Strategy. Innovation. Brand.

Leadership

Failure Is An Option

Houston, we have a problem … but we’d rather not talk about it.

The movie Apollo 13 came out in 1995 and popularized the phrase “Failure is not an option”. The flight director, Gene Kranz (played by Ed Harris), repeated the phrase to motivate engineers to find a solution immediately. It worked.

I bet that Kranz’s signature phrase caused more failures in American organizations than any other single sentence in business history. I know it caused myriad failures – and a culture of fear – in my company.

Our CEO loved to spout phrases like “Failure is not an option” and “We will not accept failure here.” It made him feel good. He seemed to believe that repeating the mantra could banish failure forever. It became a magical incantation.

Of course, we continued to have failures in our company. We built complicated software and we occasionally ran off the rails. What did we do when a failure occurred? We buried it. Better a burial than a “public hanging”.

The CEO’s mantra created a perverse incentive. He wanted to eliminate failures. We wanted to keep our jobs. To keep our jobs, we had to bury our failures. Because we buried them, we never fixed the processes that led to the failures in the first place. Our executives could easily conclude that our processes were just fine. After all, we didn’t have any failures, did we?

As we’ve learned elsewhere, design thinking is all about improving something and then improving it again and then again and again. How can we design a corporate culture that continuously improves?

One answer is the concept of the just culture. A just culture acknowledges that failures occur. Many failures result from systemic or process problems rather than from individual negligence. It’s not the person; it’s the system. A just culture aims to improve the system to 1) prevent failure wherever possible or; 2) to ameliorate failures when they do occur. In a sense, it’s a culture designed to improve itself.

According to Barbara Brunt, “A just culture recognizes that individual practitioners should not be held accountable for system failings over which they have no control.” Rather than hiding system failures, a just culture encourages employees to report them. Designers can then improve the systems and processes. As the system improves, the culture also improves. Employees realize that reporting failures leads to good outcomes, not bad ones. It’s a virtuous circle.

The concept of a just culture is not unlike appreciative inquiry. Managers recognize that most processes work pretty well. They appreciate the successes. Failure is an exception – it’s a cause for action and design thinking as opposed to retribution. We continue to appreciate the employee as we redesign the process.

The just culture concept has established a firm beachhead among hospitals in the United States. That makes sense because hospital mistakes can be especially tragic. But I wonder if the concept shouldn’t spread to a much wider swath of companies and agencies. I can certainly think of a number of software companies that could improve their quality by improving their culture. Ultimately, I suspect that every organization could benefit by adapting a simple principle of just culture: if you want to improve your outcomes, recruit your employees to help you.

I’ve learned a bit about just culture because one of my former colleagues, Kim Ross, recently joined Outcome Engenuity, the leading consulting agency in the field of just culture. You can read more about them here. You can learn more about hospital use of just culture by clicking here, here, and here.

Too Much Rhetoric? Or Not Enough?

When will we learn to argue without anger?

In the Western world, the art of persuasion (aka rhetoric), appeared first in ancient Athens. We might well ask, why did it emerge there and then, as opposed to another place and another time?

In his book, Words Like Loaded Pistols, Sam Leith argues that rhetoric blossomed first in Greece because that’s where democracy emerged. Prior to that, we didn’t need to argue or persuade or create ideas — at least not in the public sphere. We just accepted as true whatever the monarch said was true. There was no point in arguing. The monarch wasn’t going to budge.

Because Greeks allowed citizens from different walks of life to speak in the public forum, they were the first people who needed to manage ideas and arguments. In response, they developed the key concepts of rhetoric. They also established the idea that rhetoric was an essential element of good leadership. A leader needed to manage the passions of the moment by speaking logically, clearly, and persuasively.

Through the 19th century, well-educated people were thoroughly schooled in rhetoric as well as the related disciplines of logic and grammar. These were known as the trivium and they helped us manage public ideas. Debates, governed by the rules of rhetoric, helped us create new ideas. Thesis led to antithesis led to synthesis. We considered the trivium to be an essential foundation for good leadership. Leaders have to create ideas, explain ideas, and defend ideas. The trivium provided the tools.

Then in the 20th century, we decided that we didn’t need to teach these skills anymore. Leith argues that we came to see history as an impersonal, overwhelming, uncontrollable force in its own right. Why argue about it if we can’t control it? Courses in rhetoric — and leadership — withered away.

It’s interesting to look at rhetoric as an essential part of democracy. It’s not something to be scorned. It’s something to be promoted. I wonder if some of our partisan anger and divisiveness doesn’t result from the lack of rhetoric in our society. We don’t have too much rhetoric. Rather, we have too little. We have forgotten how to argue without anger.

I’m happy to see that rhetoric and persuasion classes are making a comeback in academia today.  Similarly, courses in leadership seem to be flowering again. Perhaps we can look forward to using disagreements to create new ideas rather than an anvil to destroy them.

Innovating The Innovations

It's a mashup!

It’s a mashup!

Mashup thinking is an excellent way to develop new ideas and products. Rather than thinking outside the box (always difficult), you select ideas from multiple boxes and mash them together. Sometimes, nothing special happens. Sometimes, you get a genius idea.

Let’s mash up self-driving vehicles and drones to see what we get. First, let’s look at the current paradigms:

Self-driving vehicles (SDVs) include cars and trucks equipped with special sensors that can use existing public roadways to navigate autonomously to a given destination. The vehicles navigate a two-dimensional surface and should be able to get humans or packages from Point A to Point B more safely than human-driven vehicles. Individuals may not buy SDVs the way we have traditionally bought cars and trucks. We may simply call them when needed. Though the technology is rapidly improving, the legal and ethical systems still require a great deal of work.

Drones navigate three-dimensional space and are not autonomous. Rather, specially trained pilots fly them remotely. (They are often referred to as Remotely Piloted Aircraft or RPAs). They military uses drones for several missions, including surveillance, intelligence gathering, and to attack ground targets. To date, we haven’t heard of drones attacking airborne targets, but it’s certainly possible. Increasingly, businesses are considering drones for package delivery. The general paradigm is that a small drone will pick up a package from a warehouse (perhaps an airborne warehouse) and deliver it to a home or office or to troops in the field.

So, what do we get if we mash up self-driving vehicles and drones?

The first idea that comes to mind is an autonomous drone. Navigating 3D space is actually simpler than navigating 2D space – you can fly over or under an approaching object. (As a result, train traffic controllers have a more difficult job than air traffic controllers). Why would we want self-flying drones? Conceivably they would be more efficient, less costly, and safer than the human-driven equivalents. They also have a lot more space to operate in and don’t require a lot of asphalt.

We could also change the paradigm for what drones carry. Today, we think of them as carrying packages. Why not people, just like SDVs? It shouldn’t be terribly hard to design a drone that could comfortably carry a couple from their house to the theater and back. We’ll be able to whip out our smart phones, call Uber or Lyft, and have a drone pick us up. (I hope Lyft has trademarked the term Air Lyft).

What else? How about combining self-flying drones with self-driving vehicles? Today’s paradigm for drone deliveries is that an individual drone goes to a warehouse, picks up a package, and delivers it to an individual address. Even if the warehouse is airborne and mobile, that’s horribly inefficient. Instead, let’s try this: a self-driving truck picks up hundreds of packages to be delivered along a given route. The truck also has dozens of drones on it. As the truck passes near an address, a drone picks up the right package, and flies it to the doorstep. We could only do this, of course, if drones are autonomous. The task is too complicated for a human operator.

I could go on … but let’s also investigate the knock-on effects. If what I’ve described comes to pass, what else will happen? Here are some challenges that will probably come up:

  • If drones can carry people as well as packages, we’ll need fewer roadways. What will we do with obsolete roads? We’ll probably need fewer airports, too. What will we do with them?
  • If people no longer buy personal vehicles but call transportation on demand:
    • We’ll need far fewer parking lots. How can cities use the space to revitalize themselves?
    • Automobile companies will implode. How do we retrain automobile executives and workers?
    • We’ll burn far less fossil fuel. This will be good for the environment but bad for, say, oil companies and oil workers. How do we share the burden?
  • If combined vehicles – drones and SDVs – deliver packages, millions of warehouse workers and drivers will lose their jobs. Again, how do we share the burden?
  • If autonomous drones can attack airborne targets, do we really need expensive, human-piloted fighter jets?

These are intriguing predictions as well as troublesome challenges. But the thought process for generating these ideas is quite simple – you simply mash up good ideas from multiple boxes. You, too, can predict the future.

The Cost of Bad Writing

Enough with the passive voice!

Enough with the passive voice!

My students know that I’m a stickler for good writing. When they ask me why I’m so picky, my answer usually boils down to something that’s logically akin to, “Because I said so.”

I know that the ability to write effectively has helped my career. But is it really so important in today’s world of instant communications? Only if you want to save $400 billion a year.

Josh Bernoff, the owner of WOBS LLC, recently published his survey of 547 business professionals who write “at least two hours per week for work, excluding e-mail”. Bernoff’s findings make a clear and compelling case for teaching – and mastering — effective writing skills. His key findings:

  • Reading and writing is a full-time job. Bernoff’s respondents – most of whom were not full-time editors or writers – spend about 25.5 hours reading and 20.4 hours writing each week.
  • Though we complain about e-mail, it takes up only about a third of our reading and writing time. We spend far more time writing and reading memos, blog posts, web content, press releases, speeches, and so on.
  • We think we’re pretty good; everybody else sucks. On an effectiveness scale of 1 to 10 (with 10 being totally effective), professionals rate their own writing at 6.9. They rate writing prepared by others at 5.4.
  • We agree on the Big 5. A majority of respondents thought the following issues contributed most to making written content “significantly less effective”: 1) too long; 2) poorly organized; 3) unclear; 4) too much jargon; 5) not precise enough.
  • We waste a lot of time. For all respondents, 81% agreed or strongly agreed with the statement “Poorly written material wastes a lot of my time”. For managers, directors, and supervisors, the figure is 84%.
  • We want feedback but have a hard time getting it. Only 49% of all respondents – and 41% of managers, directors, and supervisors – agree with the statement, “I get the feedback I need to make my writing better.”
  • Professionals want to write better but are constrained by jargon, passive voice, corporate bullshit and “…the number of people who still think writing is more about making them sound important …” than communicating clearly.

Bernoff rolls all the numbers together and concludes that, “…America is spending 6 percent of total wages on time wasted attempting to get meaning out of poorly written material.” The total cost? About $400 billion.

(You can find Bernoff’s white paper and infographics here. Brief summaries in the popular press also appear here and here).

Bernoff calculates the cost of wasted time. But what’s the direct cost? How much do we spend teaching our employees to write well? Bernoff doesn’t address this specifically but I found a College Board survey from 2004 that digs into the question. The survey went to 120 American companies associated with the College Board’s Business Roundtable. The result? American companies – excluding government agencies and nonprofits – spend about $3.1 billion annually “remedying deficiencies in writing”.

The College Board study also cites an April 2003 white paper titled, “The Neglected ‘R’: The Need For a Writing Revolution.” The conclusion of that study was simple: “Writing today is not a frill for the few, but an essential skill for the many.”

In 2006, The Conference Board picked up a similar theme in a report that asked a simple question: “Are They Ready To Work?” The survey asked companies about the most important skills that newly minted graduates should have. It then asked respondents to grade the skills of newly hired employees. Graduates of two- and four-year college programs were rated “deficient” in three areas: 1) Written communications, and 2) Writing in English; 3) Leadership.

Business leaders agree that writing is an important skill. We can cite studies going back more than a decade that suggest we’re doing a poor job teaching the skill. Bernoff’s study suggests we’re not doing any better today – in fact, we may be doing worse. What to do? We need to invest more time, energy, and effort teaching the “neglected R”. Or you could just hire me.

Perverse Incentives and Wells Fargo

But don't read the comp plan.

But don’t read the comp plan.

The papers today are filled with the story of the “brazen sham” at Wells Fargo. Apparently, 5,300 employees opened “566,000 phantom credit card accounts” and charged customers $1.5 million in fees for accounts that they didn’t know existed. Why did employees do that? Because their compensation plan told them to.

Wells Fargo seems to have spawned a set of perverse incentives in the credit card division. Rather than incenting employees to do the right thing, the incentives led employees to cut some ethical corners in order to earn bigger bonuses. The company professed one set of values but paid employees to abide by another. That’s perverse but not uncommon.

(For more on perverse incentives, click here, here, and here).

Why are perverse incentives so common? In my opinion, it’s poor message discipline. The company delivers different messages to different audiences.

As it happens, I’m a Wells Fargo customer (though not of the credit card division). I receive a lot of their information and, being a student of branding, I actually read it. I’ve always been impressed by the consistent tone and content of their communications. The messaging managers are doing a good job and building a good brand.

I’ve also had a number of students who work for Wells Fargo as junior to mid-level managers. Without exception, they speak highly of the organization. They report that Wells Fargo uses the Strengths Finder tools to help employees identify their strengths and weaknesses and to help managers build well-balanced teams. They also report that the company has a diverse employee base and a very positive culture. In short, my students who work at Wells Fargo seem to love the place.

The messaging is remarkably consistent, whether it’s coming directly from the company or indirectly through employees. As the New York Times reports, the message consistently focuses on trust: “Wells Fargo has long tried to separate itself from Wall Street…..the bank has sought to portray itself as a bank for Main Street. Its entire ethos, Wells Fargo has long suggested, is one of trust and ethics.”

That message came through clearly and consistently for me. But the people in charge of message consistency missed one critical document: the comp plan.

It’s often said that a company speaks to its sales force through the comp plan. In other words, the comp plan is a messaging document and requires the same discipline as any other messaging document.

Sales people don’t read company brochures and websites to learn how to behave. Instead, they read the comp plan. If the brochures focus on a culture of trust but the comp plan focuses on closing deals at any cost, we almost automatically get perverse incentives. The company is saying two different things to two different audiences. The best that can be expected is confusion. The worst is fraud.

Can Wells Fargo recover? I suspect so. In fact, though somewhat disappointed, I’m still a satisfied customer. They’ve done a good job by me and I appreciate their attitude and, yes, their ethos. Now they have to deliver one consistent message to all audiences, both internal and external.

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