuses on the company’s values, providing 180 degree insight about what employees think of their bosses.

Social media does have a role in all of this of course, in fact they’ve been using social media for at least ten years.  This includes Skype, Linkedin and Facebook for external use, and blogs and forums internally.  In addition, it uses:

• Internal YouTube – ARM TV
• Yammer has taken off in a big way.
• Video conferencing is the norm (rather than something which would be perceived to be not quite as good.)
• And wikis are the predominant tool for collaboration.

 

 

They also run a Exec Q&A once a year in which their exec answer any question on anything from anyone.  And it’s videod and podcasted so that everyone can see it.

Interestingly a lot of this, eg Yammer and their wikis, were started unofficially and took off from there, rather than being introduced by IT.

However, in Bill’s view, social media can become antisocial media – a barrier to effective communication. So you need to do face-to-face meetings to help people get to know each other. Arguably in advance of social media.

So in ARM, traditional communications plays a part as well eg ARM run twice the number of events (with a corresponding impact on travel budgets) than they need to – these are overtly opportunities to create social networks.  Eg they have a 80 person forum in which they invite people who don’t know each other well to get together (some of which is done unconference style) to work on a range of OD topics eg on the organisation of the future.  This ensures the organisation is constantly questioning its culture.  To get round the biggest organisational barrier of any organisation which is not having the best ideas, they often invite internal customers along, and sometimes external customers too.

It all starts with dinner and drinks in the bar, and then the next morning a discussion on the topics – but what matters is the relationships and new networks that are formed.  The same in their engineering conferences, code tests, transistor tests etc etc.

ARM have tried to measure their social capital through approaches like social network analysis, and they also measure engagement, though what they’re really concerned about is organisational citizenship behaviours – do staff understand that networking is part of their day job, and that they need to help the organisation rather than just doing their own thing.

It’s an impressive case study and it’s paid off too.  ARM’s market value is £4m per employee which Bill argues is down largely to the company’s social capital and use of social media.

 

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Social leadership at Cisco

 

  Ealier on, Phil Smith, CEO, Cisco UK & Ireland has talked about leadership and social networking at Cisco.

Globalisation, technology and the next generation workforce and changing the way that people work in organisations.  It’s a big social change, although technology has made the change much easier.

Cisco use social networking tools for communications within the company also also externally, eg in graduate recruitment for building relationships with the best students and creaming off the best before the milk round.  These relationships are sustained through onboarding etc.

As for those companies that don’t allow social networking, Phil suggests using technology within a company is a management issue – you can be on the phone all day just as much as you can be on Facebook.

Next generation working also requires an inclusive culture.  People feel they want to work in Cisco because their talents will be respected and developed.

Their programme is ‘More Together’ which does focus more on inclusiveness than diversity.  The best teams focus on everyone’s contribution rather than just on minority groups.

So for example his executive team have recently participated in a goldfish bowl exercise, sitting round a group of brave women having a facilitated conversation about some of the difficulties they were experiencing.  Executives do get shielded but in this exercise they just sat and listened.

Executives area also reverse mentored.  He has a 21 / 21 year old chap who mentors him and helps him understand how others would communicate.

All of this helps Cisco to develop social communities and quickly assemble dynamic teams.

 

Also see my other posts on Cisco:

• Enterprise 2.0: Cisco and the Human Network @ Work
• Cisco’s management experiment
• Cisco’s collaboration framework
• Cisco leading from the middle.

 

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Social leadership at GE

 

   (My notes from Susan Peters, CLO, GE at the Economist Group’s Talent Management Summit)

 

GE’s talent management roots can be traced back to the 1950s, however they’ve been reviewing some of this, asking whether the company would be in a different place now if some of this had been different too.

Plus they know leadership requirements will continue to change through to 2020 and beyond. For example, organisations are needing to get much flatter. Susan wonders about middle management – and worries about it too as it’s such a big part of organisational structure. Managers need to turn into coaches but their role may disappear.

 

 

You can always find people who can aggregate, but people can get performance feedback from a wide range of sources eg anonynous twitter based coaching (gen Y are totally cool with this). It requires a different style of management – with more letting go.

GE also expect corporate social networks to be as prevalent in ten years time as the internet is today. And mobile will be to the next 10 years what laptops have been to last 10. All of this is important as social media is not about the technology – it’s about the way people work.

 

(That last one says you will be hired and promoted based on your relationship capital – see my recent post on influence.)

 

It’s all supporting a continuing and massive change in the way we lead…

GE’s review of leadership and talent management started in June 2009 when they got together with an eclectic group of thought leaders (two academics and a millennial, futurist and historian etc) to ask whether their leadership DNA was where they wanted it and what is leadership today?

This led into some research leveraging the Senior Executive Development class talking to 170 entities around the word (including the Boston Celtics, Chinese communist party etc) asking what they are thinking leadership is and what they are doing about it – a bit like drinking from a firehose.

In late 2009 they decided rather than publishing this to engage GE leaders in dialogue about it. So in 2010 they invited academics to dinners on innovation strategy, leadership etc with ten company leader and set up sessions at Crotonville asking what does it mean to you to be a 21^st Century Leader and what do you want your leader to be like? There was a Leaders in Residence programme in which leaders took a week out of their job to teach, including fireside chats, one-to-one coaching etc: where people got the chance to discuss what they saw as the gaps.

 

(Notice Susan’s yammer messages popping up at the top right of this pic.)

 

By the end of 2010, leadership had been reframed by hanging contemporary definitions on the existing values.

 

 

One thing that helped employees to get it was to talk about leadership development in same way as product developing – you wouldn’t want to use the same cell phone as five years ago because your expectations have changed – the same with leadership development. You don’t want to be the same person you were five years ago, and you wouldn’t want to work for someone whose skills and perspectives haven’t changed.

The updated values are used in GE’s differentiation matrix etc and they have a two-pronged approach. Firstly, development happens through on the job experience although it often happens in unplanned way too (eg HR will learn by planning a downsizing or a layoff, but it’s when someone breaks down in tears in your office that you get real experience). Secondly, leaders are given assignments beyond what they should be doing. They’re then held accountable and are given feedback.

GE also bring together intact leadership teams of 15-20 people for four days to teach strategy, learn and do. And a programme called Leadership Explorations is also provided as there are lots of senior executives who have not been in training programmes for some time. This consists of 2 – 3 days studying matrix management, the 2020 workforce, innovation, strategic networking etc.

 

Also see these two previous posts on GE’s leadership, talent management and social networking:

• Social capital and Organisational capabilities
• Talent management, collaboration and competition: GE and IBM

 

 

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John Lewis’ Co-Ownership Model and The Royal Wedding

 

  I’m a republican.  And I’ve avoided the royal wedding today by flying to Atlanta where I’m attending an unconference tomorrow.

On the flight out I’ve been reading this month’s Management Today, which includes an interview with John Lewis Partnership’s Chairman, Charlie Mayfield, and I’ve been struck by the similarities between this company’s co-ownership model, and the reasons why I’m a republican.

 

Co-Ownership

As Mayfield has explained in the Times a few years ago, co-ownership provides a good basis for long-term planning in business:

“Our success in that aftermath and our future economic growth will depend on knowledge-based companies working in new areas of business such as genetics and climate change technology. Such businesses tend to thrive when the people with the knowledge feel they have a stake in their future. Innovation will also be key to their success.

They will not grow into sustainable businesses unless they are built on a structure that encourages a long-term approach to investment and gives the people involved a stake in their success. The modern plc may not be it.”

 

He clearly sees the ownership model as one of the central planks in John Lewis’ success:

“Our constitution is most definitely not a philanthropic idea.  It’s a commercial idea.  A competitive idea.  It’s not political, it’s about engaging people.  We create a culture of ownership and people feel valued.  So they perform better.  That is a very powerful performance lever.”

 

Indeed.  (The article also suggests that:

“If you stack shelves at Waitrose or sell bed linen at Peter Jones, you regard yourself as a cut above the till jockeys at Asda or Debenhams.  You are the creme de la creme, with skin in the game.”)

 

So the suggestion is that co-ownership changes employees (‘partners’)’  perspective about their employment and employer, making them more engaged, with higher performance a result.

I think there’s a bit more too it than this.  I’d suggest the main benefit of this less hierarchical approach is enhanced co-operation - that John Lewis’ people are not just in the game but are playing in the game together.

 

Republicanism

I probably don’t really need to explain the analogy I’m making here.

But let me just emphasise that one key difference between John Lewis and other UK retailers is that Mayfield reports indirectly to his staff (through a 70-strong council of elected partner representatives), rather than simply the other way around.  It’s not too dissimilar to a Presidential political model where the populate appoints the President.

In other more traditional organisations, the boss is much more clearly on top.  He (still less often she) are the corporate equivalents of our dear old queen.  And employees don’t have the same sort of stake in the business that they do at John Lewis and they don’t get the same chance to ask questions, they simply need to do what they are told (as in the anthem: “Long to reign over us”).

So just as John Lewis gets improved performance from its enhanced engagement and co-operation, wouldn’t Britain (the United Republic?) benefit from giving its people (citizens not subjects) more of a stake as well?

 

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Social Business Summit: IBM’s social business / jams

 

  Next up is Stuart McRae, Executive Collaboration Evangelist at IBM talking about IBM’s experience becoming a social business supporting its transformation to a globally integrated organisation.

 

Jamming

Stuart mainly talked about IBM’s Transformation Jam in the UK last year.  This jam was used because IBM wanted to transform the organisation and therefore the company decided to use social technology vs the other way around – which is sort of the right way to do it (agreed! – see my last post).

The jam process was launched in 2001 and you’ve probably heard of their values jam in 2003 but they’ve done a whole series since then, including the recent social business jam I participated in.  The jam leverages the wisdom of crowds in the organisation.

To make successful, lots of things need to happen in the background.  For example, the use other social systems to make people confident to contribute to the jam.  And the use of analytics to drive participation – ensuring different parts of the business are represented, reinforcing key message etc.

The key is what happens next – sometimes it’s easy, sometimes it’s not. Eg in the values jam, IBM millions of inputs were distilled down to three values.  This is particularly the case with open jams – focused on how the business can be made better – leading to lots of  diverse opinions (note you need to try to understand why people are commenting eg you get more negative than positive comments).

It helps to make it very clear what the organisation is trying to achieve!

In the UK Transformation Jam, IBM brought 100 people who were most active in the jam together in a workshop for face-to-face networking.  They then created workstreams to continue the conversation.  It’s important not to let this drop (and IBM got this wrong with the UK jam – the workstreams took up 3-6 months during which other participants didn’t hear anything).

(Ermm, yes, I was talking to a contact just last week about the fact we’re still waiting for follow-up on the Social Business Jam and how this is less than ideal.)

 

Social

One of things that came out the Transformation Jam was need for better productivity – through better collaboration tools (so this experience was about using a collaboration tool to identify the need to use more collaboration tools!).  The need was to transform the way that the average IBM employee works.

IBM’s philosophy about social media in IBM is to keep it open [relating to JP’s comments about the way organisations try to develop something in a closed way in one part of the organisation while another part of the organisation tries to engage people around it – much better just to develop the thing in a social way in the first place!].

They’re also changing the paradigm from an email model to a social media model.  And are working to make the organisational silos permeable (but note your ultimate silo is the firewall).

 

IBM measure the results of all this through usage of the technology but also mining information about what people are using it for.  And IBM’s stock price!

Becoming a social business is about understanding what business problems you’re trying to solve (eg increase the stock price, or back to my last post, taking too long to repair the buses).

 

Your employees are your differentiator – social businesses use them better – by being transparent, ensuring employees are engaged – and thus becoming more nimble.

Loyalty with a company today is about a sense of affinity with the employees you are interacting with.

 

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Enterprise 2.0: IDEO and Innovation

 

   Andrew McAfee’s been talking about enterprise 2.0 and innovation, and the need to move from the centre towards the outer rings of his E2.0 target model to stimulate innovation.

He’s just introduced Gentry Underwood, Head of Knowledge Sharing at IDEO who is talking about design thinking which mixes business, human and technology factors effectively to just about any problem we can imagine –including how technology can be used to make organisations more innovative.

“As organizations look to stay competitive in an increasingly volatile marketplace, technology can play a part in becoming more innovative and collaborative. But where and when should these tools be used, and how do you get real value out of them? Gentry Underwood, head of Knowledge Sharing at IDEO, will share examples, strategies, and lessons learned from the employment of technology to facilitate broad-scale innovation.”

 

There are three key principles:

• Focus on people not the ideas themselves.  There’s value in process but at the heart of innovation is something messy that can’t be managed.  At the end of a process at IDEO they’ll have lots of ideas they’ll just throw away.  To an extent, ideas are cheap.  Empower people, not ideas.
• How do we enable more people to work together with each other?  Create platforms for coalescence.  Innovation happens when collaborative people come together with a shared vision.  IDEO have physical spaces for people to innovate and can do this online as well (eg My Starbucks Ideas, Netflix Prize etc).  IDEO have well used blogging, networking systems and a wiki (IDEO Spaces).
• Facilitate and reward participation.  Friction in the system stops people using it and the less people on it the less valuable it is.  The last system has been successful because they didn’t need to do anything special – have a password, attend training etc to use it).  Two key things have been a RSS type feed system.  And screen savers in their locations which cycle through the 20 latest status updates and has encouraged people to maintain their profiles.  This has led to a 97% take-up of their People Pages.

 

 

View today’s keynotes from#e2conf at tv.e2conf.com/ and see my reviews at bit.ly/e20conf

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Enterprise 2.0: CSC and Social Collaboration

 

   Next up Lemuel Lasher, President, Global Business Solutions Group & Chief Innovation Officer at CSC talking about setting up their Innovation unit:

“CSC has had remarkable success with social business software through a strategic, award-winning initiative called C3 to connect people to people, connect people to content, and connect people to communities. This global social collaboration platform enjoyed early success during its pilot phase collapsing time zones, distance and organizational barriers, reducing business development time and driving revenue and innovation.”

 

One of the difficulties getting this unit started was agreeing what innovation is.  For CSC it had to be a balance between creativity and discipline, leveraging the company’s intellectual capital.  It’s not just about great ideas, it’s about the business problems we all have.

In CSC, these different elements were coming together like brownian motion, with no direction.  So Lasher focused on leadership, governance, process and enablement – and finally, the tools to support all of this.  And all of this needed to be looked at from a systems perspective (Senge).  Innovation needs to be socialised, externalised, internalised and combined (Nonaka and Takeuchi).

Doing this required the next vs the best practices.  One of the key strategies was to get off Lotus Notes.  So CSC implemented Jive last year, renamed it C3: Connect, Communicate, Collaborate, led by Claire Flanagan, who has just ben promoted live on stage.

This has become the defacto standard for the way they commnicate – they now have 48,000 people on the system one year after implementation.

 

View today’s keynotes from#e2conf at tv.e2conf.com/ and see my reviews at bit.ly/e20conf (including a presentation from Claire Flanagan!).

Technorati Tags: R. Lemuel Lasher,CSC,Enterprise 2.0,Social,Collaboration,Innovation

 

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Enterprise 2.0 conference: EMC’s business case

 

   I’m at the Enterprise 2.0 black belt workshop at the Enterprise 2.0 conference today.

We started with a session from Jamie Pappas, E2.0 and social media strategist at EMC who took us through a process to develop a business case and get E2.0 sold in an organisation.

Jamie’s advice included:

* Define the goals – remember different groups care about different things (marketing, IT etc). Think about how these tie back to business processes and people – this will provide an answer to the dreaded ROI question as well (yes!, one of the points I’ve made frequently on this and my other blog is that measurement isn’t hard – once you’re clear about your objectives).

* Sponsorship helps (although this doesn’t need to be from an Executive). EMC’s sponsor was Chuck Hollis, VP, CTO of Global Marketing and a well known who helped explain E2.0 to the company’s executives. They didn’t go to their CEO until they had use cases of things that would appeal to him, ie:

• Positive financial results
• Happy employees
• Getting work done as effectively and as efficiently as possible.

 

* Choose the tool – 80% of the ideal may be enough. EMC chose Jive because it’s

• Easy to use
• Ready to go out of the box
• Not a huge learning – important in their culture.

 

* Don’t underestimate the importance of education.  Not everyone is as interested in exploring these tools as the people in this room.  At EMC, people were upset while using wiki when people started editing their inputs!  Some suggestions:

• Online and in person
• Lunch n learn sessions, podcasts
• Written and video tutorials
• Train the trainer.

 

EMC also include in their existing training programmes eg EMCU new hire and sales training programmes etc.  They include how to do it, but also EMC’s philosophy etc (why to do it).

 

* Anticipate objections.  EMC still gets objections 3 years later (it’s not for business / won’t work / we don’ t have time / you don’t expect pay employees to socialise! etc)

 

* Think about how to launch.  EMC went for the soft, WOM, viral approach – a pilot with a couple of hundred people.  Jamie says she told people not to tell everyone about E2.0 so of course they did – and as a result they had a few thousand users within just a couple of months.

3 years later, 65% of the company are visiting the site.

 

* Seed with great content.  People will make decisions within 3-5 seconds about whether it is worth going back to a community.  If there’s nothing going on then they won’t return.  Ensure there’s something interesting there from the outset.

 

The technology infrastructure is less important – EMC’s community takes up just 60GB - less than the average laptop.

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Slides available at http://www.slideshare.net/20adoption 

Follow my posts from the conference at bit.ly/e20conf.

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Zappos - Delivering happiness

 

   I’ve been reading Tony Hsieh’s book, Delivering Happiness (like all of my book reviews, based upon a free advanced copy of the book).

 

Who?

For those who don’t know (and there’s still a high proportion of HR people in Europe and elsewhere who don’t), Hsieh is CEO of Las Vegas based online shoe retailer, Zappos, now owned by Amazon.

 

Zappos - HCM

Zappos’ mojo / organisational capability is a slightly weird, family and customer service focused culture which is supported by a desire to increase happiness in employees, customers and others who come into contact with the company (for more of a feel on Zappos’ unique culture, watch this video on Zappos’ WOW! culture).

Zappos tailors its HR processes to develop the human capital it requires to support this capability. For example, in order to ensure employees can relate to customers in a very human way, the company asks prospective recruits to describe how weird they are (Zappos is looking for high but not extreme levels of weirdness in its candidates’ responses). The company considers the need for employees to be aligned with its organisational capability to be so important that it even offers newly inducted employees $2,000 USD to leave the company if these people no longer believe that they will fit in the organisation.

And Zappos HR team is given accountability for ensuring alignment between organisational capability, people management processes and the people the company employs. So for example, recruiters are able to veto a candidate if they don’t think the individual would fit in Zappos’ culture, regardless of the hiring manager’s opinions of the person’s ability to do a particular job.

This is a video of Tony Hsieh describing Zappos culture that I recorded at the Human Capital Institute (HCI)’s summit in Phoenix, Arizona, last year.

 

Zappos – Social Advantage

Zappos also provides a good, if slightly less compelling, case study on the other areas I write about – social capital.

Hsieh notes that connectedness – the number and depth of your relationships - is one of four things (along with perceived control, perceived progress and vision / meaning) which leads to individual and business happiness.  He refers to Gallup’s findings that engagement is correlated with the number of good friends an employee has at work (even if social relationships aren’t considered important in all engagement surveys) and to conclusions in the Happiness Hypothesis that happiness doesn’t come from within, but from between.

So Zappos focuses on creating a positive team and family spirit:

“We are more that a team though – we are a family.  We watch out for each other, care for each other, and go above and beyond for each other because we believe in each other and we trust each other.  We work together but we also play together.  Our bonds go far beyond the typical ‘co-worker’ relationships found at most other companies.”

 

I like this idea for example:

“In most companies, logging in to the computer systems requires a login and password.  At Zappos, an additional step is required: a photo of a randomly selected employee is displayed, and the user is given a multiple-choice test to name that employee.  Afterward, the profile and bio of that employee are shown, so that everyone can learn more about each other.  Although there is no penalty for giving the wrong answer, we do keep a record of everyone’s score.  Internally, we refer to this as ‘The face Game’.”

 

This is Hsieh talking about the value of social relationships:

 

Zappos – social media

Zappos also makes heavy use of social media tools like blogs and Twitter in order to help build more personal connections with employees and customers (you can follow Tony Hsieh’s own tweets and I also like his article on Twitter and happiness).

Here is Hsieh talking about this.

 

It’s also interesting that this book is being supported by what’s probably the biggest ever blogger outreach programme for a new book (at least the biggest one I’ve been involved in).

 

The book

Zappos is clearly a great organisation – firstly, because of its mojo / values which describes a sort of place that many people would like to work in, and secondly, because of how well it has created a culture / organisational capability aligned to this mojo / its organisational values.

As Hsieh notes:

“It doesn’t actually matter what your company’s core values are.  What matters is that you have them and that you commit to them.  What’s important is the alignment that you get from them when they become the default way of thinking for the entire organization.”

 

So I’ve been looking forward to reading this book.

It serves, I think, as a good overview of Zappos’ culture and development, particularly for those who haven’t come across it previously.  The other main thing I liked about it is that it is a very compelling and readable autobiography – not normally a format that appeals to me.  And I think Tony Hsieh’s entrepreneurial mindset comes over very clearly.

Where, personally, I’d have liked to have seen a bit more focus is on the theme of this book, and Zappos brand promise – delivering happiness. 

 

Delivering happiness

 

Tony Hsieh is clearly a very happy guy, and not just for the obvious reasons.  And the company he has created is one which enables people to be happy at work.  But I wouldn’t buy this book if your own objective is to maximise your own or your organisation’s happiness – I think there are other books that provide better advice on this (and it’s a subject I’d love to return to and post on again myself).

I’m also not convinced everybody’s end goal is happiness as Tony Hsieh suggests.  So, for example, I think his highest level of happiness, having a higher purpose meaning, can be a goal in its own right, not just one that will deliver happiness.  In fact, I’d suggest that that higher purpose is likely to be served best by focusing on this for itself, rather than as a source of happiness – and that doing this may actually result in more happiness too.

I was hoping to read more on Hsieh’s views on this area but perhaps good ideas will now emerge from the movement he’s set up.

 

A happiness survey

It’s very difficult to identify areas where Zappos could improve the way it manages its people to deliver happiness.  However, I’ll have a tryie:

Hsih mentions that Zappos run a regular employee survey including statements such as:

• I believe that the company has a higher purpose beyond just profits
• My role at Zappos has a real purpose – it is more than just a job
• I fell that I am in control of my career path and that I am progressing in my personal and professional development at Zappos
• I consider my co-workers to be like my family and friends
• I am very happy in my job.

 

These are all great questions, and again, very well aligned to Zappos’ mojo.  But, with the possible exception of the last one, they’re all focused on enablers – on satisfaction with other things rather than with outcomes like engagement of the individual employee.

Actually, the important outcome of course is happiness (another potentially important element of human capital other than engagement).  And I’m not sure that Zappos tests this very well as the last question in the list above may result in responses relating more to an employee’s job than their real level of happiness in work, and in life as well.

So I think Zappos need to ask something like ‘I’m happier at this point in my life than I’ve ever been in the past’.  It’d be interesting to see how well these enablers about happiness correlate to an outcome question or questions like this.

It might even help Hsieh write more extensively about happiness in his next book.

 

PS Zappos have sent me two Delivering Happiness books, so if anyone wants my second copy and would like to arrange to pick it up from me in London sometime this week, let me know.

 

Cross posted from Strategic HCM

Technorati Tags: Tony Hsieh,Zappos,Delivering,Happiness,book,dhbook

 

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More social media stories (from M&S, Shell, Unilever)

 

   The second event this week was JustMeans’ Social Media & Stakeholder Engagement conference.  This featured a number of speakers / case studies (including Marks & Spencer – which I referred to in my Personnel Today report – presented by Robert Nuttall, formerly Head of Internal Communication there).

In one of these sessions, Bjorn Edlund, formerly Executive VP of Communication for Shell presented on a number of issues, including the need for all employees to be able to represent the company externally (which relates to the points made by AXA and Santander at the other conference earlier this week):

“What’s the difference between a company spokesperson and someone who just happens to work at Shell?  We have to let people communicate, let go of control.  We can’t participate in the conversation if the legal department need to check everything, for legalese and marketing spin.  People understand the different between being in the conversation and using information that’s not in the public domain as yet.  We need to adapt our disclosure rules.  People can make mistakes, things happen – but things have always happened.”

 

Also see:

• Live from Social Media & Stakeholder Engagement: moving away from phony

 

I then moderated a session on Employee Engagement which included a presentation from Tim Johns, VP Corporate Communication at Unilever.  Johns’ presentation reinforced many of the points made by Edlund:

• There are very low levels of involvement in traditional employee communication channels
• People don’t trust these – they trust PLUs (People Like Us)
• The future is about web space rather than web sites – Unilever’s collaboration zones
• Employees can blog, vote and see the results
• The company has moved from portals to a sharepoint platform people can use to find other people they’re interested in.

 

As a result of this shift, Unilever’s employee engagement scores have shot up.  The approach works because it’s what’s normal in external society, and because it’s right:

“Flattening hierachy & empoyering employees is where next battle lines in companies will be drawn.”

 

I was asked questions over Twitter on:

Engagement within Unilever’s multi-brand environment

Johns explained that companies think they can control messages and control the organisation – but Unilever is a massive organisation, and you can’t control it:

“It’s about a change in society, and there’s no difference between the internal and the external – so you can’t run internal and external differently.  You can’t engage employees in one place and not elsewhere – it doesn’t work like that.  You’re stronger when you cede control that when you try to keep it.”

 

Workplace agility

Is key – you could spend every day on planning.

 

Senior leadership nervousness about social media

Johns suggested that you shouldn’t ask permission or it will never happen.

 

Encouraging take-up outside just IT

Johns stressed the need to avoid the dead hand of HR and IT

 

Also see:

• Sizzle your sustainability by engaging with your employees

 

 

Please note, I hope the reporting of Johns’ presentation is reasonably accurate, but I was listening to Johns, keeping an eye on the audience and reading the tweets at the same time as scribbling down my notes, so please forgive any inaccuracies.

 

Technorati Tags: Justmeans,social media,stakeholder,employee,engagement,Bjorn Edlund,Shell,Robert Nuttall,Marks,Spencer,Tim Johns,Unilever

 

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Social media stories (from Virgin Media, Santander, Axa, Asda and Pfizer)

 

   I’ve attended two social media conferences this week – the first was Enterprise Social Media on Monday, and featured case studies from Virgin Media, Santander, Axa, Asda and Pfizer as well as ING (which unfortunately I missed).

My report on these case studies is up at Personnel Today.

 

Technorati Tags: Social media,enterprise,Helen Farrar,Virgin Media,Anthony Frost,Santander,Sonia Carter,AXA,Sarah Cullen,Asda,Simon Revell,Pfizer,SharePoint

 

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Lynda Gratton on Nokia and the future of work

 

    I’ve already posted at Strategic HCM on Lynda Gratton’s Future of Work blog and her recent article at HR Magazine.  But she’s also got a good article up on London Business School’s site, reviewing Nokia’s Booster Programme.

 

One of the things I’ve posted on quite frequently at this blog, is the need to combing real and virtual (or as Nokia say, analogue and digital) activities in order to best achieve certain outcomes.

In Gratton’s article, she explains how Nokia’s ‘Booster Programme’ used a blended approach including both sets of activities to engage with people throughout the world and to do so in fast and compelling ways:

 

Need: fundamental organisational change covering 5000 employees.

Analogue activities: a two-day face-to-face workshop with team leaders

Digital activities: online social network communities providing much broader involvement of the whole organisation.

“The two-day workshops were staged in locations across the world, including Beijing, White Plains (New York), Helsinki, London and Dubai. About 100 potential change leaders were part of each workshop.

When all workshops were completed, the 700 participants then returned to their teams to engage them in the ongoing process. It was at this point that the online community came to the fore. Working with specialist partners, the design team created an intranet site accessible to workshop participants and all employees of the Markets business. The online community was designed to host conversations and communications with senior managers as well as to provide information and ideas from content experts and community members.”

 

Result: daunting organisational change made fully effective within one week!

Gratton notes that:

“The capacity of social networks to create engagement and innovation is seen to be crucial to the long-term success of Nokia.”

 

But importantly, social networks didn’t achieve this on their own!  It was down to both real and virtual communication, and importantly, to Nokia’s collaborative organisation structure and culture:

“Only about 100 people assuming new jobs. For the rest of Nokia’s employees, there was no need to change jobs; the modular teams of which they were members were simply reconfigured. The discipline, philosophy and mindset of reconfiguration through standardisation and shared platforms ensured that Nokia is able to skilfully and rapidly reconfigure its human resources to meet changing customer needs.”

 

So that’s change management sorted then!

 

Photo credit: boostedfc3s

Technorati Tags: Lynda Gratton,Joel Casse,Nokia,social networking,communities,change management,Booster,programme

 

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Social capital and Organisational capabilities

 

On Tuesday I had the opportunity to talk with Thomas Stewart, author of ‘Intellectual Capital’ and ‘The Wealth of Knowledge’, about a presentation on ‘Capabilities’ – sources of essential – as opposed to transient – advantage that shape the right to win.

I explained my current interest in social capital and asked Stewart which organisations he thought had strong capabilities that resulted mainly from the relationships between their people, ie capabilities built on social capital, rather than the people themselves, ie human capital, or processes, technologies etc.

Stewart' suggested GE as probably the best example of this (and one that he knows well), and we also talked about his current firm, Booz & Company:

 

GE

GE’s capability is leveraging its huge workforce.  And you can’t do this unless people know each other.

So GE creates communities to help mitigate the fact that it’s generally a fairly aggressive sort of place.  So if you’re a management person, you’ll be a member of several different groups.  For example, as an HR person you might be in the European HR community, the worldwide HR Reward community, and the HR community for the lighting business.  These communities help people understand who they need to leverage to get things done. 

GE also moves people around a lot, and actively manages this process.

The result of both of these activities is that you’ll know lots of people across the company.

It’s a bit like a honeycomb – people get to know each other.

 

Booz

Booz’ capability is providing complex solutions to diverse problems, and a strong client service ethic.  People work hard but have fun because people look after each other.  “We understand business logic very well.  We provide strategic foresight and combine this with deep functional expertise.  We have the size we need to be able to do – a big critical mass – we can scale around opportunities.”

To do this effectively, Booz needs to be able to get teams forming quickly and working seamlessly, getting people on the same page very fast.

Booz pioneered knowledge management but it fell into disrepair and they got into bad technologies - their knowledge system was email sharing stuff on peoples’ hard drives.  They’re now getting into 2.0 technologies.

The firm’s new head of knowledge is called Director of Knowledge Sharing and Collaboration.  And they’ve got a new site, including wikis and micro-blogging.  These are used instinctively and naturally in their younger group who use them to build links and enjoy their activities, and it improves the ability of their projects teams.  Some of the older Partners find it more difficult though.

I asked about whether this approach focuses on sharing explicit knowledge, or whether the intent is to exchange tacit knowledge as well (as I wasn’t too sure whether Booz’ approach to sharing knowledge and collaboration was about social capital or just organisational capital – ie just the explicit stuff).

So Stewart described how Booz are encouraging people to make their profiles deeper and richer, describing their other interests for example.  They’re building ‘fuzzy information’ into their formal systems (given that they run what’s basically an apprenticeship system, it’s already all over the informal systems).

And they need to build it into the culture harder.  For example, there’s still very much a core group or inner sanctum which makes decisions for the company, and they need more transparency around this core group.

In addition, the firm recognises that people can’t deliver if reward systems aren't set up to support delivery across practices and geographies.  So you have to remove barriers and incentivise usage.

 

Technorati Tags: Organisational,intellectual,capabilities,social capital,knowledge,Thomas Stewart,GE,Booz,HR Directors Business summit

 

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Cisco’s management experiment

 

          A number of other blogs have posted on Cisco’s unusual management structure recently, see for example:

• Henry Blodget, Business Insider: Has Cisco’s John Chambers lost his mind?
• Brad Reese, Network World: Management vision of Cisco CEO John Chambers under fire
• Ben Worthen, Digits (Wall Street Journal blogs): Cisco CEO John Chambers’s big management experiment.

 

As you’ll see if you read these posts (and can probably tell from their titles), these posts; readers’ comments on these posts; and also employee feedback (eg on Glassdoor.com) are quite disparaging.

I’ve also posted previously on Cisco’s network organisation structure design, and on their new Collaboration Framework.  Both of my posts are broadly favourable (although they don’t deal specifically with this top level structure), so what’s going on?

 

Cisco’s management structure 

During the last eight years, Cisco has been replacing its top-down divisional structure with committees of executives from across the company.  More than 750 company leaders are currently involved in 59 committees (12 councils for $10m+ business opportunities, 47 boards for $1m+ opportunities, and below this, a number of working groups) - see Cisco’s top level organisation chart at the top of this post, and also take a look at a previous post of mine that also refers to some of this.  Cisco’s current goal is to broaden participation on these committees to 2500 or more employees.

The motivation behind these changes has been to move from a command-and-control operation dominated by competing departments to a widely cross-functional, collaborative company which uses the various standing committees to facilitate executive decision-making, create cross functional alignment, and guide business initiatives.  Cisco now makes 70% of its decisions in these committees (up from 10% just two years ago).

In addition, the new structure has enabled Cisco to increase the number of markets the company is targeting from two in 2007 to 26 today (each of which could soon reach sales of $1 billion, accounting for more than 25% of Cisco’s revenue) and this number could increase to 50 next year.

Cisco’s CEO, John Chambers has said that part of his goal in making the changes has been to make spread his executives thinly, making them rethink how they work and what they work on.

Eventually they "realize they can’t keep their head above water and if they want to swim they have to give [some responsibilities] to their teams".  The new management structure "makes everyone uncomfortable, including the CEO," he says.

 

The criticism

While most commentators understand that Cisco needs to change, becoming more innovative in order to grow organically, rather than relying on acquisition as it has in the past, its recent changes have drawn substantial criticism.

The new structure is reported to add bureaucracy, remove accountability and slow down decision making.  It’s also blamed for the company’s falling market share in certain key product categories.

 

My perspectives

Cisco’s structure is certainly different, and it must have been a brave, or foolhardy, decision to require top executives to spend 30% of their time serving on 10 or more committees.

I’ve worked myself in one public sector organisation in which I and other executives were required to spend significant time working in committees and this certainly generated a lot of waste there.  So it’s easy to see how this committee based structure could result in a massive bureaucracy that simply produces slower and lower quality decisions.

But Chambers clearly believes that business needs to change – see these comments in a recent New York Times interview:

“I’m a command-and-control person. I like being able to say turn right, and we truly have 67,000 people turn right. But that’s the style of the past. Today’s world requires a different leadership style — more collaboration and teamwork”

“Big time, the importance of collaboration. Big time, people who have teamwork skills, and their use of technology. If they’re not collaborative, if they aren’t naturally inclined toward collaboration and teamwork, if they are uncomfortable with using technology to make that happen both within Cisco and in their own life, they’re probably not going to fit in here.”

 

If Chambers is right that collaboration is the ‘next big thing’ then it might have been a bigger risk to keep things as they were than to change.

To a certain extent, I think criticism of the changes bear similarities to push back against organisations allowing people to use social media technologies during work times (the ban Facebook debate).

Both this structure, and individual use of social media, may lower individual productivity.  But that’s no longer the point.  They key now is productivity of the group, delivering organisational speed and innovation.

Cisco doesn’t want to replicate the experience of Sony being take over by Apple for design of the ipod (Chambers had a similar experience to this at Wang where the company got left behind by the rise of the PC) and it obviously needs to organise itself differently if it’s going to produce different results.

And the scale of the transformation will certainly make it very clear to executives how their behaviour is expected to change – avoiding one mistake made by a lot of organisations undergoing change.  But given this, a lot of employee feedback bound to be negative.  I think Chambers is right too see the fact that over 20% of his leaders have left the company as a positive.

 

The Difference

I think the key to Cisco’s success (and I predict they will continue to be successful) is the way that they have made these changes.  Yes, the top level structure could have degenerated into a paralysing bureaucracy, but I don’t think it has, and I don’t think it will.

See my earlier post on Cisco’s Collaborative Framework for a review of the approach it’s taken to support these changes, and which I think have been critical to ensure that they have been implemented well.

And probably even more important, has been Cisco’s single minded focus on collaboration.  This hasn’t been something it’s tried to introduce lightly, or quickly, or half heartedly.  So it’s been able to produce, what in my terms I call organisational capability – a capability for collaboration.

I don’t know if collaboration will be ‘the next big thing’ – although I believe it will.  But I also believe organisations have access to a wide variety of other different options for competing.  They key is to choose one and do it properly, not worrying too much about the way that business has traditionally been done.

So I guess John Chambers won’t be too worried by the recent criticism!
 

 

Also see: McKinsey’s conversation with John Chambers

And this interview on CNBC:

 

Technorati Tags: John Chambers,Cisco,Henry Blodget,Business Insider,Brad Reese,Network World,Ben Worthen,Digits,management,vision,experiment,rerouting,operating committee,councils,boards,working groups

Rerouting Cisco graphic: Ben Worthen, Digits (Wall Street Journal blogs): Seeking growth, Cisco reroutes decisions

 

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Whole Foods: Conscious Capitalism

 

      I’ve been watching some of the videos from the Conscious Capitalism conference earlier this year (brought to my attention by Ray Sisodia from Bentley University on the Moon Shots community site).

The conference was opened Sisodia talking about ‘firms of endearment’ and the need for a ‘declaration of interdependence’ – a recognition that we are all interconnected and co-dependent.

Sisodia presented a number of statistics about trust with business, which provided a context for the later proceedings:

• New York Times: “The majority of the public… believes that executives are bent on destroying the environment, cooking the books and lining their own pockets.”
• Roper: “Only 2% of investors believe that CEOs are ‘very trustworthy’: 72% believe that wrongdoing is commonplace at companies.”
• Harris Poll: “90% of Americans believe that big companies have too much influence on government.”
• “80% believe business is too concerned about profits and not enough about responsibilities to workers, consumers and the environment.”

 

I thought the most interesting presentation during the conference came from John Mackey, CEO at Whole Foods.

Mackey continued Sisodia’s train of thought, noting that business is widely seen as greedy, untrustworthy and widely unethical, and putting the blame for this on poor business ideology.  This has led to the current push back against capitalism and means that now “corporations and CEOs are in the toilet”.

In Mackey’s view, the narrative we use to describe businesses needs to change – and ‘conscious capitalism’ provides an appropriate alternative.  This is about:

• Enterprises having a deeper purpose behind maximising profit and shareholder value
• Enterprises being managed to optimise value for all major interdependent stakeholders
• Servant leadership to the enterprise and its stakeholders.

 

This approach means that profits should not be pursued – they ensue from working towards a higher purpose.  In Mackey’s view, maximising profits is a curious purpose for a business – and one that typically hasn’t come from the entrepreneurs who created new businesses – but from economists.  Entrepreneurs usually define an initial meaning for their businesses, and organisations need to hold on to this (accepting that meaning will evolve over time).

Great companies have great purposes which tap into the highest ideals that humans aspire to:

• Service to others: expressing love and care (the good)
• Discovery and the pursuit of truth (the true)
• Excellence and the quest for perfection (the beautiful)
• Changing and improving the world (the heroic).

 

Mackey notes he is not anti-profit.  Profits are essential for doing business.  But we need to recognise that profits are created through voluntary exchange, not from the exploitation of people.  The paradox of profits (similar to happiness) is that they are best achieved as a by-product of something else.

The problem is that not many bosses act in this way – there are few servant leaders.  Take executive reward.

• In 1980, the average US CEO received $40 for every $ earned by the average worker
• In 1990, it was $100
• By 2006, this had increased to $364 for every $ earned by the average worker.

 

At Whole Foods Markets, the highest pay is limited to $19 for every $1 the average full-time team member earns.

Also stock options – typically the top five executives will received 75% of stock options.  In Whole Foods Markets, the top executive only received 7%.

In Whole Foods, executive reward reflects the expectations of different stakeholders – in other firms, it “reflects a certain amount of greed”. 

 

An inspiring presentation – and a great conference.  See more of these presentations at http://www.bentley.edu/conscious-capitalism/index.cfm.

And for more insights on new ways of managing, join the Moon Shots community site at http://moon-shots.ning.com.

 

Technorati Tags: John Mackey,Whole Foods,Conscious Capitalism

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