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Strategy

Managing The Matrix

Task: Assemble the best team.

Task: Assemble the best team.

One of my largest clients is re-engineering its organization to focus on functions rather than geographies. It’s a classic move from top-down management to matrix management. I think it’s very much the right thing to do but it’s making some of the managers nervous. How does one shift from managing a team to managing a matrix?

I went through a similar transition at Lawson, the last major software company that I worked for. We transitioned from geographies – Sweden, Western USA, Australia/New Zealand – to global teams that focused on vertical markets like healthcare, food and beverage, and fashion. We focused on industries rather than geographies and became expert advisors to our customers.

And what did I learn about managing in a matrix? Here are the key ideas that stood out for me.

Connectors succeed – in a geographic organization, a manager gets to know her team and learns how to accentuate their strengths and minimize their weaknesses. Team members are often physically close to each other. There’s no need to connect them; they’re already connected. In a matrix, the ability to connect people is the most important single skill. People who are natural connectors are often the best matrix managers.

Diplomacy counts – diplomacy is a useful skill for any manager. It’s especially important in a matrix. In a top-down organization, a manager could simply give orders without much tact or diplomacy. Not so in a matrix. A matrix manager is forever building teams – one team to address Issue X, and another to address Issue Y. A matrix manager is always recruiting and needs a positive attitude, good diplomatic skills, and a good understanding of what motivates people.

A good manager can build all-star teams – let’s say I wanted to sell Lawson software to the Swedish fashion house, Filippa K. With the right diplomatic and connecting skills, I could assemble an all-star team to sell the account. My team might include a design expert from New Zealand, a cut-and-sew expert from New York, and a retail expert from Stockholm. I pull them together and focus them intently on the task of selling to Filippa K. Once they sell the account, the team dissolves and the team members reassemble — perhaps with other teammates – to focus on a different project. The good news is that a matrix manager gets to work with all-stars all the time. The not-so-bad news is that a successful matrix manager needs to continually assemble and re-assemble teams in ever-changing patterns.

Talent spotting becomes more important– in a geographic organization, employees do multiple things in a designated area. They become jacks-of-all-trades. In a matrix organization, employees are much more likely to specialize in a given function. They can master the skill. The successful matrix manager knows how to spot the most talented employees and recruit them to her (temporary) team.

Flexibility and adaptability count – flexibility is the strongest point of matrix organization. Managers can quickly assemble and re-assemble teams based on changing needs. This only works if managers are equally flexible. Managers must be fluid; they can’t stay attached to a permanent structure. There is no permanent structure.

Managers must work effectively with each other – in a matrix, an employee often has more than one manager on a given project. For instance, that retail expert from Stockholm would report to me temporarily while working on the Filippa K account. At the same time, she would also report to the overall head of the retail team, who might be located in Melbourne. It can get confusing and roles need to be clearly defined. At the same time, managers need to work effectively with their peers cross the matrix. If I have a beef with the manager in Melbourne, things will go downhill quickly. Again, diplomacy and good communication are key ingredients for success.

The matrix changes the culture – in geographic organizations, teams may easily fall into competition with each other. I would have no incentive to lend my retail expert to another geography. That would only crimp my chances of making my number. A matrix, on the other hand, emphasizes cooperation. If a manager doesn’t make her all-stars available, she doesn’t get access to other all-stars. Sharing becomes more important than competing.

Ultimately, good managers have nothing to be afraid of in a matrix organization. Even in traditional top-down organizations, good managers are likely to be effective communicators and motivators with good diplomatic skills. Those are the same skills that are required to succeed in a matrix.

Another Reason For Female Executives

Which gender norms should we adopt?

Which gender norms should we adopt?

Want to get stuff done? You may need to compromise occasionally. Who’s better at that? Who do you think?

A recent study in the Journal Of Consumer Research (abstract here; pdf here) suggests that men working with men tend not to compromise. By contrast, men working with women or women working with women are more likely to find the middle ground.

The article, by Hristina Nikolova and Cait Lamberton – professors at Boston College and the University of Pittsburgh respectively — focuses on consumer behavior and is probably most relevant to marketing strategists. But I wonder if it doesn’t have much broader implications as well.

The study revolves around the compromise effect, which is well understood in marketing circles. Let’s say that you want to buy a car and you have two decision criteria: efficiency and prestige. Car X is clearly better on efficiency and OK on prestige. Car Y is clearly better on prestige and OK on efficiency. Car Y is also more expensive than Car X.

Which one do you buy? It’s a tough choice. So the salesperson introduces the even more expensive Car Z, which is even better on prestige than Car Y. Now Car Y is the compromise choice – it’s OK on efficiency and pretty good on prestige. With three choices available, Car Y is not the top of the line on either criterion but it’s acceptable on both criteria. The compromise effect suggests that you’ll buy Car Y.

The compromise effect has been demonstrated in any number of studies. Indeed, it’s why restaurants often add a very high-priced item to their menus. The item probably doesn’t sell very often but it makes everything else look more reasonable.

But what if you’re making the decision with another person? This hasn’t been studied before and Nikolova and Lamberton focus their attention on decisions made by two people acting together (also known as dyads). The authors looked at three different dyads:

  • Male/male
  • Female/male
  • Female/female

Under five different conditions, Nikolova and Lamberton found essentially the same results. First, the compromise effect seems to work “normally” with female/female and female/male dyads. Second, the compromise effect has much less impact on male/male dyads. Such dyads tend to move toward one of the extremes – either Car X or Car Z in our example.

Why would this be? The authors suggest that it has to do with gender norms coupled with the act of being observed. They write, “Normative beliefs about women’s behavior suggest that women should be balanced, compassionate, conciliatory, accommodating, and willing to compromise….” Male gender norms, on the other hand require, “…men in social situations to be maximizers, assertive, dominant, active, and self-confident; their decisions should show leadership, … high levels of commitment … and decisiveness….”

For both genders, being observed influences the degree to which an individual adheres to the gender norms. If you know you’re being observed – and/or that you will need to defend your choice later – you’re more likely to behave according to your gender norm. Interestingly, men working with women tend to adopt more of the female gender norms.

Nikolova and Lamberton focus exclusively on consumer choice but I wonder if the same dynamic doesn’t apply in many other decision-making situations as well. Men may be willing to compromise but they don’t want to be seen as compromisers. If you need to compromise to get something done, it helps to add a woman into the mix.

Indeed, I was struck by the fact that the same day I discovered the Nikolova-Lamberton article, I also read about Tim Huelskamp, a Republican congressman from western Kansas. According to the New York Times, Huelskamp is a “hardline conservative member of the Freedom Caucus” who “quickly earned a reputation for frustrating Republican leaders…” after he was elected in 2010. Yesterday, a more moderate challenger defeated Huelskamp in the Republican primary. As one voter noted, ““I don’t mind [Huelskamp’s] independent voice, but you’ve got to figure out how to work with people.” Perhaps the good people of Kansas should elect a woman to replace him.

Jevons Paradox and The Future of Employment

My new teaching assistant.

My new teaching assistant.

Four years ago, I wrote a somewhat pessimistic article about Jevons paradox. A 19th-century British economist, William Jevons, noted that as energy-efficient innovations are developed and deployed, energy consumption goes up rather than down. The reason: as energy grows cheaper, we use more of it. We find more and more places to apply energy-consuming devices.

Three years ago, I wrote a somewhat pessimistic article about the future of employment. I argued that smart machines would either: 1) augment knowledge workers, making them much more productive, or; 2) replace knowledge workers altogether. Either way, we would need far fewer knowledge workers.

What if you combine these two rather pessimistic ideas? Oddly enough, the result is a rather optimistic idea.

Here’s an example drawn a recent issue of The Economist. The process of discovery is often invoked in legal disputes between companies or between companies and government agencies. Each side has the right to inspect the other side’s documents, including e-mails, correspondence, web content, and so on. In complex cases, each side may need to inspect massive numbers of documents to decide which documents are germane and which are not. The actual inspecting and sorting has traditionally been done by highly trained paralegals – lots of them.

As you can imagine, the process is time-consuming and error-prone. It’s also fairly easy to automate through deep learning. Artificial neural networks (ANNs) can study the examples of which documents are germane and which are not and learn how to distinguish between the two. Just turn suitably trained ANNs loose on boxes and boxes of documents and you’ll have them sorted in no time, with fewer errors than humans would make.

In other words, artificial neural networks can do a better job than humans at lower cost and in less time. So this should be bad news for paralegal employment, right? The number of paralegals must be plummeting, correct? Actually no. The Economist tells us that paralegal employment has actually risen since ANNs were first deployed for discovery processes.

Why would that be? Jevons paradox. The use of ANNs has dramatically lowered the obstacles to using the discovery process. Hence, the discovery process is used in many more situations. Each discovery process uses fewer paralegals but there are many more discovery processes. The net effect is greater – not lesser – demand for paralegals.

I think of this as good news. As the cost of a useful process drops, the process itself – spam filtering, document editing, image identification, quality control, etc. – can be deployed to many more activities. That’s useful in and of itself. It also drives employment. As costs drops, demand rises. We deploy the process more widely. Each human is more productive but more humans are ultimately required because the process is far more widespread.

As a teacher, this concept makes me rather optimistic. Artificial intelligence can augment my skills, make me more productive, and help me reach more students. But that doesn’t mean that we’ll need fewer teachers. Rather, it means that we can educate many, many more students. That’s a good thing – for both students and teachers.

Politics — Lying Versus Bullshitting

You talkin' to me?

You talkin’ to me?

The presidential campaign is about to lurch into high gear and the lying is flying. Or is it? Are the candidates lying or are they bullshitting us? The two concepts are related but not the same.

Let’s take an example from Donald Trump. Trump says that he will build a wall along our southern border and make Mexico pay for it. Many neutral observers claim that it would be prohibitively expensive to build a useful (that is, impenetrable) wall along the entire border. They also suggest that it’s ludicrous to believe that Mexico would pay for it. So is Trump lying or is he bullshitting?

To answer the question, I dug out an essay by the Princeton philosopher, Harry Frankfurt. Originally published in 1986, the essay is aptly tilted, On Bullshit. * Frankfurt lays out the essential differences between lying and bullshit (with a side trip through humbug).

Frankfurt argues that both bullshit and lying are deceptive – but they’re deceptive in different ways. The liar aims to deceive us about reality and “the way things are.” A liar might say that he has a million dollars when he’s actually flat broke. A bullshitter, on the other hand, aims to deceive us about his purpose. Frankfurt writes, “His eye is not on the facts at all…. He does not care whether the things he says describe reality correctly. He just picks them out, or makes them up, to suit his purpose.”

Further, a liar knows the truth and seeks to conceal it. He opposes the truth. By contrast, a bullshitter may or may not know what the truth is – and certainly doesn’t care. Indeed, he may even be telling the truth. Making a true statement or a false statement is beside the point. As Frankfurt notes, “…the truth … of his statements is of no central interest to him.”

A liar is under numerous constraints. He knows the truth and, “…to invent an effective lie, he must design his falsehood under the guidance of that truth.” A bullshitter has no such constraints. He can make everything up, including the context and the backstory. Instead of making a statement about reality, he invents his own reality.

Indeed, the bullshitter avoids the “authority of the truth” altogether. Frankfurt writes that, “He pays no attention to [the truth] at all. By virtue of this, bullshit is a greater enemy of the truth than lies are.”

So is Trump lying or bullshitting about the wall? I’m guessing that he’s bullshitting. He doesn’t seem to care whether his statement is true or false. That’s beside the point. He just makes stuff up to suit his purpose.

So, if making a true statement (or a false one, for that matter), is beside the point, what is his hidden agenda? I think there are two:

  • To maximize attention and press coverage – every time Trump makes an outrageous statement, journalists write about it. Often times, they point out that the statement is not true. But that’s beside the point. Trump doesn’t care – nor do his followers, apparently. The point is to get elected and that requires attention and saturation coverage.
  • To soak up his opponents’ time – Trump’s opponents often make detailed rebuttals of his claims. They want to set the record straight. But as long as they’re doing that, they’re on Trump’s turf. He’s the center of attention. It’s political rope-a-dope. I’ve noticed that Trump rarely defends his points in any logical way. He simply repeats them, thus causing his opponents to redouble their efforts to prove him wrong. He gets their goat because they think he’s lying when, in fact, he’s bullshitting. Setting the record straight is useless if truth and falsity are beside the point.

So how can Trump’s opponents – Johnson and Clinton – best deal with his bullshitting? To the maximum extent possible, they should ignore him. Don’t get caught up in the trap of making him the center of attention. When a journalist asks about an outrageous Trump statement, don’t take the bait. Just say something along the lines of, “Well, we all know that he’s a world-class bullshitter. Let’s talk about something more useful.”

* Frankfurts’ essay was originally published in The Raritan Quarterly Review in 1986. It was then republished in 2005 as a small book. I’ve depended on the version that’s found here.

Corporate Culture: Counting The Uncountable

Stand by me.

You can’t measure love.

I was in a meeting not long ago with a client whose organization is undergoing a significant transformation. We were discussing what needed to change and how we might promote the appropriate change efforts. A senior executive spoke up to say, “Well, you get what you measure.” Nobody challenged the assumption behind the thought and we began to focus on how to measure change in the organization.

I had, of course, heard similar statements many times before. Business schools emphasize measurement as a key ingredient of management. As a leader, you point the way, establish some key measurements, and then harvest the results. Sounds simple, doesn’t it?

But think about the things that we don’t bother to measure – or that we don’t know how to measure. These include love, respect, hope, initiative, creativity, open-mindedness, ability to resolve conflicts, receptiveness to new ideas, focus, drive, and resilience. Do we really not care about these things?

We tell managers that the most important thing they can do is build a positive, engaging organizational culture. (See here and here). We also tell them they can only get what they measure. Yet many of the components of culture are simply not measureable. I have yet to hear a manager say, “In the third quarter, we increased corporate resilience by 3.2% compared with the same quarter in the previous year.”

So, how do we help managers build a positive culture even when they can’t measure it? Here are some thoughts:

  • The answer is not a number on a piece of paper. It’s OK to look at numbers but we need to remember that a number is an abstraction of a measurement that is an abstraction of reality. Looking only at numbers is like driving your car by looking only at the speedometer.
  • Trust is an unrecognized but important ingredient. We focus on measurement partially because we don’t trust our eyes, and ears, and subordinates. A measurement is supposed to give us an “objective” view of the organization. But a measurement is only as objective as the person taking the measurement – which is to say, not very. If we can create a culture built on trust, we can learn more about our organization than a measurement will ever tell us. (In this regard, it’s useful to review Edwards Deming’s 14 points of management and his red bead experiment).
  • Learning to observe is more important than learning to measure. We forget that measurement is just one form of observation. Management by walking around still works. Taking groups of employees out to dinner will teach you more than a spreadsheet will. Practice being naïve – ask questions that a rookie would ask. You may think you don’t need to ask certain questions because you already know the answer. But you’re probably wrong.
  • A good conversation is more important than a staff meeting. Staff meetings can be useful but they’re also very structured. You get the information that the structure permits. A good conversation is much more open-ended. You can wander about until you touch on the really important issues.
  • Questions are more important than answers. A number from a measurement purports to give us an answer. But it only answers the question you asked – and the answer may not be accurate. Learn how to ask probing questions that get rich and unexpected answers. Tip: a good course on critical thinking will help.

I think we obsess about measurement because we have a bad case of physics envy. We want our organization to behave like a physics experiment. If we apply Force X, we get Result Y. It doesn’t work that way and never will. Time to get over the measurement mania.

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