Shipulski On Design

Archive for the ‘Fear’ Category

In strategic planning there’s a strong forcing function that causes the organization to converge on a singular, company-wide approach.  While this convergence can be helpful, when it’s force is absolute it stifles new ideas.  The result is an operating plan that incrementally improves on last year’s work at the expense of work that creates new businesses, sells to new customers and guards against the dark forces of disruptive competition.  In times of change convergence must be tempered to yield a bit of diversity in the approach.  But for diversity to make it into the strategic plan, dissent must be an integral (and accepted) part of the planning process.  And to inject meaningful diversity the dissenting voice must be as load as the voice of convergence.

It’s relatively easy for an organization to come to consensus on an idea that has little uncertainty and marginal upside.  But there can be no consensus, but on an idea with a high degree of uncertainty even if the upside is monumental.  If there’s a choice between minimizing uncertainty and creating something altogether new, the strategic process is fundamentally flawed because the planning group will always minimize uncertainty.  Organizationally we are set up to deliver certainty, to make our metrics and meet our timelines.  We have an organizational aversion to uncertainty, and, therefore, our organizational genetics demand we say no to ideas that create new business models, new markets and new customers.  What’s missing is the organizational forcing function to counterbalance our aversion to uncertainty with a healthy grasping of it.  If the company is to survive over the next 20 years, uncertainty must be injected into our organizational DNA. Organizationally, companies must be restructured to eliminate the choice between work that improves existing products/services and work that creates altogether new markets, customers, products and services.

When Congress or the President wants to push their agenda in a way that is not in the best long term interest of the country, no one within the party wants to be the dissenting voice. Even if the dissenting voice is right and Congress and the President are wrong, the political (career) implications of dissent within the party are too severe.  And, organizationally, that’s why there’s a third branch of government that’s separate from the other two.  More specifically, that’s why Justices of the Supreme Court are appointed for life.  With lifetime appointments their dissenting voice can stand toe-to-toe with the voice of presidential and congressional convergence.  Somehow, for long-term survival, companies must find a way to emulate that separation of power and protect the work with high uncertainty just as the Justices protect the law.

The best way I know to protect work with high uncertainty is to create separate organizations with separate strategic plans, operating plans and budgets.  In that way, it’s never a decision between incremental improvement and discontinuous improvement.  The decision becomes two separate decisions for two separate teams: Of the candidate projects for incremental improvement, which will be part of team A’s plan? And, of the candidate projects for discontinuous improvement, which will become part of team B’s plan?

But this doesn’t solve the whole challenge because at the highest organizational level, the level that sits above Team A and B, the organizational mechanism for dissent is missing. At this highest level there must be healthy dissent by the board of directors.  Meaningful dissent requires deep understanding of the company’s market position, competitive landscape, organizational capability and capacity, the leading technology within the industry (the level, completeness and maturity), the leading technologies in adjacent industries and technologies that transcend industries (i.e., digital).  But the trouble is board members cannot spend the time needed to create deep understanding required to formulate meaningful dissent.  Yes, organizationally the board of directors can dissent without reprisal, but they don’t know the business well enough to dissent in the most meaningful way.

In medieval times the jester was an important player in the organization.  He entertained the court but he also played the role of the dissenter.  Organizationally, because the king and queen expected the jester to demonstrate his sharp wit, he could poke fun at them when their ideas didn’t hang together.  He could facilitate dissent with a humorous play on a deadly serious topic.  It was delicate work, as one step too far and the jester was no more.  To strike the right balance the jester developed deep knowledge of the king, queen and major players in the court.  And he had to know how to recognize when it was time to dissent and when it was time to keep his mouth shut.  The jester had the confidence of the court, knew the history and could see invisible political forces at play.  The jester had the organizational responsibility to dissent and the deep knowledge to do it in a meaningful way.

Companies don’t need a jester, but they do need a T-shaped person with broad experience, deep knowledge and the organizational status to dissent without reprisal.  Maybe this is a full time board member or a hired gun that works for the board (or CEO?), but either way they are incentivized to dissent in a meaningful way.

I don’t know what to call this new role, but I do know it’s an important one.

Image credit – Will Montague

Once you have a project to work on, it’s always a challenge to choose the first task.  And once finished with the first task, the next hardest thing is to figure out the next next task.

Two words to live by: Critical Path.

By definition, the next task to work on is the next task on the critical path.  How do you tell if the task is on the critical path?  When you are late by one day on a critical path task, the project, as a whole, will finish a day late.  If you are late by one day and the project won’t be delayed, the task is not on the critical path and you shouldn’t work on it.

Rule 1: If you can’t work the critical path, don’t work on anything.

Working on a non-critical path task is worse than working on nothing.  Working on a non-critical path task is like waiting with perspiration.  It’s worse than activity without progress.  Resources are consumed on unnecessary tasks and the resulting work creates extra constraints on future work, all in the name of leveraging the work you shouldn’t have done in the first place.

How to spot the critical path? If a similar project has been done before, ask the project manager what the critical path was for that project.  Then listen, because that’s the critical path.  If your project is similar to a previous project except with some incremental newness, the newness is on the critical path.

Rule 2: Newness, by definition, is on the critical path.

But as the level of newness increases, it’s more difficult for project managers to tell the critical path from work that should wait.  If you’re the right project manager, even for projects with significant newness, you are able to feel the critical path in your chest.  When you’re the right project manager, you can walk through the cubicles and your body is drawn to the critical path like a divining rod.   When you’re the right project manager and someone in another building is late on their critical path task, you somehow unknowingly end up getting a haircut at the same time and offering them the resources they need to get back on track.  When you’re the right project manager, the universe notifies you when the critical path has gone critical.

Rule 3: The only way to be the right project manager is to run a lot of projects and read a lot.  (I prefer historical fiction and biographies.)

Not all newness is created equal.  If the project won’t launch unless the newness is wrestled to the ground, that’s level 5 newness. Stop everything, clear the decks, and get after it until it succumbs to your diligence.  If the product won’t sell without the newness, that’s level 5 and you should behave accordingly.  If the newness causes the product to cost a bit more than expected, but the project will still sell like nobody’s business, that’s level 2.  Launch it and cost reduce it later.  If no one will notice if the newness doesn’t make it into the product, that’s level 0 newness. (Actually, it’s not newness at all, it’s unneeded complexity.)  Don’t put in the product and don’t bother telling anyone.

Rule 4: The newness you’re afraid of isn’t the newness you should be afraid of.

A good project plan starts with a good understanding of the newness.  Then, the right project work is defined to make sure the newness gets the attention it deserves.  The problem isn’t the newness you know, the problem is the unknown consequence of newness as it ripples through the commercialization engine. New product functionality gets engineering attention until it’s run to ground.  But what if the newness ripples into new materials that can’t be made or new assembly methods that don’t exist?  What if the new materials are banned substances?  What if your multi-million dollar test stations don’t have the capability to accommodate the new functionality?  What if the value proposition is new and your sales team doesn’t know how to sell it?  What if the newness requires a new distribution channel you don’t have? What if your service organization doesn’t have the ability to diagnose a failure of the new newness?

Rule 5: The only way to develop the capability to handle newness is to pair a soon-to-be great project manager with an already great project manager. 

It may sound like an inefficient way to solve the problem, but pairing the two project managers is a lot more efficient than letting a soon-to-be great project manager crash and burn.  After an inexperienced project manager runs a project into the ground, what’s the first thing you do?  You bring in a great project manager to get the project back on track and keep them in the saddle until the product launches.  Why not assume the wheels will fall off unless you put a pro alongside the high potential talent?

Rule 6: When your best project managers tell you they need resources, give them what they ask for.

If you want to deliver new value to new customs there’s no better way than to develop good project managers.  A good project manager instinctively knows the critical path; they know how the work is done; they know to unwind situations that needs to be unwound; they have the personal relationships to get things done when no one else can; because they are trusted, they can get people to bend (and sometimes break) the rules and feel good doing it; and they know what they need to successfully launch the product.

If you don’t know your critical path, you don’t know very much.  And if your project managers don’t know the critical path, you should stop what you’re doing, pull hard on the emergency break with both hands and don’t release it until you know they know.

Image credit – Patrick Emerson

There are countless books and articles on innovation.  You can read how others have done it, what worked and what didn’t, how best to organize the company and how to define it.  But I have not read much about how it feels to do innovation.

Before anything meaningful can happen, there must be discontent or anger.  And for that there needs to be a realization that doing things like last time is a bad idea.   This realization is the natural outcome of looking deeply at how things really are and testing the assumptions of the status quo.  And the best way to set all this in motion is to do things that generate immense boredom.

Boredom can be created in two ways.  1. Doing the same boring work in the same boring way.  2. Stopping all activity for 30 minutes a day and swimming in the sea of your boring thoughts.  Both work well, but the second one works faster.

Next, with your discontent in hand, it’s time birth the right question.  Some think this the time for answers, but with innovation the real work is to figure out the question.  The discomfort of trying to discover the right question is seven times more uncomfortable the discomfort of figuring out the right answer.  And once you have the right question, the organization rejects you as a heretic. If the organization doesn’t dismiss you in a visceral way, you know you don’t have the right question.  You will feel afraid, but repeat the cycle until your question threatens the very thing that has made the company successful.   When people treat you like you threaten them, you know you’re on to something.

To answer your question, you need help from the organization, but the organization withholds them from you.  If you are ignored, blocked or discredited, you’re on the right path.  Break the rules, disregard best practices, and partner with an old friend who trusts you.  Together, rally against the organization and do the work to answer your question.  If you feel isolated, keep going.  You will feel afraid and you will second guess yourself.  Proceed to the next step.

Make a prototype that shows the organization that your question has an answer.  Don’t ask, just build.  Show the prototype to three people and prepare for rejection.  You and your prototype will be misunderstood and devalued.  Not to worry, as this is a good sign.  Revise the prototype and repeat.

Do anything you can to show the prototype to a customer.  Video the customer as they interact with the prototype.  You will feel afraid because you are breaking the rules.  This is how you should feel.  Keep going.

Set up a meeting with a leader who can allocate resources.  If you have to, set up the meeting under false pretenses (the organization is still in rejection mode) and show the video.  Because of the uncertainty of their response, you will feel afraid.  Show the video anyway.

The organization is comfortable working in the domains of certainty and control, but innovation is done in the domain of uncertainty.  By definition, the organization will reject your novel work.  If you are rejected, keep going.  Revise your heretical question, build a prototype to answer it, show a customer, show someone who can allocate resources, and be afraid all along the way.  And repeat, as needed.

With innovation, mostly you feel afraid.

Image credit – Tybo

There’s a special type of confusion that has blocked many good ideas from seeing the light of day.  The confusion happens early in the life of a new technology when it is up and running in the lab but not yet incorporated in a product.  Since the new technology provides a new flavor of customer goodness, it has the chance to create incremental sales for the company.  But, since there are no products in the market that provide the novel goodness, by definition there can be no sales from these products because they don’t yet exist.  And here’s the confusion.  Organizations equate “no sales” with “no market”.

There’s a lot of risk with launching new products with new value propositions to new customers.  You invest resources to create the new technologies and products, create the sales tools, train the sales teams, and roll it out well. And with all this hard work and investment, there’s a chance no one will buy it.  Launching a product that improves on an existing product with an existing market is far less risky – customers know what to expect and the company knows they’ll buy it.  The status quo when stable if all the players launch similar products, right up until it isn’t.  When an upstart enters the market with a product that offers new customer goodness (value proposition) the same-old-same-old market-customer dynamic is changed forever.

A market-busting product is usually launched by an outsider – either a big player moves into a new space or a startup launches its first product.  Both the new-to-market big boy and the startup have a far different risk profile than the market leader, not because their costs to develop and launch a new product are different, but because they have not market share.  For them, they have no market share to protect any new sales are incremental.  But for the established players, most of their resources are allocated to protecting their existing business and any resources diverted toward a new-to-market product is viewed as a loss of protective power and a risk to their market share and profitability.   And on top of that, the incumbent sees sales of the new product as a threat to sales of the existing products.  There’s a good chance that their some of their existing customers will prefer the new goodness and buy the new-to-market product instead of the tried-and-true product.  In that way, sales growth of their own new product is seen as an attack no their own market share.

Business leaders are smart.  Theoretically, they know when a new product is proposed, because it hasn’t launched yet, there can be no sales.  Yet, practically, because their prime directive to protect market share is so all-encompassing and important, their vision is colored by it and they confound “no sales” with “no market”.  To move forward, it’s helpful to talk about their growth objectives and time horizon.

With a short time horizon, the best use of resources is to build on what works – to launch a product that builds on the last one.  But when the discussion is moved further out in time, with a longer time horizon it’s a high risk decision to hold on tightly to what you have as the market changes around you.  Eventually, all recipes run out of gas like Henry Ford’s Model T.  And the best leading indicator of running low on fuel is when the same old recipe cannot deliver on medium-term growth objectives.  Short term growth is still there, but further out they are not.  Market forces are squeezing the juice out of your past success.

Ultimately, out of desperation, the used-to-be market leader will launch a new-to-market product.  But it’s not a good idea to do this work only when it’s the only option left.  Before they’re launched, new products that offer new value to customers will, by definition, have no sales.  Try to hold back the fear-based declaration that there is no market.  Instead, do the forward-looking marketing work to see if there is a market.  Assume there is a market and build some low cost learning prototypes and put them in front of customers.  These prototypes don’t yet have to be functional; they just have to communicate the idea behind the new value proposition.

Before there is a market, there is an idea that a market could exist.  And before that could-be market is served, there must be prototype-based verification that the market does in fact exist.  Define the new value proposition, build inexpensive prototypes and put them in front of customers.  Listen to their feedback, modify the prototypes and repeat.

Instead of arguing whether the market exists, spend all your energy proving that it does.

Image credit — lensletter

If you know what to do, do it.  But if you always know what to do, do something else.  There’s no excitement in turning the crank every-day-all-day, and there’s no personal growth.  You may be getting glowing reviews now, but when your process is documented and becomes standard work, you’ll become one of the trivial many that follow your perfected recipe, and your brain will turn soggy.

If you want to do the same things more productively, do continuous improvement.  Look at the work and design out the waste.  I suggest you look for the waiting and eliminate it.  (One hint – look for people or parts queueing up and right in front of the pile you’ll find the waste maker.)  But if you always eliminate waste, do something else.  Break from the minimization mindset and create something new.  Maximize something. Blow up the best practice or have the courage to obsolete your best work.  In a sea of continuous improvement, be the lighthouse of doing new.

When you do something for the first time, you don’t know how to do it. It’s scary, but that’s just the feeling you want.  The cold feeling in your chest is a leading indicator of personal growth.  (If you don’t have a sinking feeling in your gut, see paragraph 1.) But organizations don’t make it easy to do something for the first time.  The best approach is to start small.  Try small experiments that don’t require approval from a budget standpoint and are safe to fail.  Run the experiments under the radar and learn in private.  Grow your confidence in yourself and your thinking.  After you have some success, show your results to people you trust.  Their input will help you grow.  And you’ll need every bit of that personal growth because to staff and run a project to bring your new concept to life you’ll need resources.  And for that you’ll need to dance with the most dangerous enemy of doing new things – the deadly ROI calculation.

The R is for return.  To calculate the return for the new concept you need to know: how many you’ll sell, how much you’ll sell them for, how much it will cost, and how well it will work.  All this must be known BEFORE resources can be allocated. But that’s not possible because the new thing has never been done before.  Even before talking about investment (I), the ROI calculation makes a train wreck of new ideas.  To calculate investment, you’ve got to know how many person-hours will be needed, the cost of the materials to make the prototypes and the lab resources needed for testing.  But that’s impossible to know because the work has never been done before.  The ROI is a meaningless calculation for new ideas and its misapplication has spelled death for more good ideas than anything else known to man.

Use the best practice and standardize the work. There’s immense pressure to repeat what was done last time because our companies prefer incremental growth that’s predictable over unreasonable growth that’s less certain.  And add to that the personal risk and emotional discomfort of doing new things and it’s a wonder how we do anything new at all.

But magically, new things do bubble up from the bottom. People do find the courage to try things that obsolete the business model and deliver new lines of customer goodness.  And some even manage survive the run through the ROI gauntlet.  With odds stacked against them, your best people push through their fears cut through the culture of predictability.

Imagine what they will do when you demand they do new work, give them the tools, time and training to do it, and strike the ROI calculation from our vocabulary.

Image credit – Tony Sergo

You’re never really sure how your new project will turn out, unless you don’t try.  Not trying is the only way to guarantee certainty – certainty that nothing good will come of it.

There’s been a lot of talk about creating a culture where failure is accepted.  But, failure will never be accepted, and nor should it be.  Even the failing forward flavor won’t be tolerated.  There’s a skunk-like stink to the word that cannot be cleansed. Failure, as a word, should be struck from the vernacular.

If you have a good plan and you execute it well, there can be no failure.  The plan can deliver unanticipated results, but that’s not failure, that’s called learning.  If the team runs the same experiment three times in a row, that, too, is not failure.  That’s “not learning”.  The not learning is a result of something, and that something should be pursued until you learn its name and address.  And once named, made to go away.

When the proposed plan is reviewed and improved before it’s carried out, that’s not failure.  That’s good process that creates good learning.  If the plan is not reviewed, executed well and generates results less than anticipated, it’s not failure.  You learned your process needs to change. Now it’s time to improve it.

When a good plan is executed poorly, there is no failure. You learned that one of your teams executed in a way that was different than your expectations.  It’s time to learn why it went down as it did and why your expectations were the way they were.  Learning on all fronts, failing on none.

Nothing good can come of using the f word, so don’t use it.  Use “learn” instead.  Don’t embrace failure, embrace learning. Don’t fail early and often, learn early and often. Don’t fail forward (whatever that is), just learn.

With failure there is fear of repercussion and a puckering on all fronts.  With learning there is openness and opportunity.  You choose the words, so choose wisely.

Image credit –  IZATRINI.com

Why are you holding back?  Why aren’t you giving your best?  Why are you blocking yourself?

An open, honest disagreement can be a positive learning experience for both.  If your intensions are good, everything works out well. I’m not sure why, but when your pockets are full of good intensions, the universe is kind to you.

But the universe’s kindness doesn’t manifest in the outcome you want. It’s a better teacher than that.  The universe has been around a long time and has seen it all.  It understands context.  And it has a good memory.  It uses both as input for its outputs. And to keep things lively, it often exercises its dry sense of humor.  But more than anything, the universe is a good judge of character.  And that’s how it decides how things should go.

A situation has no inherent emotional component.  Any emotion attached to the situation is attached by you.  If you feel fear, it’s not the situation.  You’re afraid.  Things aren’t scary, you make them scary.  Situations don’t hold you back, you do.

Fear is a protection mechanism.  But from what?  If you hold back because you’re afraid what others will think, you are protecting yourself from judgement.  At the surface it looks like you are afraid of being judged by others, but that’s not it. You are afraid of being judged by you.  But if your intensions are good, the universe will give you what you deserve.  There’s nothing to fear.  Yet, you block yourself.

You’re not afraid others will judge you as second class.  You want to avoid the discomfort of judging yourself as second class.  You don’t put yourself out there because you don’t want to be reminded that you don’t feel good about yourself.  People and situations can’t knock you down a rung, only you can.  You have control over how much love you give yourself. And it’s time to give yourself more.

This may sound silly, but it’s not – if you make a little time every day to wish yourself kindness, happiness and peace you will have more peace and happiness.  You will attach less fear to situations judge yourself less and block yourself less.

Give it a try.  You’re worth it.

The biggest blocker of company growth is your successful business model.  And the more significant it’s historical success, the more it blocks.

Novelty meaningful to the customer is the life force of company growth.  The easiest novelty to understand is novelty of product function.  In a no-to-yes way, the old product couldn’t do it, but the new one can.  And the amount of seconds it takes for the customer to notice (and in the case of meaningful novelty, appreciate) the novelty is in an indication of its significance.  If it takes three months of using the product, rigorous data collection and a t-test, that’s not good.  If the customer turns on the product and the novelty smashes him in the forehead like a sledgehammer, well, that’s better.

It’s difficult to create a product with meaningful novelty.  Engineers know what they know, marketers know what they market, and the salesforce knows how to sell what they sell.  And novelty cuts across their comfort.  The technology is slightly different, the marketing message diverges a bit, and the sales argument must be modified.  The novelty is driven by the product and the people respond accordingly.  And, the new product builds on the old one so there’s familiarity.

Where injecting novelty into the product is a challenge, rubbing novelty on the business model provokes a level 5 pucker.  Nothing has the stopping power of a proposed change to the business model.  Novelty in the product is to novelty in the business model as lightning is to lightning bug – they share a word, but that’s it.

Novelty in the product is novelty of sheet metal, printed circuit boards and software.  Novelty in the business model is novelty in how people do their work and novelty in personal relationships.  Novelty in the product banal, novelty in the business model is personal.

No tools or best practices can loosen the pucker generated by novelty in the business model.  The tired business model has been the backplane of success for longer than anyone can remember.  The long-in-the-tooth model has worn deep ruts of success into the organization.  Even the all-powerful Lean Startup methodology can’t save you.

The healing must start with an open discussion about the impermanence of all things, including the business model.  The most enduring radioactive element has a half-life, and so does the venerable business model, even the most successful.

Where novelty in the product is technical, novelty in the business model is emotional. And that’s what makes it so powerful.  Sprinkling the business model with novelty is scary at a deeply personal level – career jeopardy, mortgage insecurity and family volatility are primal drivers.  But if you can push through, the rewards are magical.

Your business model has shaped you into an organization that’s optimized to do what it does. You can’t create new markets and sell to new products to new customers without changing your business model.  Your business model may have been your secret sauce, but the world’s tastes have changed.  It’s time to put your success behind you.

Image credit — MandaRose

Every idea that’s worth its salt will be rejected out of hand.  That’s just how it is.  You can get angry because you didn’t get the support you think you deserve or you can accept the fact that their negative reaction is about them.  The first way you shut down and your idea dies on the vine.  The second way you let their negativity pass right through you and continue your uphill slog until your idea is commercialized.  Either way, it’s your choice.

It’s difficult to let others’ negativity pass though you.  It may be easier to flip the situation on its head.

When confronted with an exceptional idea, people generate a negative response.  The underlying feeling is fear, but usually manifests as aggressive dismissal.  Instead of reacting with anger, maybe you can learn to see their fear-based reaction as a signifier of significance.  When you have a tooth with a cavity and you drink cold water, your tooth creates a reactionary zing of electrical energy, a tell-tale sign of the underlying decay.  The zing signifies the significance.  Just as the cold water elicits an electrical response from the cavity, the exceptional idea elicits a negative response from the person.  Don’t worry about the negative response, revel in it.

The only thing better than an idea that is so good it threatens is an idea that’s so good no one can understand.  These ideas are so deep, no novel, so twisted they conflict with conventional wisdom.  These ideas confuse everyone, especially the experts.  At first the experts aren’t threatened because they don’t yet understand.  They chuckle and take pity on you for thinking such strange thoughts.  Just as a negative reaction indicates significance, their chuckles and pity are leading indicators of significance.  Don’t let their reactions deter you, let them inspire you.  As your unconventional wisdom seeps into them and they begin to understand, their chuckles will morph into aggressive dismissal.  This tell-tale sign makes it clear you’re on to something.

If your idea doesn’t get a negative reaction, you’re not trying hard enough. Think bigger.  If your idea doesn’t threaten your most profitable product, come up with one that does.  If your idea doesn’t shake the fillings out of your business model, go away and don’t come back to you have one that does.

Companies don’t need more ideas, they need ideas that are more creative.  They don’t need more continuous improvement, they need more discontinuous improvement.  And they don’t need ideas that build on success, they need ideas that dismantle it.

If your ideas don’t threaten, don’t bother.

Image credit — Ed Schipul

Today marks six years of blog posts published every Wednesday evening.  300 weeks in a row and I haven’t skipped, forgot, or repeated.  All written without an editor, though you knew that by the typos and grammar stumbles.

It’s a challenge to write every week, but it’s worth it.  Writing demands thinking things through, which can be difficult especially if you want to write clearly, but thinking things through creates knowledge.  Deep knowledge.

Over the last year I wrote a lot about self-awareness, mindfulness and intentions.  I’m better for my meditations, and through osmosis, so are some of the people closest to me. I expect you’ll hear more on these themes over the next year.

I’ve put myself out there with my writing.  With some posts I’m afraid to hit the publish key, and those are the posts that matter.  My fear is the signal there’s something important in the post.  I hope to write more of those.

I strive to write clearly and densely and avoid buzzwords.  Innovation is the buzzword that trips me up.  But like He-Who-Shall-Not-Be-Named, I’ll see if I can avoid calling it by name. (And never three times in the same post.)  And my call-to-arms will be clearer, plainer, denser.

I’m not sure what next year will bring, but I hope it will be 52 more posts.

Thanks for reading.

Mike

Image credit – Bart.

Our unhealthy fascination with ever-increasing shareholder value has officially gone too far.  In some companies dishonesty is now more culturally acceptable than missing the numbers. (Unless, of course, you get caught. Then, it’s time for apologies.)  The sacrosanct mission statement can’t save us.  Even the most noble can be stomped dead by the dirty boots of profitability.

Though, legally, companies can self-regulate, practically, they cannot.  There’s nothing to balance the one-sided, hedonistic pursuit of profitability.  What’s needed is a counterbalancing mechanism of equal and opposite force.  What’s needed is a new role that is missing from today’s org chart and does not have a name.

Ombudsman isn’t the right word, but part of it is right – the part that investigates.  But the tense is wrong – the ombudsman has after-the-fact responsibility.  The ombudsman gets to work after the bad deed is done.  And another weakness – ombudsman don’t have equal-and-opposite power of the C-suite profitability monsters. But most important, and what can be built on, is the independent nature of the ombudsman.

Maybe it’s a proactive ombudsman with authority on par with the Board of Directors.  And maybe their independence should be similar to a Supreme Court justice.  But that’s not enough.  This role requires hulk-like strength to smash through the organizational obfuscation fueled by incentive compensation and x-ray vision to see through the magical cloaking power of financial shenanigans.  But there’s more. The role requires a deep understanding of complex adaptive systems (people systems), technology, patents and regulatory compliance; the nose of an experienced bloodhound to sniff out the foul; and the jaws of a pit bull that clamp down and don’t let go.

Ombudsman is more wrong than right.  I think liability is better. Liability, as a word, has teeth.  It sounds like it could jeopardize profitability, which gives it importance.  And everyone knows liability is supposed to be avoided, so they’d expect the work to be proactive.  And since liability can mean just about anything, it could provide the much needed latitude to follow the scent wherever it takes.  Chief Liability Officer (CLO) has a nice ring to it.

[The Chief Do-The-Right-Thing Officer is probably the best name, but its acronym is too long.]

But the Chief Liability Officer (CLO) must be different than the Chief Innovation Officer (CIO), who has all the responsibility to do innovation with none of the authority to get it done.  The CLO must have a gavel as loud as the Chief Justice’s, but the CLO does not wear the glasses of a lawyer.  The CLO wears the saffron robes of morality and ethics.

Is Chief Liability Officer the right name?  I don’t know. Does the CLO report to the CEO or the Board of Directors?  Don’t know.  How does the CLO become a natural part of how we do business?  I don’t know that either.

But what I do know, it’s time to have those discussions.

Image credit – Dietmar Temps