Shipulski On Design

Archive for the ‘Risk’ Category

If you want to make a difference, build trust.

If you want to build trust, do a project together.

If you want to build more trust, help the team do work they think is impossible.

If you want to build more trust, contribute to the project in the background.

If you want to build more trust, actively give credit to others.

If you want to build more trust, deny your involvement.

If you want to create change, build trust.

If you want to build trust, be patient.

If you want to build more trust, be more patient.

If you want to build more trust, check your ego at the door so you can be even more patient.

If you want to have influence, build trust.

If you want to build trust, do something for others.

If you want to build more trust, do something for others that keeps them out of trouble.

If you want to build more trust, do something for others that comes at your expense.

If you want to build more trust, do it all behind the scenes.

If you want to build more trust, plead ignorance.

If you want the next project to be successful, build trust.

If you want to build trust, deliver what you promise.

If you want to build more trust, deliver more than you promise.

If you want to build more trust, deliver more than you promise and give the credit to others.

If you want deep friendships, build trust.

If you want to build trust, give reinforcing feedback.

If you want to build more trust, give reinforcing and correcting feedback in equal amounts.

If you want to build trust, give reinforcing feedback in public and correcting feedback in private.

If you want your work to have meaning, build trust.

“[1823] Netted Pug (Eupithecia venosata)” by Bennyboymothman is licensed under CC BY 2.0

If the project could obsolete your best work, do it.  Otherwise, do something else.

But first, makes sure there’s solid execution on the turn-the-crank projects that pay the bills.

If you always say yes to projects, you never have the bandwidth to do the magical work no one is asking for.

When was the last time you used your discretion to work on a project of your choosing? How do you feel about that?

If you’re told to stop the project by the most successful business unit, stomp on the accelerator.

The best projects aren’t the ones with the best ROI. The best projects are the ones that threaten success.

If you’re certain of a project’s ROI, there is no novelty.

If the project has novelty, you can’t predict the ROI. All you can do is decide if it’s worth doing.

There’s a big difference between calculating an ROI and predicting the commercial success of a project.

If your company demands certainty, you can be certain the new projects will be just like the old ones.

If the success of a project hinges on work hasn’t been done before, you may have a winner.

Say yes to predictability and you say no to novelty.

Say no to novelty and you say no to innovation.

Say no to innovation and you say no to growth.

Say no to growth and the game is over.

Say no to good projects so you can say yes to the magical ones.

Say no to ROI so you work on projects that could reinvent the industry.

If the project doesn’t excite, just say no.

Image credit – Lucie Provincher

If you want new behavior, you must embrace conflict.

If you can’t tolerate the conflict, you’ll do what you did last time.

If your point of view angers half and empowers everyone else, you made a difference.

If your point of view meets with 100% agreement, you wasted everyone’s time.

If your role is to create something from nothing, you’ve got to let others do the standard work.

If your role is to do standard work, you’ve got to let others create things from scratch.

If you want to get more done in the long term, you’ve got to make time to grow people.

If you want to get more done in the short term, you can’t spend time growing people.

If you do novel work, you can’t know when you’ll be done.

If you are asked for a completion date, I hope you’re not expected to do novel work.

If you’re in business, you’re in the people business.

If you’re not in the people business, you’ll soon be out of business.

If you call someone on their behavior and they thank you, you were thanked by a pro.

If you call someone on their behavior and they call you out for doing it, you were gaslit.

If you can’t justify doing the right project, reduce the scope, and do it under the radar.

If you can’t prevent the start of an unjust project, find a way to work on something else.

If you are given a fixed timeline and fixed resources, flex the schedule.

If you are given a fixed timeline, resources, and schedule, you’ll be late.

If you get into trouble, ask your Trust Network for help.

If you have no Trust Network, you’re in trouble.

If you have a problem, tell the truth and call it a problem.

If you can’t tell the truth, you have a big problem.

If you are called on your behavior, own it.

If you own your behavior, no one can call you on it.

Image credit – Mary Trebilco

Do you bring your whole self to work? If not, how do you feel about that?

When you demonstrate your unique goodness and it’s met with “You don’t fit in.” they may say they want you to fit in, but, really, that’s objective evidence that they need your unique goodness.

Witches were burned at the stake because their special powers frightened people.

If it’s a good idea, don’t block it because people call it heresy.

The Universe doesn’t care if it’s heresy, as long as it’s a good idea.

The Universe doesn’t discriminate against witches.

If you’re a plumber that fixes pipes and fixes potholes, they’ll expect you to fix pipes and fill potholes.

Sometimes you’ve got to withhold the solution If you want the organizational learning to happen.

If you fill all the potholes, the company never learns that someone’s not doing their job.

A plumber who fixes pipes and fills potholes should be paid more than a plumber that just fixes pipes.

When no one listens to reason, the only thing left to do is let the wheels fall off.

And if you really care about the long-term success of the company, you’ll let them fall off.

If you see things differently, you’re obligated to say so, even if you’re wrong.

When you speak truth to Power, does Power thank you or kick you?

If after speaking unsayable truth to Power, they kick you, that says a lot about Power.

When you’re satisfied with what you have, striving-based motivation tactics have no power.

It’s easy to mentor down into the organization, but it takes a special person to mentor uphill.

Never do your boss’s job.

When successful thinking becomes geriatric, it’s time for hospice.

Successful business models change only after they become unsuccessful.

Change happens only after exhausting all other possibilities. And it takes special people to make it happen.

If you ‘re afraid and hold back because you’re concerned about being burned at the stake, you should put your magic wand in your pocket, jump on your broom (or vacuum cleaner), and find another job.

Image credit — Jerzy Kociatkiewicz

If you want to do a task, but you don’t have what you need, that’s waiting for a support resource. If you need a tool, but you don’t have it, you wait for a tool. If you need someone to do the task, but you don’t have anyone, you wait for people. If you need some information to make a decision, but you don’t have it, you wait for information.

If a tool is expensive, usually you have to wait for it. The thinking goes like this – the tool is expensive, so let’s share the cost over too many projects and too many teams. Sure, less work will get done, but when we run the numbers, the tool will look less expensive because it’s used by many people.  If you see a long line of people (waiting) or a signup list (people waiting at their desks), what they are waiting for is usually an expensive tool or resource. In that way, to find the cause of waiting, stand at the front of the line and look around. What you see is the cause of the waiting.

If the tool isn’t expensive, buy another one and reduce the waiting. If the tool is expensive, calculate the cost of delay.  Cost of delay is commonly used with product development projects. If the project is delayed by a month, the incremental revenue from the product launch is also delayed by a month.  That incremental revenue is the cost of delaying the project by a month. When the cost of delay is larger than the cost of an expensive tool, it makes sense to buy another expensive tool. But, to purchase that expensive tool requires multiple levels of approvals.  So, the waiting caused by the tool results in waiting for approval for the new tool. I guess there’s a cost of delay for the approval process, but let’s not go there.

Most companies have more projects than people, and that’s why projects wait. And when projects wait, projects are late. Adding people is like getting another expensive tool.  They are spread over too many projects, and too little gets done. And like with expensive tools, getting more people doesn’t come easy. New hires can be justified (more waiting in the approval queue), but that takes time to find them, hire them, and train them. Hiring temporary people is a good option, though that can seem too expensive (higher hourly rate), it requires approval, and it takes time to train them.  Moving people from one project to another is often the best way because it’s quick and the training requirement is less.  But, when one project gains a person, another project loses one. And that’s often the rub.

When it’s time to make an important decision and the team has to wait for missing information, the project waits. And when projects wait, projects are late. It’s difficult to see the waiting caused by missing or uncommunicated information, but it can be done. The easiest to see when the information itself is a project deliverable. If a milestone review requires a formal presentation of the information, the review cannot be held without it. The delay of the milestone review (waiting) is objective evidence of missing information.

Information-based waiting is relatively easy to see when the missing information violates a precedent for decision making.  For example, if the decision is always made with a defined set of data or information, and that information is missing, the precedent is violated and everyone knows the decision cannot be made. In this case, everyone’s clear why the decision cannot be made, everyone’s clear on what information is missing, and everyone’s clear on who dropped the ball.

It’s most difficult to recognize information-based waiting when the decision is new or different and requires judgment because there’s no requirement for the data and there’s no precedent to fall back on. If the information was formally requested and linked to the decision, it’s clear the information is missing and the decision will be delayed.  But if it’s a new situation and there’s no agreement on what information is required for the decision, it’s almost impossible to discern if the information is missing. In this situation, it comes down to trust in the decision-maker. If you trust the decision-maker and they say there’s information missing, then there’s information missing. If you trust the decision-maker and they say there’s no information missing, they should make the decision. But if you don’t trust the decision-maker, then all bets are off.

In general, waiting is bad.  And it’s helpful if you can recognize when projects are waiting. Waiting is especially bad went the delayed task is on the critical path because when the project is waiting on a task that’s on the critical path, there’s a day-for-day slip in the completion date.  Hint: it’s important to know which tasks and decisions are on the critical path.

Image credit — Tomasz Baranowski

Do it for them, then explain. When the work is new for them, they don’t know how to do it. You’ve got to show them how to do it and explain everything. Tell them about your top-level approach; tell them why you focus on the new elements; show them how to make the chart that demonstrates the new one is better than the old one. Let them ask questions at every step. And tell them their questions are good ones.  Praise them for their curiosity. And tell them the answers to the questions they should have asked you. And tell them they’re ready for the next level.

Do it with them, and let them hose it up. Let them do the work they know how to do, you do all the new work except for one new element, and let them do that one bit of new work. They won’t know how to do it, and they’ll get it wrong. And you’ve got to let them.  Pretend you’re not paying attention so they think they’re doing it on their own, but pay deep attention.  Know what they’re going to do before they do it, and protect them from catastrophic failure.  Let them fail safely.  And when then hose it up, explain how you’d do it differently and why you’d do it that way.  Then, let them do it with your help. Praise them for taking on the new work. Praise them for trying. And tell them they’re ready for the next level.

Let them do it, and help them when they need it. Let them lead the project, but stay close to the work.  Pretend to be busy doing another project, but stay one step ahead of them. Know what they plan to do before they do it.  If they’re on the right track, leave them alone.  If they’re going to make a small mistake, let them. And be there to pick up the pieces.  If they’re going to make a big mistake, casually check in with them and ask about the project. And, with a light touch, explain why this situation is different than it seems.  Help them take a different approach and avoid the big mistake. Praise them for their good work. Praise them for their professionalism. And tell them they’re ready for the next level.

Let them do it, and help only when they ask. Take off the training wheels and let them run the project on their own. Work on something else, and don’t keep track of their work. And when they ask for help, drop what you are doing and run to help them. Don’t walk. Run. Help them like they’re your family. Praise them for doing the work on their own. Praise them for asking for help. And tell them they’re ready for the next level.

Do the new work for them, then repeat. Repeat the whole recipe for the next level of new work you’ll help them master.

Image credit — John Flannery

All-or-nothing thinking is exciting – we’ll launch a whole new product family all at once and take the market by storm! But it’s also dangerous – if we have one small hiccup, “all” turns into “nothing” in a heartbeat. When you take an all-or-nothing approach, it’s likely you’ll have far too little “all” and far too much “nothing”.

Instead of trying to realize the perfection of “all”, it’s far better to turn nothing into something.  Here’s the math for an all-or-nothing launch of product family launch consisting of four products, where each product will create $1 million in revenue and the probability of launching each product is 0.5 (or 50%).

1 product x $1 million x 0.5 = $500K

2 products x $1 million x 0.5 x 0.5 = $500K

3 products x $1 million x 0.5 x 0.5 x 0.5 = $375K

4 products x $1 million x 0.5 x 0.5 x 0.5 x 0.5 = $250K

In the all-or-nothing scheme, the launch of each product is contingent on all the others.  And if the probability of each launch is 0.5, the launch of the whole product family is like a chain of four links, where each link has a 50% chance of breaking.  When a single link of a chain breaks, there’s no chain. And it’s the same with an all-or-nothing launch – if a single product isn’t ready for launch, there are no product launches.

But the math is worse than that. Assume there’s new technology in all the products and there are five new failure modes that must be overcome.  With all-or-nothing, if a single failure mode of a single product is a problem, there are no launches.

But the math is even more deadly than that. If there are four use models (customer segments that use the product differently) and only one of those use models creates a problem with one of the twenty failure modes (five failure modes times four products) there can be no launches. In that way, if 25% of the customers have one problem with a single failure mode, there are can be no launches.  Taken to an extreme, if one customer has one problem with one product, there can be no launches.

The problem with all-or-nothing is there’s no partial credit – you either launch four products or you launch none. Instead of all-or-nothing, think “secure the launch”. What must we do to secure the launch of a single product? And once that one’s launched, the money starts to flow.  And once we launch the first one, what must we do to secure the launch the second? (More money flows.) And, once we launch the third one…. you get the picture. Don’t try to launch four at once, launch a single product four times in a row. Instead of all-or-nothing, think one-in-a-row, where revenue is achieved after each launch of a single launch.

And there’s another benefit to launching one at a time. The second launch is informed by learning from the first launch.  And the third is informed by the first two. With one-in-a-row, the team gets smarter and each launch gets better.

Where all-or-nothing is glamorous, one-in-a-row is achievable. Where all-or-nothing is exciting, one-in-row is achievable. And where all-or-nothing is highly improbable, one-in-a-row is highly profitable.

Image credit – Mel

Here are some important questions for innovation.

What’s the Distinctive Value Proposition? The new offering must help the customer make progress. How does the customer benefit? How is their life made easier? How does this compare to the existing offerings? Summarize the difference on one page. If the innovation doesn’t help the customer make progress, it’s not an innovation.

Is it too big or too small?  If the project could deliver sales growth that would dwarf the existing sales numbers for the company, the endeavor is likely too big.  The company mindset and philosophy would have to be destroyed.  Are you sure you’re up to the challenge? If the project could deliver only a small increase in sales, it’s likely not worth the time and expense.  Think return on investment.  There’s no right answer, but it’s important to ask the question and set the limits for too big and too small.  If it could grow to 10% of today’s sales numbers, that’s probably about right.

Why us? There’s got to be a reason why you’re the right company to do this new work.  List the company’s strengths that make the work possible. If you have several strengths that give you an advantage, that’s great.  And if one of your weaknesses gives you an advantage, that works too. Step on the accelerator.  If none of your strengths give you an advantage, choose another project.

How do we increase our learning rate? First thing, define Learning Objectives (LOs). And once defined, create a plan to achieve them quickly.  Here’s a hint. Define what it takes to satisfy the LOs. Here’s another hind. Don’t build a physical prototype. Instead, create a website that describes the potential offering and its value proposition and ask people if they want to buy it. Collect the data and refine the offering based on your learning. Or, create a one-page sales tool and show it to ten potential customers. Define your learning and use the learning to decide what to do next.

Then what? If the first phase of the work is successful, there must be a then what. There must be an approved plan (funding, resources) for the second phase before the first phase starts.  And the same thing goes for the follow-on phases. The easiest way to improve innovation effectiveness is avoid starting phase one of projects when their phase two is unfunded. The fastest innovation project is the wrong one that never starts.

How do we start? Define how much money you want to spend. Formalize your business objectives.  Choose projects that could meet your business objectives. Free up your best people. Learn as quickly as you can.

Image credit — Alexander Henning Drachmann

There are four ways to run projects.

One – 80% Right, 100% Done, 100% On Time, 100% On Budget

• Fix time
• Fix resources
• Flex scope and certainty

Set a tight timeline and use the people and budget you have.  You’ll be done on time, but you must accept a reduced scope (fewer bells and whistles) and less certainty of how the product/service will perform and how well it will be received by customers. This is a good way to go when you’re starting a new adventure or investigating new space.

Two – 100% Right, 100% Done, 0% On Time, 0% On Budget

• Fix resources
• Fix scope and certainty
• Flex time

Use the team and budget you have and tightly define the scope (features) and define the level of certainty required by your customers. Because you can’t predict when the project will be done, you’ll be late and over budget, but your offering will be right and customers will like it. Use this method when your brand is known for predictability and stability. But, be weary of business implications of being late to market.

Three – 100% Right, 100% Done, 100% On Time, 0% On Budget

• Fix scope and certainty
• Fix time
• Flex resources

Tightly define the scope and level of certainty. Your customers will get what they expect and they’ll get it on time.  However, this method will be costly. If you hire contract resources, they will be expensive.  And if you use internal resources, you’ll have to stop one project to start this one. The benefits from the stopped project won’t be realized and will increase the effective cost to the company.  And even though time is fixed, this approach will likely be late.  It will take longer than planned to move resources from one project to another and will take longer than planned to hire contract resources and get them up and running.  Use this method if you’ve already established good working relationships with contract resources.  Avoid this method if you have difficulty stopping existing projects to start new ones.

Four – Not Right, Not Done, Not On Time, Not On Budget

• Fix time
• Fix resources
• Fix scope and certainty

Though almost every project plan is based on this approach, it never works.  Sure, it would be great if it worked, but it doesn’t, it hasn’t and it won’t. There’s not enough time to do the right work, not enough money to get the work done on time and no one is willing to flex on scope and certainty.  Everyone knows it won’t work and we do it anyway.  The result – a stressful project that doesn’t deliver and no one feels good about.

Image credit – Cees Schipper

Is it innovation or continuous improvement or is it innovation? Is it regular innovation or disruptive innovation? Is it new enough or too new? These questions are worse than meaningless as they suck emotional energy from the organization and divert emotional energy from the business objective.

With every initiative, there are risks, rewards, and resources. Risk generally tracks with newness, reward usually tracks with incremental customer goodness and resources are governed by the work.  Risk is about the probability of tackling the newness, reward is about the size of the prize and resources are about how the work is done. There is no best amount of risk as sometimes the right amount is none and other times it’s more than everyone prefers. And there’s no best amount of reward as it depends on the company’s goals. And there’s no right amount of resources because there’s no right scope.  For all three – risk, reward and resources – the right amount depends on the context.

For bottom line projects, it’s about maintaining product functionality while eliminating waste.  And while there’s no right amount of risk, reward and resources, three filters (people, process, tools) can help get everyone on the same page.

Here are the escalating categories for people – no new people, move people from group A to group B, hire more people like the ones we have, hire new people with skills we don’t have.  And for categories for process – no new processes, eliminate steps of existing processes, add steps to existing processes, create a process that’s new to the facility, create a process that’s new to the company, create process that’s new to the industry, create a process that’s new to the world.  And for tools – no new tools, modify existing tools, buy new tools, create new tools from scratch.

There are no right answers, but if you’ve got to hire people you’ve never hired, create processes that are new-to-world, and invent new tools, it’s clear to everyone the project is pushing the envelope. And if the reward is significant and resources are plentiful, it could be a good way to go.  And if there are no new hires, no new processes, and no new tools, don’t expect extravagant rewards. It’s not an exact science, but categorizing the newness in people, process, and tools and then comparing with the reward (payoff) makes clear any mismatches.  And when mismatches are clear they can be managed. Resources can be added, the scope can be reduced and reward can be revisited.

For top line projects, it’s about providing novel usefulness to customers at a reasonable cost.  And while risk, reward, and resources must be balanced, the filters are different.  For top line, the filters are breadth of applicability, competition, is/isn’t.

Here are the escalating categories for breadth of applicability – same customer in the same application, same customers in a new application, new customers in a new market, new customers in different industry, new customers in an industry created by the project. For competition – many competitors in the same industry, fewer competitors in the same industry, fewer competitors in a different industry, no competitors (compete with no one.) And for is/isn’t – improve what is, radically improve what is, create what isn’t.

Again, no right answers. But the plan is to sell to the same customers into markets with the same powerful competitors with only a slight improvement to the existing product, don’t expect radical rewards and don’t run a project that consumes significant resources. And, if the plan is to create a whole new industry where there are no competitors and it requires an entirely new service that doesn’t yet exist, the potential reward should be spectacular, expect to allocate a boatload of resources and prepare for the project to take longer than expected or to be cancelled before completion.

Balancing risk, reward and resources is not an exact science.  And the only way to get good at it is to calibrate new projects based on previous projects.  To start the calibration process, try the process on your most recent completed projects.  Categorize the projects with the relevant filters and define the resources consumed and the realized rewards.  And when planning the next project, categorize with the filters and define the resource plan and planned rewards and see how they compare with the completed projects.  And if there are mismatches, reconcile them with the realities of the previous projects.

Image credit – Ian Sane

Big companies hold tightly to what they have until they feel threatened by upstarts, and not before. They mobilize only when they see their sales figures dip below the threshold of tolerability, and no sooner. And if they’re the market leaders, they delay their mobilization through rationalization.  The dip is due to general economic slowdown that is out of our control, the dip is due to temporary unrest from the power structure change in government, or the dip is due to some ethereal force we don’t yet fully understand. The strength of big companies is what they have, and they do what it takes only when what they have is threatened.  But once they’re threatened, watch out. But, the truth is, big companies don’t make change, people within big companies make change.

Start-ups want to change everything. They reject what they don’t have and threaten the status-quo at every turn.  And they’re always mobilized to grow sales.  Every new opportunity brings an opportunity to change the game. In a ready-fire-aim way, every phone call with a potential customer is an opportunity to dilute and defocus. Each new opportunity is an opportunity to create a mega business and each new customer segment is an opportunity to pivot. The strength of start-ups is what they don’t have. No loyalty to an existing business model, no shared history with other companies, and no NIH (not invented here). But, once they focus and decide to converge on an important market segment, watch out.  But, truth is, start-ups don’t make change, people within start-ups make change.

When you work in a big company, if your idea is any good the established business units will try to stomp it into oblivion because it threatens their status quo.  In that way, if your idea is dismissed out of hand or stomped on aggressively, you are likely onto something worth pursuing. If you’re told by the experts “It will never work.” that’s a sign from the gods that your idea has strong merit and deserves to be worked. And this is where it comes down to people. The person with the idea can either pack it in or push through the intellectual inertia of company success.  To be clear – it’s their choice. If they pack it in, the idea never sees the light of day. But if they decide, despite the fact they’re not given the tools, time, or training, to build a prototype and show it to company leadership, your company has a chance to reinvent itself. What causes and conditions have you put in place for your passionate innovators to choose to do the hard work of making a prototype?

When you work at a start-up the objective is to dismantle the status quo, and all ideas are good ideas. In that way, your idea will be praised and you’ll be urged to work on it. If you’re told by the experts “That could work.” it does not mean you should work on it. Since resources are precious, focus is mandatory. The person with the idea can either try to convert their idea into a prototype or respect the direction set by company leadership. To be clear – it’s their choice. If they work on their new idea they dilute the company’s best chance to grow. But if they decide, despite their excitement around their idea, to align with the direction set by the company, your startup has a chance to deliver on its aggressive promises. What causes and conditions have you put in place for your passionate innovators to choose to do the hard work of aligning with the agreed upon approach and direction?

When no one’s looking, do you want your people to try new ideas or focus on the ones you already have? When given a choice, do you want them to focus on existing priorities or blow them out of the water? And if you want to improve their ability to choose, what can you put in place to help them choose wisely?

To be clear, a formal set of decision criteria and a standardized decision-making process won’t cut it here. But that’s not to say decisions should be unregulated and unguided. The only thing that’s flexible and powerful enough to put things right is the good judgment of the middle managers who do the work.  “Middle managers” is not the best words to describe who I’m talking about. I’m talking about the people you call when the wheels fall off and you need them put back on in a hurry. You know who I’m talking about.  In start-ups or big companies, these people have a deep understanding of what the company is trying to achieve, they know how to do the work and know when to say “give it a try” and when to say “not now.” When people with ideas come to them for advice, it’s their calibrated judgement that makes the difference.

Calibrated judgement of respected leaders is not usually called out as a make-or-break element of innovation, growth and corporate longevity, but is just that.  But good judgement around new ideas are the key to all three.  And it comes down to a choice – do those ideas die in the trenches or are they kindly nurtured until they can stand on their own?

No getting around it, it’s a judgment call whether an idea is politely put on hold or accelerated aggressively. And no getting around it, those decisions make all the difference.

Image credit Mark Strozier